Establishes the New York state cornerstone program and the New York state discovery program and net income base and other taxes; repealer
download bill text pdf| Date of Action |
Assembly Actions -
Lowercase Senate Actions - UPPERCASE |
|---|---|
| May 25, 2010 |
referred to ways and means |
S T A T E O F N E W Y O R K
________________________________________________________________________
11302
I N A S S E M B L Y
May 25, 2010
___________
Introduced by M. of A. KOLB, BUTLER, CASTELLI, CONTE, REILICH, SAYWARD
-- Multi-Sponsored by -- M. of A. AMEDORE, BACALLES, BALL, BARCLAY,
BURLING, CALHOUN, CROUCH, DUPREY, ERRIGO, FINCH, FITZPATRICK, GIGLIO,
HAWLEY, HAYES, JORDAN, McKEVITT, J. MILLER, MOLINARO, MONTESANO, OAKS,
RABBITT, RAIA, SALADINO, SCOZZAFAVA, TEDISCO, TOBACCO, TOWNSEND --
read once and referred to the Committee on Ways and Means
AN ACT to amend the general municipal law, in relation to establishing
the New York state cornerstone program; and to repeal article 18-B of
such law relating thereto (Part A); to amend the public authorities
law and the tax law, in relation to establishing the New York state
discovery program (Part B); and to amend the tax law, in relation to
net income base and in relation to certain taxes (Part C)
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. This act enacts into law components of legislation relating
to the "New York state cornerstone program and the New York state
discovery program". 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, includ-
ing the effective date of the Part, which makes reference to a section
"of this act", when used in connection with that particular component,
shall be deemed to mean and refer to the corresponding section of the
Part in which it is found. Section three of this act sets forth the
general effective date of this act.
S 1-a. Statement of legislative findings and declaration. It is here-
by found and declared that there exists within the state high unemploy-
ment, limited new job creation, a dependence on public assistance
income, insufficient support for industrial and commercial businesses,
and unnecessarily high taxes. These severe conditions require state
government to target certain industries in order to stimulate private
investment, private business development and job creation. It should be
the public policy of the state to help promote the development of new
businesses, rather than deter them with punitive regulation and exces-
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD17421-02-0
A. 11302 2
sive taxes. It is further found and declared that it is the public poli-
cy of the state to achieve these goals through the mutual cooperation of
all levels of state and local government, the business community and
academic institutions.
PART A
Section 1. Article 18-B of the general municipal law is REPEALED.
S 2. The general municipal law is amended by adding a new article 18-B
to read as follows:
ARTICLE 18-B
NEW YORK STATE CORNERSTONE PROGRAM
SECTION 955. NEW YORK CORNERSTONE PROGRAM ESTABLISHED.
956. RESPONSIBILITIES OF THE COMMISSIONER.
957. CORNERSTONE DEVELOPMENT BOARD.
958. REPORTING REQUIREMENTS.
S 955. NEW YORK CORNERSTONE PROGRAM ESTABLISHED. THERE IS HEREBY
ESTABLISHED THE NEW YORK CORNERSTONE PROGRAM.
S 956. RESPONSIBILITIES OF THE COMMISSIONER. 1. THE COMMISSIONER OF
THE DEPARTMENT OF ECONOMIC DEVELOPMENT SHALL, IN CONSULTATION WITH THE
DIRECTOR OF THE BUDGET, THE COMMISSIONER OF LABOR, AND THE COMMISSIONER
OF TAXATION AND FINANCE, PROMULGATE RULES AND REGULATIONS, WHICH,
NOTWITHSTANDING ANY PROVISIONS TO THE CONTRARY IN THE STATE ADMINISTRA-
TIVE PROCEDURE ACT, MAY BE ADOPTED ON AN EMERGENCY BASIS, RELATING TO:
(A) THE APPLICATION PROCESS;
(B) DEFINING TYPES OF BUSINESSES ELIGIBLE, INCLUDING BUT NOT LIMITED
TO MANUFACTURING, HIGH-TECH, BIO-TECH, CLEAN-TECH AND AGRI-BUSINESS;
(C) LIMITING BUSINESSES TO FIVE YEARS OF PARTICIPATION;
(D) CERTIFICATION BY THE COMMISSIONER FOR ELIGIBILITY OF BUSINESS
ENTERPRISES FOR BENEFITS REFERRED TO IN THIS ARTICLE. CRITERIA FOR
CERTIFICATION SHALL INCLUDE, BUT NOT BE LIMITED TO:
(I) REQUIRING A BUSINESS TO HAVE BEEN OPERATIONAL IN NEW YORK STATE
FOR AT LEAST TEN CONSECUTIVE YEARS PRIOR TO APPLYING TO THE CORNERSTONE
PROGRAM;
(II) REQUIRING A BUSINESS TO SHOW PROOF THAT THEY WILL HAVE TO LOWER
EMPLOYMENT LEVELS WITHOUT CERTIFICATION IN THE PROGRAM;
(III) REQUIRING A BUSINESS TO COMMIT TO MAINTAINING OR INCREASING
CURRENT EMPLOYMENT LEVELS TO QUALIFY FOR TAX BENEFITS;
(IV) WHETHER CERTIFICATION WILL HAVE THE UNDESIRED EFFECT OF CAUSING
INDIVIDUALS TO TRANSFER FROM EXISTING EMPLOYMENT WITH ANOTHER BUSINESS
ENTERPRISE TO SIMILAR EMPLOYMENT WITH THE BUSINESS ENTERPRISE SO CERTI-
FIED, AND TRANSFERRING EXISTING EMPLOYMENT FROM ONE OR MORE OTHER MUNI-
CIPALITIES, TOWNS OR VILLAGES IN THE STATE;
(V) WHETHER SUCH ENTERPRISE IS LIKELY TO ENHANCE THE ECONOMIC CLIMATE
OF THE STATE; AND
(VI) WHETHER THE COMMISSIONER OF LABOR ESTABLISHES THAT SUCH BUSINESS
ENTERPRISE, DURING THE TEN YEARS PRECEDING THE SUBMISSION OF AN APPLICA-
TION FOR CERTIFICATION, HAS ENGAGED IN A SUBSTANTIAL VIOLATION OR A
PATTERN OF VIOLATIONS OF LAWS REGULATING UNEMPLOYMENT INSURANCE, WORKERS
COMPENSATION, PUBLIC WORK, CHILD LABOR, EMPLOYMENT OF MINORITIES AND
WOMEN, SAFETY AND HEALTH, OR OTHER LAWS FOR THE PROTECTION OF WORKERS AS
DETERMINED BY FINAL JUDGMENT OF A JUDICIAL OR ADMINISTRATIVE PROCEEDING.
2. THE COMMISSIONER OF THE DEPARTMENT OF ECONOMIC DEVELOPMENT SHALL,
IN CONSULTATION WITH THE DIRECTOR OF THE BUDGET, THE COMMISSIONER OF
LABOR, AND THE COMMISSIONER OF TAXATION AND FINANCE, ESTABLISH A COST
BENEFIT ANALYSIS.
A. 11302 3
3. THE COMMISSIONER OF THE DEPARTMENT OF ECONOMIC DEVELOPMENT SHALL,
IN CONSULTATION WITH THE DIRECTOR OF THE BUDGET, THE COMMISSIONER OF
LABOR, AND THE COMMISSIONER OF TAXATION AND FINANCE, ESTABLISH A PROGRAM
AND PROPOSE LEGISLATION GRANTING TAX EXEMPTIONS PREVIOUSLY APPLICABLE TO
EMPIRE ZONES FOR BUSINESS ENTERPRISES ELIGIBLE UNDER THE CORNERSTONE
PROGRAM ESTABLISHED PURSUANT TO THIS ARTICLE, TO THE GOVERNOR AND LEGIS-
LATURE WITHIN ONE HUNDRED EIGHTY DAYS FROM THE EFFECTIVE DATE OF THIS
ARTICLE.
S 957. CORNERSTONE DEVELOPMENT BOARD. 1. THE CORNERSTONE DEVELOPMENT
BOARD IS HEREBY CREATED.
2. SUCH BOARD SHALL CONSIST OF THE COMMISSIONER OF TAXATION AND
FINANCE, THE DIRECTOR OF THE BUDGET, THE COMMISSIONER OF LABOR AND TWO
MEMBERS TO BE APPOINTED BY THE GOVERNOR; ONE MEMBER TO BE APPOINTED BY
THE TEMPORARY PRESIDENT OF THE SENATE; ONE MEMBER TO BE APPOINTED BY THE
SPEAKER OF THE ASSEMBLY; ONE MEMBER TO BE APPOINTED BY THE MINORITY
LEADER OF THE SENATE AND ONE MEMBER TO BE APPOINTED BY THE MINORITY
LEADER OF THE ASSEMBLY.
3. THE GOVERNOR SHALL DESIGNATE FROM AMONG THE VOTING MEMBERS THE
CHAIR OF THE BOARD. EACH MEMBER OF THE BOARD SHALL BE ENTITLED TO DESIG-
NATE A REPRESENTATIVE TO ATTEND MEETINGS OF THE BOARD IN HIS OR HER
PLACE, AND TO VOTE OR OTHERWISE ACT ON HIS OR HER BEHALF IN HIS OR HER
ABSENCE.
4. NOTICE OF SUCH DESIGNATION SHALL BE FURNISHED IN WRITING TO THE
BOARD BY THE DESIGNATING MEMBER.
5. A REPRESENTATIVE SHALL SERVE AT THE PLEASURE OF THE DESIGNATING
MEMBER.
6. A REPRESENTATIVE SHALL NOT BE AUTHORIZED TO DELEGATE ANY OF HIS OR
HER DUTIES OR FUNCTIONS TO ANY OTHER PERSON.
S 958. REPORTING REQUIREMENTS. 1. THE DEPARTMENT OF AUDIT AND
CONTROL, THE DEPARTMENT OF TAXATION AND FINANCE AND THE DEPARTMENT OF
ECONOMIC DEVELOPMENT SHALL PREPARE REPORTS ON THE MANAGEMENT AND THE
ECONOMIC AND FISCAL IMPACT OF THE CORNERSTONE PROGRAM.
2. THE ANALYSIS OF THE FISCAL AND ECONOMIC IMPACT OF THE PROGRAM SHALL
INCLUDE, BUT NOT BE LIMITED TO: A REVIEW OF THE COST OF PROVIDING THE
TAX BENEFITS REFERRED TO IN THIS ARTICLE; PROGRESS OF THE PROGRAM;
NUMBER OF TAX CREDITS CLAIMED BY EACH CERTIFIED BUSINESS; NUMBER OF JOBS
CREATED AND/OR RETAINED BY EACH BUSINESS AND ALL OTHER INFORMATION
REQUESTED AND NOT PROHIBITED BY LAW.
3. SUCH REPORTS SHALL BE TRANSMITTED TO THE GOVERNOR AND THE LEGISLA-
TURE BY SEPTEMBER FIRST, TWO THOUSAND ELEVEN AND EVERY YEAR THEREAFTER
AND SHALL BE POSTED ONLINE FOR FULL PUBLIC DISCLOSURE.
S 3. This act shall take effect immediately; provided, however, that
any rules and regulations necessary to carry out the provisions of this
act shall be promulgated before such effective date.
PART B
Section 1. This act shall be known and may be cited as the "New York
state discovery act".
S 2. Section 3166 of the public authorities law is renumbered section
3167 and a new section 3166 is added to read as follows:
S 3166. NEW YORK STATE DISCOVERY PROGRAM. 1. THE NEW YORK STATE
DISCOVERY PROGRAM IS HEREBY ESTABLISHED.
2. THE FOUNDATION SHALL, AFTER CONSULTATION WITH THE DIRECTOR OF THE
BUDGET, THE COMMISSIONER OF LABOR, AND THE COMMISSIONER OF TAXATION AND
FINANCE, PROMULGATE RULES AND REGULATIONS, WHICH, NOTWITHSTANDING ANY
A. 11302 4
PROVISIONS TO THE CONTRARY IN THE STATE ADMINISTRATIVE PROCEDURE ACT,
MAY BE ADOPTED ON AN EMERGENCY BASIS, RELATING TO:
(A) THE APPLICATION PROCESS;
(B) DEFINING TYPES OF BUSINESSES ELIGIBLE, INCLUDING BUT NOT LIMITED
TO MANUFACTURING, HIGH-TECH, BIO-TECH, CLEAN-TECH AND AGRI-BUSINESS;
(C) LIMITING BUSINESSES TO FIVE YEARS OF PARTICIPATION;
(D) CERTIFICATION BY THE FOUNDATION AS TO THE ELIGIBILITY OF BUSINESS
ENTERPRISES FOR BENEFITS REFERRED TO IN THIS SECTION, WHICH SHALL BE
GOVERNED BY CRITERIA INCLUDING, BUT NOT LIMITED TO:
(I) REQUIRING AN ELIGIBLE BUSINESS TO BE A START-UP BUSINESS, OR A
BUSINESS OPERATING IN THE STATE FOR TWO YEARS OR LESS;
(II) A BUSINESS MUST OFFER INTERNSHIPS TO LOCAL HIGH SCHOOL STUDENTS,
BOCES STUDENTS AND COLLEGE STUDENTS PER A PLAN DEVELOPED BY THE FOUNDA-
TION;
(III) A BUSINESS MUST COMMIT TO INCREASING CURRENT EMPLOYMENT LEVELS
TO QUALIFY FOR TAX BENEFITS;
(IV) WHETHER CERTIFICATION WILL HAVE THE UNDESIRED EFFECT OF CAUSING
INDIVIDUALS TO TRANSFER FROM EXISTING EMPLOYMENT WITH ANOTHER BUSINESS
ENTERPRISE TO SIMILAR EMPLOYMENT WITH THE BUSINESS ENTERPRISE SO CERTI-
FIED, AND TRANSFERRING EXISTING EMPLOYMENT FROM ONE OR MORE OTHER MUNI-
CIPALITIES, TOWNS OR VILLAGES IN THE STATE;
(V) WHETHER SUCH ENTERPRISE IS LIKELY TO ENHANCE THE ECONOMIC CLIMATE
OF THE STATE;
(VI) WHETHER THE COMMISSIONER OF LABOR ESTABLISHES THAT SUCH BUSINESS
ENTERPRISE, DURING THE TWO YEARS PRECEDING THE SUBMISSION OF AN APPLICA-
TION FOR CERTIFICATION, HAS ENGAGED IN A SUBSTANTIAL VIOLATION OR A
PATTERN OF VIOLATIONS OF LAWS REGULATING UNEMPLOYMENT INSURANCE, WORKERS
COMPENSATION, PUBLIC WORK, CHILD LABOR, EMPLOYMENT OF MINORITIES AND
WOMEN, SAFETY AND HEALTH, OR OTHER LAWS FOR THE PROTECTION OF WORKERS AS
DETERMINED BY FINAL JUDGMENT OF A JUDICIAL OR ADMINISTRATIVE PROCEEDING;
AND
(VII) WHETHER SUCH BUSINESS MEETS THE REQUIREMENTS OF THE COST BENEFIT
ANALYSIS AS ESTABLISHED BY THE COMMISSIONER OF ECONOMIC DEVELOPMENT.
3. THE DEPARTMENT OF AUDIT AND CONTROL, THE DEPARTMENT OF TAXATION AND
FINANCE AND THE FOUNDATION SHALL PREPARE REPORTS ON THE MANAGEMENT AND
THE ECONOMIC AND FISCAL IMPACT OF THE DISCOVERY PROGRAM. THE ANALYSIS OF
THE FISCAL AND ECONOMIC IMPACT OF THE PROGRAM SHALL INCLUDE, BUT NOT BE
LIMITED TO: A REVIEW OF THE COST OF PROVIDING THE TAX BENEFITS REFERRED
TO IN THIS ARTICLE; PROGRESS OF THE PROGRAM; NUMBER OF TAX CREDITS
CLAIMED BY EACH CERTIFIED BUSINESS; NUMBER OF JOBS CREATED BY EACH BUSI-
NESS AND ALL OTHER INFORMATION REQUESTED AND NOT PROHIBITED BY LAW. SUCH
REPORTS SHALL BE TRANSMITTED TO THE GOVERNOR AND THE LEGISLATURE BY
SEPTEMBER FIRST, TWO THOUSAND ELEVEN AND EVERY YEAR THEREAFTER AND SHALL
BE POSTED ONLINE FOR FULL PUBLIC DISCLOSURE.
4. THE FOUNDATION SHALL PROVIDE GRANTS OF UP TO TWO THOUSAND DOLLARS
FOR EVERY INTERNSHIP DEVELOPED UNDER THIS PROGRAM, TO BE PAID FOR OUT OF
THE JOB DEVELOPMENT FUND ESTABLISHED PURSUANT TO SECTION THIRTY-ONE
HUNDRED SIXTY-SIX-A OF THIS ARTICLE. SUCH GRANT ALLOCATIONS SHALL BE
DIVIDED EVENLY BETWEEN THE CERTIFIED BUSINESS AND THE CORRESPONDING
INSTITUTION OF HIGHER EDUCATION TO COVER COSTS ASSOCIATED WITH THE
DEVELOPMENT OF SUCH INTERNSHIPS.
S 3. Subdivision 3 of section 3151 of the public authorities law, as
amended by section 1 of part CC of chapter 59 of the laws of 2006, is
amended to read as follows:
3. Membership. The voting members of the foundation board shall
consist of: the executive director of the New York state foundation for
A. 11302 5
science, technology and innovation who shall be a permanent member of
the foundation board, [seven] ELEVEN members from the private sector,
two of whom shall be appointed by the temporary president of the senate,
two of whom shall be appointed by the speaker of the assembly, TWO OF
WHOM SHALL BE APPOINTED BY THE MINORITY LEADER OF THE SENATE, TWO OF
WHOM SHALL BE APPOINTED BY THE MINORITY LEADER OF THE ASSEMBLY and three
of whom shall be appointed by the governor with the advice and consent
of the senate, provided that all [seven] ELEVEN members are employed
within the private sector throughout the time of their appointment to
the foundation board. The private sector members shall demonstrate
leadership and expertise and be broadly representative across different
business sectors of the state and shall include, but not be limited to
representatives of the industrial technology research and development
sector, small business high technology sector; minority and women busi-
ness enterprises, the venture capital industry; [five] SEVEN additional
members shall be appointed from among the academic, government, and
workforce development sectors, three of whom shall be appointed by the
governor, with the advice and consent of the senate, one of whom shall
be appointed by the temporary president of the senate, [and] one of whom
shall be appointed by the speaker of the assembly[;], ONE OF WHOM SHALL
BE APPOINTED BY THE MINORITY LEADER OF THE ASSEMBLY, ONE OF WHOM SHALL
BE APPOINTED BY THE MINORITY LEADER OF THE SENATE; and representatives
of the regional partnerships as established in this section shall also
serve as non-voting members of the board, provided that each partnership
shall nominate one of its members to serve as a non-voting member of the
board. All members of the foundation board shall serve at the pleasure
of the appointing authority and, notwithstanding any other provision of
law, shall be subject to sections seventy-three and seventy-four of the
public officers law. The chair of the foundation board shall be
appointed by the governor from among the private sector members with the
advice and consent of the senate. All other officers of the board shall
be elected from among the voting members of the board of directors by
the majority vote of currently serving voting members of the foundation
board. The executive director of the foundation shall be appointed by
the governor, with the advice and consent of the senate. The executive
director of the New York state office of science, technology and academ-
ic research shall become the interim executive director of the founda-
tion, and shall be the executive director of the foundation until the
executive director of the foundation is appointed by the governor, with
the advice and consent of the senate. The members of the New York state
office of science, technology and academic research advisory council
shall serve as interim voting members of the foundation board until the
appointing authority appoints voting members of the foundation board.
Nothing contained herein shall prohibit a member of the New York state
office of science, technology and academic research advisory council
from being appointed as a voting member of the foundation board by the
appropriate appointing authority.
S 4. The public authorities law is amended by adding a new section
3166-a to read as follows:
S 3166-A. JOB DEVELOPMENT FUND. THERE IS HEREBY ESTABLISHED IN THE
JOINT CUSTODY OF THE COMMISSIONER OF TAXATION AND FINANCE AND THE STATE
COMPTROLLER A FUND TO BE KNOWN AS THE "JOB DEVELOPMENT FUND".
2. THE FUND SHALL CONSIST OF MONIES APPROPRIATED FOR THE FOUNDATION
FOR SCIENCE, TECHNOLOGY AND INNOVATION.
3. MONEYS OF THE FUND SHALL BE EXPENDED FOR THE PURPOSES OF CARRYING
OUT THE PROVISIONS OF SECTION THIRTY-ONE HUNDRED SIXTY-SIX OF THIS ARTI-
A. 11302 6
CLE. MONEYS SHALL BE PAID OUT OF THE FUND ON THE AUDIT AND WARRANT OF
THE STATE COMPTROLLER ON VOUCHERS APPROVED BY THE FOUNDATION FOR
SCIENCE, TECHNOLOGY AND INNOVATION. ANY INTEREST RECEIVED BY THE COMP-
TROLLER ON MONEYS ON DEPOSIT IN THE JOB DEVELOPMENT FUND SHALL BE
RETAINED IN AND BECOME PART OF SUCH FUND.
S 5. The tax law is amended by adding a new section 15-a to read as
follows:
S 15-A. DISCOVERY ZONE PROPERTY TAX CREDIT. FOR A BUSINESS ENTERPRISE
WHICH IS FIRST CERTIFIED UNDER THIS SECTION ON OR AFTER JULY FIRST, TWO
THOUSAND TEN, THE CREDIT SHALL BE FOR A PERIOD OF FIVE YEARS AND SHALL
NOT EXCEED THIRTY PERCENT OF THE ELIGIBLE REAL PROPERTY TAXES PAID IN
THE CURRENT TAXABLE YEAR OF ELIGIBILITY.
S 6. Section 210 of the tax law is amended by adding two new subdivi-
sions 41 and 42 to read as follows:
41. DISCOVERY INVESTMENT CREDIT. (A) A TAXPAYER SHALL BE ALLOWED A
CREDIT, TO BE COMPUTED AS HEREINAFTER PROVIDED, AGAINST THE TAX IMPOSED
BY THIS ARTICLE WHERE THE TAXPAYER HAS BEEN CERTIFIED PURSUANT TO
SECTION THIRTY-ONE HUNDRED SIXTY-SIX OF THE PUBLIC AUTHORITIES LAW. THE
AMOUNT OF SUCH CREDIT SHALL BE TWENTY PERCENT OF THE COST OR OTHER BASIS
FOR FEDERAL INCOME TAX PURPOSES OF TANGIBLE PERSONAL PROPERTY AND OTHER
TANGIBLE PROPERTY, INCLUDING BUILDINGS AND STRUCTURAL COMPONENTS OF
BUILDINGS, DESCRIBED IN PARAGRAPH (B) OF THIS SUBDIVISION, BUT ONLY IF
THE ACQUISITION, CONSTRUCTION, RECONSTRUCTION OR ERECTION OF SUCH PROP-
ERTY OCCURRED OR WAS COMMENCED ON OR AFTER THE DATE OF SUCH DESIGNATION
AND PRIOR TO THE EXPIRATION THEREOF. PROVIDED, HOWEVER, THAT IN THE CASE
OF AN ACQUISITION, CONSTRUCTION, RECONSTRUCTION OR ERECTION WHICH WAS
COMMENCED DURING SUCH PERIOD AND CONTINUED OR COMPLETED SUBSEQUENTLY,
THE CREDIT SHALL BE TWENTY PERCENT OF THE PORTION OF THE COST OR OTHER
BASIS FOR FEDERAL INCOME TAX PURPOSES ATTRIBUTABLE TO SUCH PERIOD, WHICH
PORTION SHALL BE ASCERTAINED BY MULTIPLYING SUCH COST OR BASIS BY A
FRACTION THE NUMERATOR OF WHICH SHALL BE THE EXPENDITURES PAID OR
INCURRED DURING SUCH PERIOD FOR SUCH PURPOSES AND THE DENOMINATOR OF
WHICH SHALL BE THE TOTAL OF ALL EXPENDITURES PAID OR INCURRED FOR SUCH
ACQUISITION, CONSTRUCTION, RECONSTRUCTION OR ERECTION.
(B) A CREDIT SHALL BE ALLOWED UNDER THIS SUBDIVISION WITH RESPECT TO
TANGIBLE PERSONAL PROPERTY AND OTHER TANGIBLE PROPERTY, INCLUDING BUILD-
INGS AND STRUCTURAL COMPONENTS OF BUILDINGS WHICH: (1) ARE DEPRECIABLE
PURSUANT TO SECTION ONE HUNDRED SIXTY-SEVEN OF THE INTERNAL REVENUE
CODE, (2) HAVE A USEFUL LIFE OF FOUR YEARS OR MORE, (3) ARE ACQUIRED BY
PURCHASE AS DEFINED IN SECTION ONE HUNDRED SEVENTY-NINE (D) OF THE
INTERNAL REVENUE CODE, AND (4) ARE (I) PRINCIPALLY USED BY THE TAXPAYER
IN THE PRODUCTION OF GOODS BY MANUFACTURING, PROCESSING, ASSEMBLING,
REFINING, MINING, EXTRACTING, FARMING, AGRICULTURE, HORTICULTURE, FLORI-
CULTURE, VITICULTURE OR COMMERCIAL FISHING, (II) INDUSTRIAL WASTE TREAT-
MENT FACILITIES OR AIR POLLUTION CONTROL FACILITIES USED IN THE TAXPAY-
ER'S TRADE OR BUSINESS, (III) RESEARCH AND DEVELOPMENT PROPERTY, (IV)
PRINCIPALLY USED IN THE ORDINARY COURSE OF THE TAXPAYER'S TRADE OR BUSI-
NESS AS A BROKER OR DEALER IN CONNECTION WITH THE PURCHASE OR SALE
(WHICH SHALL INCLUDE BUT NOT BE LIMITED TO THE ISSUANCE, ENTERING INTO,
ASSUMPTION, OFFSET, ASSIGNMENT, TERMINATION, OR TRANSFER) OF STOCKS,
BONDS OR OTHER SECURITIES AS DEFINED IN SECTION FOUR HUNDRED
SEVENTY-FIVE (C)(2) OF THE INTERNAL REVENUE CODE, OR OF COMMODITIES AS
DEFINED IN SECTION FOUR HUNDRED SEVENTY-FIVE (E) OF THE INTERNAL REVENUE
CODE, OR (V) PRINCIPALLY USED IN THE ORDINARY COURSE OF THE TAXPAYER'S
TRADE OR BUSINESS OF PROVIDING INVESTMENT ADVISORY SERVICES FOR A REGU-
LATED INVESTMENT COMPANY AS DEFINED IN SECTION EIGHT HUNDRED FIFTY-ONE
A. 11302 7
OF THE INTERNAL REVENUE CODE, OR LENDING, LOAN ARRANGEMENT OR LOAN ORIG-
INATION SERVICES TO CUSTOMERS IN CONNECTION WITH THE PURCHASE OR SALE
(WHICH SHALL INCLUDE BUT NOT BE LIMITED TO THE ISSUANCE, ENTERING INTO,
ASSUMPTION, OFFSET, ASSIGNMENT, TERMINATION, OR TRANSFER) OF SECURITIES
AS DEFINED IN SECTION FOUR HUNDRED SEVENTY-FIVE (C)(2) OF THE INTERNAL
REVENUE CODE. FOR PURPOSES OF CLAUSES (IV) AND (V) OF THIS SUBPARAGRAPH,
PROPERTY PURCHASED BY A TAXPAYER AFFILIATED WITH A REGULATED BROKER,
DEALER OR REGISTERED INVESTMENT ADVISER IS ALLOWED A CREDIT UNDER THIS
SUBDIVISION IF THE PROPERTY IS USED BY ITS AFFILIATED REGULATED BROKER,
DEALER OR REGISTERED INVESTMENT ADVISER IN ACCORDANCE WITH THIS SUBDIVI-
SION. FOR PURPOSES OF DETERMINING IF THE PROPERTY IS PRINCIPALLY USED IN
QUALIFYING USES, THE USES BY THE TAXPAYER DESCRIBED IN CLAUSES (IV) AND
(V) OF THIS SUBPARAGRAPH MAY BE AGGREGATED. IN ADDITION, THE USES BY THE
TAXPAYER, ITS AFFILIATED REGULATED BROKER, DEALER, AND REGISTERED
INVESTMENT ADVISER UNDER EITHER OR BOTH OF THOSE CLAUSES MAY BE AGGRE-
GATED. PROVIDED, HOWEVER, A TAXPAYER SHALL NOT BE ALLOWED THE CREDIT
PROVIDED BY CLAUSES (IV) AND (V) OF THIS SUBPARAGRAPH UNLESS (I) EIGHTY
PERCENT OR MORE OF THE EMPLOYEES PERFORMING THE ADMINISTRATIVE AND
SUPPORT FUNCTIONS RESULTING FROM OR RELATED TO THE QUALIFYING USES OF
SUCH EQUIPMENT ARE LOCATED IN THIS STATE, OR (II) THE AVERAGE NUMBER OF
EMPLOYEES THAT PERFORM THE ADMINISTRATIVE AND SUPPORT FUNCTIONS RESULT-
ING FROM OR RELATED TO THE QUALIFYING USES OF SUCH EQUIPMENT AND ARE
LOCATED IN THIS STATE DURING THE TAXABLE YEAR FOR WHICH THE CREDIT IS
CLAIMED IS EQUAL TO OR GREATER THAN NINETY-FIVE PERCENT OF THE AVERAGE
NUMBER OF EMPLOYEES THAT PERFORM THESE FUNCTIONS AND ARE LOCATED IN THIS
STATE DURING THE THIRTY-SIX MONTHS IMMEDIATELY PRECEDING THE YEAR FOR
WHICH THE CREDIT IS CLAIMED, OR (III) THE NUMBER OF EMPLOYEES LOCATED IN
THIS STATE DURING THE TAXABLE YEAR FOR WHICH THE CREDIT IS CLAIMED IS
EQUAL TO OR GREATER THAN NINETY PERCENT OF THE NUMBER OF EMPLOYEES
LOCATED IN THIS STATE ON DECEMBER THIRTY-FIRST, NINETEEN HUNDRED NINE-
TY-EIGHT OR, IF THE TAXPAYER WAS NOT A CALENDAR YEAR TAXPAYER IN NINE-
TEEN HUNDRED NINETY-EIGHT, THE LAST DAY OF ITS FIRST TAXABLE YEAR ENDING
AFTER DECEMBER THIRTY-FIRST, NINETEEN HUNDRED NINETY-EIGHT. IF THE
TAXPAYER BECOMES SUBJECT TO TAX IN THIS STATE AFTER THE TAXABLE YEAR
BEGINNING IN NINETEEN HUNDRED NINETY-EIGHT, THEN THE TAXPAYER IS NOT
REQUIRED TO SATISFY THE EMPLOYMENT TEST PROVIDED IN THE PRECEDING
SENTENCE OF THIS SUBPARAGRAPH FOR ITS FIRST TAXABLE YEAR. FOR PURPOSES
OF ITEM (III) OF THIS CLAUSE, THE EMPLOYMENT TEST WILL BE BASED ON THE
NUMBER OF EMPLOYEES LOCATED IN THIS STATE ON THE LAST DAY OF THE FIRST
TAXABLE YEAR THE TAXPAYER IS SUBJECT TO TAX IN THIS STATE. IF THE USES
OF THE PROPERTY MUST BE AGGREGATED TO DETERMINE WHETHER THE PROPERTY IS
PRINCIPALLY USED IN QUALIFYING USES, THEN EITHER EACH AFFILIATE USING
THE PROPERTY MUST SATISFY THIS EMPLOYMENT TEST OR THIS EMPLOYMENT TEST
MUST BE SATISFIED THROUGH THE AGGREGATION OF THE EMPLOYEES OF THE
TAXPAYER, ITS AFFILIATED REGULATED BROKER, DEALER, AND REGISTERED
INVESTMENT ADVISER USING THE PROPERTY. FOR PURPOSES OF THIS SUBDIVISION,
THE TERM "GOODS" SHALL NOT INCLUDE ELECTRICITY. FOR PURPOSES OF THIS
PARAGRAPH, MANUFACTURING SHALL MEAN THE PROCESS OF WORKING RAW MATERIALS
INTO WARES SUITABLE FOR USE OR WHICH GIVES NEW SHAPES, NEW QUALITY OR
NEW COMBINATION TO MATTER WHICH ALREADY HAS GONE THROUGH SOME ARTIFICIAL
PROCESS BY THE USE OF MACHINERY, TOOLS, APPLIANCES AND OTHER SIMILAR
EQUIPMENT. PROPERTY USED IN THE PRODUCTION OF GOODS SHALL INCLUDE
MACHINERY, EQUIPMENT OR OTHER TANGIBLE PROPERTY WHICH IS PRINCIPALLY
USED IN THE REPAIR AND SERVICE OF OTHER MACHINERY, EQUIPMENT OR OTHER
TANGIBLE PROPERTY USED PRINCIPALLY IN THE PRODUCTION OF GOODS AND SHALL
INCLUDE ALL FACILITIES USED IN THE PRODUCTION OPERATION, INCLUDING STOR-
A. 11302 8
AGE OF MATERIAL TO BE USED IN PRODUCTION AND OF THE PRODUCTS THAT ARE
PRODUCED. FOR PURPOSES OF THIS PARAGRAPH, THE TERMS "INDUSTRIAL WASTE
TREATMENT FACILITIES", "AIR POLLUTION CONTROL FACILITIES" AND "RESEARCH
AND DEVELOPMENT PROPERTY" SHALL HAVE THE MEANINGS ASCRIBED THERETO BY
CLAUSES (II) AND (III), RESPECTIVELY, OF SUBPARAGRAPH FOUR OF THIS PARA-
GRAPH, AND THE PROVISIONS OF SUBPARAGRAPH THREE OF THIS PARAGRAPH SHALL
APPLY.
(C) A TAXPAYER SHALL NOT BE ALLOWED A CREDIT UNDER THIS SUBDIVISION
WITH RESPECT TO ANY TANGIBLE PERSONAL PROPERTY AND OTHER TANGIBLE PROP-
ERTY, INCLUDING BUILDINGS AND STRUCTURAL COMPONENTS OF BUILDINGS, WHICH
IT LEASES TO ANY OTHER PERSON OR CORPORATION EXCEPT WHERE A TAXPAYER
LEASES PROPERTY TO AN AFFILIATED REGULATED BROKER, DEALER, OR REGISTERED
INVESTMENT ADVISER THAT USES SUCH PROPERTY IN ACCORDANCE WITH CLAUSE
(IV) OR (V) OF SUBPARAGRAPH FOUR OF PARAGRAPH (B) OF THIS SUBDIVISION.
FOR PURPOSES OF THE PRECEDING SENTENCE, ANY CONTRACT OR AGREEMENT TO
LEASE OR RENT OR FOR A LICENSE TO USE SUCH PROPERTY SHALL BE CONSIDERED
A LEASE. PROVIDED, HOWEVER, IN DETERMINING WHETHER A TAXPAYER SHALL BE
ALLOWED A CREDIT UNDER THIS SUBDIVISION WITH RESPECT TO SUCH PROPERTY,
ANY ELECTION MADE WITH RESPECT TO SUCH PROPERTY PURSUANT TO THE
PROVISIONS OF PARAGRAPH EIGHT OF SUBSECTION (F) OF SECTION ONE HUNDRED
SIXTY-EIGHT OF THE INTERNAL REVENUE CODE, AS SUCH PARAGRAPH WAS IN
EFFECT FOR AGREEMENTS ENTERED INTO PRIOR TO JANUARY FIRST, NINETEEN
HUNDRED EIGHTY-FOUR, SHALL BE DISREGARDED.
(D) IF THE AMOUNT OF CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY
TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S TAX FOR SUCH YEAR, THE EXCESS
MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND MAY BE DEDUCTED
FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS. ANY REFUND PAID PURSUANT
TO THIS PARAGRAPH SHALL BE DEEMED TO BE A REFUND OF AN OVERPAYMENT OF
TAX AS PROVIDED IN SECTION SIX HUNDRED EIGHTY-SIX OF THIS CHAPTER,
PROVIDED, HOWEVER, THAT NO INTEREST SHALL BE PAID THEREON.
42. DISCOVERY WAGE TAX CREDIT. (A) A TAXPAYER SHALL BE ALLOWED A CRED-
IT, TO BE COMPUTED AS HEREINAFTER PROVIDED, AGAINST THE TAX IMPOSED BY
THIS ARTICLE, WHERE THE TAXPAYER HAS BEEN CERTIFIED PURSUANT TO SECTION
THIRTY-ONE HUNDRED SIXTY-SIX OF THE PUBLIC AUTHORITIES LAW. THE AMOUNT
OF SUCH CREDIT SHALL BE AS PRESCRIBED IN PARAGRAPH (D) OF THIS SUBDIVI-
SION.
(B) "DISCOVERY WAGES" MEANS WAGES PAID BY THE TAXPAYER FOR FULL-TIME
EMPLOYMENT DURING A TAXABLY YEAR, PROVIDED THAT THOSE WAGES ARE PAID BY
A CERTIFIED BUSINESS AS DEFINED BY THE FOUNDATION AS REQUIRED IN ITS
RESPONSIBILITIES.
(C) THE CREDIT PROVIDED IN THIS SUBDIVISION SHALL BE ALLOWED ONLY
WHERE THE AVERAGE NUMBER OF INDIVIDUALS EMPLOYED FULL-TIME BY THE
TAXPAYER IN THE STATE, DURING THE TAXABLE YEAR EXCEEDS THE AVERAGE
NUMBER OF SUCH INDIVIDUALS EMPLOYED FULL-TIME BY THE TAXPAYER IN THE
PREVIOUS TAXABLE YEAR.
(D) THE AMOUNT OF THE CREDIT SHALL EQUAL THE SUM OF THE PRODUCT OF
THREE THOUSAND DOLLARS AND THE AVERAGE NUMBER OF INDIVIDUALS EMPLOYED
FULL-TIME BY THE TAXPAYER, COMPUTED PURSUANT TO PROVISIONS OF PARAGRAPH
(C) OF THIS SUBDIVISION.
(E) IF THE AMOUNT OF THIS CREDIT AND CARRYOVERS OF SUCH CREDIT ALLOWED
UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S
TAX FOR SUCH YEAR, THE EXCESS, AS WELL AS ANY PART OF THE CREDIT OR
CARRYOVERS OF SUCH CREDIT, OR BOTH, WHICH MAY NOT BE DEDUCTED FROM THE
TAX OTHERWISE DUE BY REASON OF PARAGRAPH (D) OF THIS SUBDIVISION, MAY BE
CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND MAY BE DEDUCTED FROM THE
TAXPAYER'S TAX FOR SUCH YEAR OR YEARS.
A. 11302 9
S 7. Section 606 of the tax law is amended by adding two new
subsections (j-2) and (j-3) to read as follows:
(J-2) DISCOVERY INVESTMENT CREDIT. (1) A TAXPAYER SHALL BE ALLOWED A
CREDIT, TO BE COMPUTED AS HEREINAFTER PROVIDED, AGAINST THE TAX IMPOSED
BY THIS ARTICLE WHERE THE TAXPAYER HAS BEEN CERTIFIED PURSUANT TO
SECTION THIRTY-ONE HUNDRED SIXTY-SIX OF THE PUBLIC AUTHORITIES LAW. THE
AMOUNT OF SUCH CREDIT SHALL BE TWENTY PERCENT OF THE COST OR OTHER BASIS
FOR FEDERAL INCOME TAX PURPOSES OF TANGIBLE PERSONAL PROPERTY AND OTHER
TANGIBLE PROPERTY, INCLUDING BUILDINGS AND STRUCTURAL COMPONENTS OF
BUILDINGS, DESCRIBED IN PARAGRAPH TWO OF THIS SUBSECTION, BUT ONLY IF
THE ACQUISITION, CONSTRUCTION, RECONSTRUCTION OR ERECTION OF SUCH PROP-
ERTY OCCURRED OR WAS COMMENCED ON OR AFTER THE DATE OF SUCH DESIGNATION
AND PRIOR TO THE EXPIRATION THEREOF. PROVIDED, HOWEVER, THAT IN THE CASE
OF AN ACQUISITION, CONSTRUCTION, RECONSTRUCTION OR ERECTION WHICH WAS
COMMENCED DURING SUCH PERIOD AND CONTINUED OR COMPLETED SUBSEQUENTLY,
THE CREDIT SHALL BE TWENTY PERCENT OF THE PORTION OF THE COST OR OTHER
BASIS FOR FEDERAL INCOME TAX PURPOSES ATTRIBUTABLE TO SUCH PERIOD, WHICH
PORTION SHALL BE ASCERTAINED BY MULTIPLYING SUCH COST OR BASIS BY A
FRACTION THE NUMERATOR OF WHICH SHALL BE THE EXPENDITURES PAID OR
INCURRED DURING SUCH PERIOD FOR SUCH PURPOSES AND THE DENOMINATOR OF
WHICH SHALL BE THE TOTAL OF ALL EXPENDITURES PAID OR INCURRED FOR SUCH
ACQUISITION, CONSTRUCTION, RECONSTRUCTION OR ERECTION.
(2) A CREDIT SHALL BE ALLOWED UNDER THIS SUBSECTION WITH RESPECT TO
TANGIBLE PERSONAL PROPERTY AND OTHER TANGIBLE PROPERTY, INCLUDING BUILD-
INGS AND STRUCTURAL COMPONENTS OF BUILDINGS WHICH: (A) ARE DEPRECIABLE
PURSUANT TO SECTION ONE HUNDRED SIXTY-SEVEN OF THE INTERNAL REVENUE
CODE, (B) HAVE A USEFUL LIFE OF FOUR YEARS OR MORE, (C) ARE ACQUIRED BY
PURCHASE AS DEFINED IN SECTION ONE HUNDRED SEVENTY-NINE (D) OF THE
INTERNAL REVENUE CODE, AND (D) ARE (I) PRINCIPALLY USED BY THE TAXPAYER
IN THE PRODUCTION OF GOODS BY MANUFACTURING, PROCESSING, ASSEMBLING,
REFINING, MINING, EXTRACTING, FARMING, AGRICULTURE, HORTICULTURE, FLORI-
CULTURE, VITICULTURE OR COMMERCIAL FISHING, (II) INDUSTRIAL WASTE TREAT-
MENT FACILITIES OR AIR POLLUTION CONTROL FACILITIES USED IN THE TAXPAY-
ER'S TRADE OR BUSINESS, (III) RESEARCH AND DEVELOPMENT PROPERTY, (IV)
PRINCIPALLY USED IN THE ORDINARY COURSE OF THE TAXPAYER'S TRADE OR BUSI-
NESS AS A BROKER OR DEALER IN CONNECTION WITH THE PURCHASE OR SALE
(WHICH SHALL INCLUDE BUT NOT BE LIMITED TO THE ISSUANCE, ENTERING INTO,
ASSUMPTION, OFFSET, ASSIGNMENT, TERMINATION, OR TRANSFER) OF STOCKS,
BONDS OR OTHER SECURITIES AS DEFINED IN SECTION FOUR HUNDRED
SEVENTY-FIVE (C)(2) OF THE INTERNAL REVENUE CODE, OR OF COMMODITIES AS
DEFINED IN SECTION FOUR HUNDRED SEVENTY-FIVE (E) OF THE INTERNAL REVENUE
CODE, OR (V) PRINCIPALLY USED IN THE ORDINARY COURSE OF THE TAXPAYER'S
TRADE OR BUSINESS OF PROVIDING INVESTMENT ADVISORY SERVICES FOR REGU-
LATED INVESTMENT COMPANY AS DEFINED IN SECTION EIGHT HUNDRED FIFTY-ONE
OF THE INTERNAL REVENUE CODE, OR LENDING, LOAN ARRANGEMENT OR LOAN ORIG-
INATION SERVICES TO CUSTOMERS IN CONNECTION WITH THE PURCHASE OR SALE
(WHICH SHALL INCLUDE BUT NOT BE LIMITED TO THE ISSUANCE, ENTERING INTO,
ASSUMPTION, OFFSET, ASSIGNMENT, TERMINATION, OR TRANSFER) OF SECURITIES
AS DEFINED IN SECTION FOUR HUNDRED SEVENTY-FIVE(C)(2) OF THE INTERNAL
REVENUE CODE. FOR PURPOSES OF CLAUSES (IV) AND (V) OF THIS SUBPARAGRAPH,
PROPERTY PURCHASED BY A TAXPAYER AFFILIATED WITH A REGULATED BROKER,
DEALER OR REGISTERED INVESTMENT ADVISER IS ALLOWED A CREDIT UNDER THIS
SUBSECTION IF THE PROPERTY IS USED BY ITS AFFILIATED REGULATED BROKER,
DEALER OR REGISTERED INVESTMENT ADVISER IN ACCORDANCE WITH THIS
SUBSECTION. FOR PURPOSES OF DETERMINING IF THE PROPERTY IS PRINCIPALLY
USED IN QUALIFYING USES, THE USES BY THE TAXPAYER DESCRIBED IN CLAUSES
A. 11302 10
(IV) AND (V) OF THIS SUBPARAGRAPH MAY BE AGGREGATED. IN ADDITION, THE
USES BY THE TAXPAYER, ITS AFFILIATED REGULATED BROKER, DEALER, AND
REGISTERED INVESTMENT ADVISER UNDER EITHER OR BOTH OF THOSE CLAUSES MAY
BE AGGREGATED. PROVIDED, HOWEVER, A TAXPAYER SHALL NOT BE ALLOWED THE
CREDIT PROVIDED BY CLAUSES (IV) AND (V) OF THIS SUBPARAGRAPH UNLESS (I)
EIGHTY PERCENT OR MORE OF THE EMPLOYEES PERFORMING THE ADMINISTRATIVE
AND SUPPORT FUNCTIONS RESULTING FROM OR RELATED TO THE QUALIFYING USES
OF SUCH EQUIPMENT ARE LOCATED IN THIS STATE, OR (II) THE AVERAGE NUMBER
OF EMPLOYEES THAT PERFORM THE ADMINISTRATIVE AND SUPPORT FUNCTIONS
RESULTING FROM OR RELATED TO THE QUALIFYING USES OF SUCH EQUIPMENT AND
ARE LOCATED IN THIS STATE DURING THE TAXABLE YEAR FOR WHICH THE CREDIT
IS CLAIMED IS EQUAL TO OR GREATER THAN NINETY-FIVE PERCENT OF THE AVER-
AGE NUMBER OF EMPLOYEES THAT PERFORM THESE FUNCTIONS AND ARE LOCATED IN
THIS STATE DURING THE THIRTY-SIX MONTHS IMMEDIATELY PRECEDING THE YEAR
FOR WHICH THE CREDIT IS CLAIMED, OR (III) THE NUMBER OF EMPLOYEES
LOCATED IN THIS STATE DURING THE TAXABLE YEAR FOR WHICH THE CREDIT IS
CLAIMED IS EQUAL TO OR GREATER THAN NINETY PERCENT OF THE NUMBER OF
EMPLOYEES LOCATED IN THIS STATE ON DECEMBER THIRTY-FIRST, NINETEEN
HUNDRED NINETY-EIGHT OR, IF THE TAXPAYER WAS NOT A CALENDAR YEAR TAXPAY-
ER IN NINETEEN HUNDRED NINETY-EIGHT, THE LAST DAY OF ITS FIRST TAXABLE
YEAR ENDING AFTER DECEMBER THIRTY-FIRST, NINETEEN HUNDRED NINETY-EIGHT.
IF THE TAXPAYER BECOMES SUBJECT TO TAX IN THIS STATE AFTER THE TAXABLE
YEAR BEGINNING IN NINETEEN HUNDRED NINETY-EIGHT, THEN THE TAXPAYER IS
NOT REQUIRED TO SATISFY THE EMPLOYMENT TEST PROVIDED IN THE PRECEDING
SENTENCE OF THIS SUBPARAGRAPH FOR ITS FIRST TAXABLE YEAR. FOR PURPOSES
OF ITEM (III) OF THIS CLAUSE, THE EMPLOYMENT TEST WILL BE BASED ON THE
NUMBER OF EMPLOYEES LOCATED IN THIS STATE ON THE LAST DAY OF THE FIRST
TAXABLE YEAR THE TAXPAYER IS SUBJECT TO TAX IN THIS STATE. IF THE USES
OF THE PROPERTY MUST BE AGGREGATED TO DETERMINE WHETHER THE PROPERTY IS
PRINCIPALLY USED IN QUALIFYING USES, THEN EITHER EACH AFFILIATE USING
THE PROPERTY MUST SATISFY THIS EMPLOYMENT TEST OR THIS EMPLOYMENT TEST
MUST BE SATISFIED THROUGH THE AGGREGATION OF THE EMPLOYEES OF THE
TAXPAYER, ITS AFFILIATED REGULATED BROKER, DEALER, AND REGISTERED
INVESTMENT ADVISOR USING THE PROPERTY. FOR PURPOSES OF THIS SUBSECTION,
THE TERM "GOODS" SHALL NOT INCLUDE ELECTRICITY. FOR PURPOSES OF THIS
PARAGRAPH, MANUFACTURING SHALL MEAN THE PROCESS OF WORKING RAW MATERIALS
INTO WARES SUITABLE FOR USE OR WHICH GIVES NEW SHAPES, NEW QUALITY OR
NEW COMBINATION TO MATTER WHICH ALREADY HAS GONE THROUGH SOME ARTIFICIAL
PROCESS BY THE USE OF MACHINERY, TOOLS, APPLIANCES AND OTHER SIMILAR
EQUIPMENT. PROPERTY USED IN THE PRODUCTION OF GOODS SHALL INCLUDE
MACHINERY, EQUIPMENT OR OTHER TANGIBLE PROPERTY WHICH IS PRINCIPALLY
USED IN THE REPAIR AND SERVICE OF OTHER MACHINERY, EQUIPMENT OR OTHER
TANGIBLE PROPERTY USED PRINCIPALLY IN THE PRODUCTION OF GOODS AND SHALL
INCLUDE ALL FACILITIES USED IN THE PRODUCTION OPERATION, INCLUDING STOR-
AGE OF MATERIAL TO BE USED IN PRODUCTION AND OF THE PRODUCTS THAT ARE
PRODUCED. FOR PURPOSES OF THIS PARAGRAPH, THE TERMS "INDUSTRIAL WASTE
TREATMENT FACILITIES", "AIR POLLUTION CONTROL FACILITIES" AND "RESEARCH
AND DEVELOPMENT PROPERTY" SHALL HAVE THE MEANINGS ASCRIBED THERETO BY
CLAUSES (II) AND (III), RESPECTIVELY, OF SUBPARAGRAPH (D) OF THIS PARA-
GRAPH, AND THE PROVISIONS OF SUBPARAGRAPH (C) OF THIS PARAGRAPH.
(3) A TAXPAYER SHALL NOT BE ALLOWED A CREDIT UNDER THIS SUBSECTION
WITH RESPECT TO ANY TANGIBLE PERSONAL PROPERTY AND OTHER TANGIBLE PROP-
ERTY, INCLUDING BUILDINGS AND STRUCTURAL COMPONENTS OF BUILDINGS, WHICH
IT LEASES TO ANY OTHER PERSON OR CORPORATION EXCEPT WHERE A TAXPAYER
LEASES PROPERTY TO AN AFFILIATED REGULATED BROKER, DEALER, OR REGISTERED
INVESTMENT ADVISER THAT USES SUCH PROPERTY IN ACCORDANCE WITH CLAUSE
A. 11302 11
(IV) OR (V) OF SUBPARAGRAPH (D) OF PARAGRAPH TWO OF THIS SUBSECTION. FOR
PURPOSES OF THE PRECEDING SENTENCE, ANY CONTRACT OR AGREEMENT TO LEASE
OR RENT OR FOR A LICENSE TO USE SUCH PROPERTY SHALL BE CONSIDERED A
LEASE. PROVIDED, HOWEVER, IN DETERMINING WHETHER A TAXPAYER SHALL BE
ALLOWED A CREDIT UNDER THIS SUBSECTION WITH RESPECT TO SUCH PROPERTY,
ANY ELECTION MADE WITH RESPECT TO SUCH PROPERTY PURSUANT TO THE
PROVISIONS OF PARAGRAPH EIGHT OF SUBSECTION (F) OF SECTION ONE HUNDRED
SIXTY-EIGHT OF THE INTERNAL REVENUE CODE, AS SUCH PARAGRAPH WAS IN
EFFECT FOR AGREEMENTS ENTERED INTO PRIOR TO JANUARY FIRST, NINETEEN
HUNDRED EIGHTY-FOUR, SHALL BE DISREGARDED.
(4) IF THE AMOUNT OF CREDIT ALLOWED UNDER THIS SUBSECTION FOR ANY
TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S TAX FOR SUCH YEAR, THE EXCESS
MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND MAY BE DEDUCTED
FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS. ANY REFUND PAID PURSU-
ANT TO THIS PARAGRAPH SHALL BE DEEMED TO BE A REFUND OF AN OVERPAYMENT
OF TAX AS PROVIDED IN SECTION SIX HUNDRED EIGHTY-SIX OF THIS CHAPTER,
PROVIDED, HOWEVER, THAT NO INTEREST SHALL BE PAID THEREON.
(J-3) DISCOVERY WAGE TAX CREDIT. (1) A TAXPAYER SHALL BE ALLOWED A
CREDIT, TO BE COMPUTED AS HEREINAFTER PROVIDED, AGAINST THE TAX IMPOSED
BY THIS ARTICLE, WHERE THE TAXPAYER HAS BEEN CERTIFIED PURSUANT TO
SECTION THIRTY-ONE HUNDRED SIXTY-SIX OF THE PUBLIC AUTHORITIES LAW. THE
AMOUNT OF SUCH CREDIT SHALL BE AS PRESCRIBED IN PARAGRAPH FOUR OF THIS
SUBSECTION.
(2) "DISCOVERY WAGES" MEANS WAGES PAID BY THE TAXPAYER FOR FULL-TIME
EMPLOYMENT DURING A TAXABLE YEAR, PROVIDED THAT THOSE WAGES ARE PAID BY
A CERTIFIED BUSINESS AS DEFINED BY THE FOUNDATION AS REQUIRED IN ITS
RESPONSIBILITIES.
(3) THE CREDIT PROVIDED IN THIS SUBSECTION SHALL BE ALLOWED ONLY WHERE
THE AVERAGE NUMBER OF INDIVIDUALS EMPLOYED FULL-TIME BY THE TAXPAYER IN
THE STATE, DURING THE TAXABLE YEAR EXCEEDS THE AVERAGE NUMBER OF SUCH
INDIVIDUALS EMPLOYED FULL-TIME BY THE TAXPAYER IN THE PREVIOUS TAXABLE
YEAR.
(4) THE AMOUNT OF THE CREDIT SHALL EQUAL THE SUM OF THE PRODUCT OF
THREE THOUSAND DOLLARS AND THE AVERAGE NUMBER OF INDIVIDUALS EMPLOYED
FULL-TIME BY THE TAXPAYER, COMPUTED PURSUANT TO PROVISIONS OF PARAGRAPH
THREE OF THIS SUBSECTION.
(5) IF THE AMOUNT OF THIS CREDIT AND CARRYOVERS OF SUCH CREDIT ALLOWED
UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S
TAX FOR SUCH YEAR, THE EXCESS, AS WELL AS ANY PART OF THE CREDIT OR
CARRYOVERS OF SUCH CREDIT, OR BOTH, WHICH MAY NOT BE DEDUCTED FROM THE
TAX OTHERWISE DUE BY REASON OF PARAGRAPH FOUR OF THIS SUBSECTION, MAY BE
CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND MAY BE DEDUCTED FROM THE
TAXPAYER'S TAX FOR SUCH YEAR OR YEARS.
S 8. Section 1456 of the tax law is amended by adding two new
subsections (u) and (v) to read as follows:
(U) DISCOVERY INVESTMENT CREDIT. (1) A TAXPAYER SHALL BE ALLOWED A
CREDIT, TO BE COMPUTED AS HEREINAFTER PROVIDED, AGAINST THE TAX IMPOSED
BY THIS ARTICLE WHERE THE TAXPAYER HAS BEEN CERTIFIED PURSUANT TO
SECTION THIRTY-ONE HUNDRED SIXTY-SIX OF THE PUBLIC AUTHORITIES LAW. THE
AMOUNT OF SUCH CREDIT SHALL BE TWENTY PERCENT OF THE COST OR OTHER BASIS
FOR FEDERAL INCOME TAX PURPOSES OF TANGIBLE PERSONAL PROPERTY AND OTHER
TANGIBLE PROPERTY, INCLUDING BUILDINGS AND STRUCTURAL COMPONENTS OF
BUILDINGS, DESCRIBED IN PARAGRAPH TWO OF THIS SUBSECTION, BUT ONLY IF
THE ACQUISITION, CONSTRUCTION, RECONSTRUCTION OR ERECTION OF SUCH PROP-
ERTY OCCURRED OR WAS COMMENCED ON OR AFTER THE DATE OF SUCH DESIGNATION
AND PRIOR TO THE EXPIRATION THEREOF. PROVIDED, HOWEVER, THAT IN THE CASE
A. 11302 12
OF AN ACQUISITION, CONSTRUCTION, RECONSTRUCTION OR ERECTION WHICH WAS
COMMENCED DURING SUCH PERIOD AND CONTINUED OR COMPLETED SUBSEQUENTLY,
THE CREDIT SHALL BE TWENTY PERCENT OF THE PORTION OF THE COST OR OTHER
BASIS FOR FEDERAL INCOME TAX PURPOSES ATTRIBUTABLE TO SUCH PERIOD, WHICH
PORTION SHALL BE ASCERTAINED BY MULTIPLYING SUCH COST OR BASIS BY A
FRACTION THE NUMERATOR OF WHICH SHALL BE THE EXPENDITURES PAID OR
INCURRED DURING SUCH PERIOD FOR SUCH PURPOSES AND THE DENOMINATOR OF
WHICH SHALL BE THE TOTAL OF ALL EXPENDITURES PAID OR INCURRED FOR SUCH
ACQUISITION, CONSTRUCTION, RECONSTRUCTION OR ERECTION.
(2) A CREDIT SHALL BE ALLOWED UNDER THIS SUBSECTION WITH RESPECT TO
TANGIBLE PERSONAL PROPERTY AND OTHER TANGIBLE PROPERTY, INCLUDING BUILD-
INGS AND STRUCTURAL COMPONENTS OF BUILDINGS WHICH: (A) ARE DEPRECIABLE
PURSUANT TO SECTION ONE HUNDRED SIXTY-SEVEN OF THE INTERNAL REVENUE
CODE, (B) HAVE A USEFUL LIFE OF FOUR YEARS OR MORE, (C) ARE ACQUIRED BY
PURCHASE AS DEFINED IN SECTION ONE HUNDRED SEVENTY-NINE (D) OF THE
INTERNAL REVENUE CODE, AND (D) ARE (I) PRINCIPALLY USED BY THE TAXPAYER
IN THE PRODUCTION OF GOODS BY MANUFACTURING, PROCESSING, ASSEMBLING,
REFINING, MINING, EXTRACTING, FARMING, AGRICULTURE, HORTICULTURE, FLORI-
CULTURE, VITICULTURE OR COMMERCIAL FISHING, (II) INDUSTRIAL WASTE TREAT-
MENT FACILITIES OR AIR POLLUTION CONTROL FACILITIES USED IN THE TAXPAY-
ER'S TRADE OR BUSINESS, (III) RESEARCH AND DEVELOPMENT PROPERTY, (IV)
PRINCIPALLY USED IN THE ORDINARY COURSE OF THE TAXPAYER'S TRADE OR BUSI-
NESS AS A BROKER OR DEALER IN CONNECTION WITH THE PURCHASE OR SALE
(WHICH SHALL INCLUDE BUT NOT BE LIMITED TO THE ISSUANCE, ENTERING INTO,
ASSUMPTION, OFFSET, ASSIGNMENT, TERMINATION, OR TRANSFER) OF STOCKS,
BONDS OR OTHER SECURITIES AS DEFINED IN SECTION FOUR HUNDRED
SEVENTY-FIVE (C)(2) OF THE INTERNAL REVENUE CODE, OR OF COMMODITIES AS
DEFINED IN SECTION FOUR HUNDRED SEVENTY-FIVE (E) OF THE INTERNAL REVENUE
CODE, OR (V) PRINCIPALLY USED IN THE ORDINARY COURSE OF THE TAXPAYER'S
TRADE OR BUSINESS OF PROVIDING INVESTMENT ADVISORY SERVICES FOR A REGU-
LATED INVESTMENT COMPANY AS DEFINED IN SECTION EIGHT HUNDRED FIFTY-ONE
OF THE INTERNAL REVENUE CODE, OR LENDING, LOAN ARRANGEMENT OR LOAN ORIG-
INATION SERVICES TO CUSTOMERS IN CONNECTION WITH THE PURCHASE OR SALE
(WHICH SHALL INCLUDE BUT NOT BE LIMITED TO THE ISSUANCE, ENTERING INTO,
ASSUMPTION, OFFSET, ASSIGNMENT, TERMINATION, OR TRANSFER) OF SECURITIES
AS DEFINED IN SECTION FOUR HUNDRED SEVENTY-FIVE (C)(2) OF THE INTERNAL
REVENUE CODE. FOR PURPOSES OF CLAUSES (IV) AND (V) OF THIS SUBPARAGRAPH,
PROPERTY PURCHASED BY A TAXPAYER AFFILIATED WITH A REGULATED BROKER,
DEALER OR REGISTERED INVESTMENT ADVISER IS ALLOWED A CREDIT UNDER THIS
SUBSECTION IF THE PROPERTY IS USED BY ITS AFFILIATED REGULATED BROKER,
DEALER OR REGISTERED INVESTMENT ADVISER IN ACCORDANCE WITH THIS
SUBSECTION. FOR PURPOSES OF DETERMINING IF THE PROPERTY IS PRINCIPALLY
USED IN QUALIFYING USES, THE USES BY THE TAXPAYER DESCRIBED IN CLAUSES
(IV) AND (V) OF THIS SUBPARAGRAPH MAY BE AGGREGATED. IN ADDITION, THE
USES BY THE TAXPAYER, ITS AFFILIATED REGULATED BROKER, DEALER, AND
REGISTERED INVESTMENT ADVISER UNDER EITHER OR BOTH OF THOSE CLAUSES MAY
BE AGGREGATED. PROVIDED, HOWEVER, A TAXPAYER SHALL NOT BE ALLOWED THE
CREDIT PROVIDED BY CLAUSES (IV) AND (V) OF THIS SUBPARAGRAPH UNLESS (I)
EIGHTY PERCENT OR MORE OF THE EMPLOYEES PERFORMING THE ADMINISTRATIVE
AND SUPPORT FUNCTIONS RESULTING FROM OR RELATED TO THE QUALIFYING USES
OF SUCH EQUIPMENT ARE LOCATED IN THIS STATE, OR (II) THE AVERAGE NUMBER
OF EMPLOYEES THAT PERFORM THE ADMINISTRATIVE AND SUPPORT FUNCTIONS
RESULTING FROM OR RELATED TO THE QUALIFYING USES OF SUCH EQUIPMENT AND
ARE LOCATED IN THIS STATE DURING THE TAXABLE YEAR FOR WHICH THE CREDIT
IS CLAIMED IS EQUAL TO OR GREATER THAN NINETY-FIVE PERCENT OF THE AVER-
AGE NUMBER OF EMPLOYEES THAT PERFORM THESE FUNCTIONS AND ARE LOCATED IN
A. 11302 13
THIS STATE DURING THE THIRTY-SIX MONTHS IMMEDIATELY PRECEDING THE YEAR
FOR WHICH THE CREDIT IS CLAIMED, OR (III) THE NUMBER OF EMPLOYEES
LOCATED IN THIS STATE DURING THE TAXABLE YEAR FOR WHICH THE CREDIT IS
CLAIMED IS EQUAL TO OR GREATER THAN NINETY PERCENT OF THE NUMBER OF
EMPLOYEES LOCATED IN THIS STATE ON DECEMBER THIRTY-FIRST, NINETEEN
HUNDRED NINETY-EIGHT OR, IF THE TAXPAYER WAS NOT A CALENDAR YEAR TAXPAY-
ER IN NINETEEN HUNDRED NINETY-EIGHT, THE LAST DAY OF ITS FIRST TAXABLE
YEAR ENDING AFTER DECEMBER THIRTY-FIRST, NINETEEN HUNDRED NINETY-EIGHT.
IF THE TAXPAYER BECOMES SUBJECT TO TAX IN THIS STATE AFTER THE TAXABLE
YEAR BEGINNING IN NINETEEN HUNDRED NINETY-EIGHT, THEN THE TAXPAYER IS
NOT REQUIRED TO SATISFY THE EMPLOYMENT TEST PROVIDED IN THE PRECEDING
SENTENCE OF THIS SUBPARAGRAPH FOR ITS FIRST TAXABLE YEAR. FOR PURPOSES
OF ITEM (III) OF THIS CLAUSE, THE EMPLOYMENT TEST WILL BE BASED ON THE
NUMBER OF EMPLOYEES LOCATED IN THIS STATE ON THE LAST DAY OF THE FIRST
TAXABLE YEAR THE TAXPAYER IS SUBJECT TO TAX IN THIS STATE. IF THE USES
OF THE PROPERTY MUST BE AGGREGATED TO DETERMINE WHETHER THE PROPERTY IS
PRINCIPALLY USED IN QUALIFYING USES, THEN EITHER EACH AFFILIATE USING
THE PROPERTY MUST SATISFY THIS EMPLOYMENT TEST OR THIS EMPLOYMENT TEST
MUST BE SATISFIED THROUGH THE AGGREGATION OF THE EMPLOYEES OF THE
TAXPAYER, ITS AFFILIATED REGULATED BROKER, DEALER, AND REGISTERED
INVESTMENT ADVISER USING THE PROPERTY. FOR PURPOSES OF THIS SUBSECTION,
THE TERM "GOODS" SHALL NOT INCLUDE ELECTRICITY. FOR PURPOSES OF THIS
PARAGRAPH, MANUFACTURING SHALL MEAN THE PROCESS OF WORKING RAW MATERIALS
INTO WARES SUITABLE FOR USE OR WHICH GIVES NEW SHAPES, NEW QUALITY OR
NEW COMBINATION TO MATTER WHICH ALREADY HAS GONE THROUGH SOME ARTIFICIAL
PROCESS BY THE USE OF MACHINERY, TOOLS, APPLIANCES AND OTHER SIMILAR
EQUIPMENT. PROPERTY USED IN THE PRODUCTION OF GOODS SHALL INCLUDE
MACHINERY, EQUIPMENT OR OTHER TANGIBLE PROPERTY WHICH IS PRINCIPALLY
USED IN THE REPAIR AND SERVICE OF OTHER MACHINERY, EQUIPMENT OR OTHER
TANGIBLE PROPERTY USED PRINCIPALLY IN THE PRODUCTION OF GOODS AND SHALL
INCLUDE ALL FACILITIES USED IN THE PRODUCTION OPERATION, INCLUDING STOR-
AGE OF MATERIAL TO BE USED IN PRODUCTION AND OF THE PRODUCTS THAT ARE
PRODUCED. FOR PURPOSES OF THIS PARAGRAPH, THE TERMS "INDUSTRIAL WASTE
TREATMENT FACILITIES", AND "AIR POLLUTION CONTROL FACILITIES" AND
"RESEARCH AND DEVELOPMENT PROPERTY" SHALL HAVE THE MEANINGS ASCRIBED
THERETO BY CLAUSES (II) AND (III), RESPECTIVELY, OF SUBPARAGRAPH (D) OF
THIS PARAGRAPH, AND THE PROVISIONS OF SUBPARAGRAPH (C) OF THIS PARAGRAPH
SHALL APPLY.
(3) A TAXPAYER SHALL NOT BE ALLOWED A CREDIT UNDER THIS SUBSECTION
WITH RESPECT TO ANY TANGIBLE PERSONAL PROPERTY AND OTHER TANGIBLE PROP-
ERTY, INCLUDING BUILDINGS AND STRUCTURAL COMPONENTS OF BUILDINGS, WHICH
IT LEASES TO ANY OTHER PERSON OR CORPORATION EXCEPT WHERE A TAXPAYER
LEASES PROPERTY TO AN AFFILIATED REGULATED BROKER, DEALER, OR REGISTERED
INVESTMENT ADVISER THAT USES SUCH PROPERTY IN ACCORDANCE WITH CLAUSE
(IV) OR (V) OF SUBPARAGRAPH (D) OF PARAGRAPH TWO OF THIS SUBSECTION. FOR
PURPOSES OF THE PRECEDING SENTENCE, ANY CONTRACT OR AGREEMENT TO LEASE
OR RENT OR FOR A LICENSE TO USE SUCH PROPERTY SHALL BE CONSIDERED A
LEASE. PROVIDED, HOWEVER, IN DETERMINING WHETHER A TAXPAYER SHALL BE
ALLOWED A CREDIT UNDER THIS SUBSECTION WITH RESPECT TO SUCH PROPERTY,
ANY ELECTION MADE WITH RESPECT TO SUCH PROPERTY PURSUANT TO THE
PROVISIONS OF PARAGRAPH EIGHT OF SUBSECTION (F) OF SECTION ONE HUNDRED
SIXTY-EIGHT OF THE INTERNAL REVENUE CODE, AS SUCH PARAGRAPH WAS IN
EFFECT FOR AGREEMENTS ENTERED INTO PRIOR TO JANUARY FIRST, NINETEEN
HUNDRED EIGHTY-FOUR, SHALL BE DISREGARDED.
(4) IF THE AMOUNT OF CREDIT ALLOWED UNDER THIS SUBSECTION FOR ANY
TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S TAX FOR SUCH YEAR, THE EXCESS
A. 11302 14
MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND MAY BE DEDUCTED
FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS. ANY REFUND PAID PURSUANT
TO THIS PARAGRAPH SHALL BE DEEMED TO BE A REFUND OF AN OVERPAYMENT OF
TAX AS PROVIDED IN SECTION SIX HUNDRED EIGHTY-SIX OF THIS CHAPTER,
PROVIDED, HOWEVER, THAT NO INTEREST SHALL BE PAID THEREON.
(V) DISCOVERY WAGE TAX CREDIT. (1) A TAXPAYER SHALL BE ALLOWED A CRED-
IT, TO BE COMPUTED AS HEREINAFTER PROVIDED, AGAINST THE TAX IMPOSED BY
THIS ARTICLE, WHERE THE TAXPAYER HAS BEEN CERTIFIED PURSUANT TO SECTION
THIRTY-ONE HUNDRED SIXTY-SIX OF THE PUBLIC AUTHORITIES LAW. THE AMOUNT
OF SUCH CREDIT SHALL BE AS PRESCRIBED IN PARAGRAPH FOUR OF THIS
SUBSECTION.
(2) "DISCOVERY WAGES" MEANS WAGES PAID BY THE TAXPAYER FOR FULL-TIME
EMPLOYMENT DURING A TAXABLE YEAR, PROVIDED THAT THOSE WAGES ARE PAID BY
A CERTIFIED BUSINESS AS DEFINED BY THE FOUNDATION AS REQUIRED IN ITS
RESPONSIBILITIES.
(3) THE CREDIT PROVIDED IN THIS SUBSECTION SHALL BE ALLOWED ONLY WHERE
THE AVERAGE NUMBER OF INDIVIDUALS EMPLOYED FULL-TIME BY THE TAXPAYER IN
THE STATE, DURING THE TAXABLE YEAR EXCEEDS THE AVERAGE NUMBER OF SUCH
INDIVIDUALS EMPLOYED FULL-TIME BY THE TAXPAYER IN THE PREVIOUS TAXABLE
YEAR.
(4) THE AMOUNT OF THE CREDIT SHALL EQUAL THE SUM OF THE PRODUCT OF
THREE THOUSAND DOLLARS AND THE AVERAGE NUMBER OF INDIVIDUALS EMPLOYED
FULL-TIME BY THE TAXPAYER, COMPUTED PURSUANT TO PROVISIONS OF PARAGRAPH
THREE OF THIS SUBSECTION.
(5) IF THE AMOUNT OF THIS CREDIT AND CARRYOVERS OF SUCH CREDIT ALLOWED
UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S
TAX FOR SUCH YEAR, THE EXCESS, AS WELL AS ANY PART OF THE CREDIT OR
CARRYOVERS OF SUCH CREDIT, OR BOTH, WHICH MAY NOT BE DEDUCTED FROM THE
TAX OTHERWISE DUE BY REASON OF PARAGRAPH FOUR OF THIS SUBSECTION, MAY BE
CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND MAY BE DEDUCTED FROM THE
TAXPAYER'S TAX FOR SUCH YEAR OR YEARS.
S 9. Section 1511 of the tax law is amended by adding two new subdivi-
sions (y) and (z) to read as follows:
(Y) DISCOVERY INVESTMENT CREDIT. (1) A TAXPAYER SHALL BE ALLOWED A
CREDIT, TO BE COMPUTED AS HEREINAFTER PROVIDED, AGAINST THE TAX IMPOSED
BY THIS ARTICLE WHERE THE TAXPAYER HAS BEEN CERTIFIED PURSUANT TO
SECTION THIRTY-ONE HUNDRED SIXTY-SIX OF THE PUBLIC AUTHORITIES LAW. THE
AMOUNT OF SUCH CREDIT SHALL BE TWENTY PERCENT OF THE COST OR OTHER BASIS
FOR FEDERAL INCOME TAX PURPOSES OF TANGIBLE PERSONAL PROPERTY AND OTHER
TANGIBLE PROPERTY, INCLUDING BUILDINGS AND STRUCTURAL COMPONENTS OF
BUILDINGS, DESCRIBED IN PARAGRAPH TWO OF THIS SUBDIVISION, BUT ONLY IF
THE ACQUISITION, CONSTRUCTION, RECONSTRUCTION OR ERECTION OF SUCH PROP-
ERTY OCCURRED OR WAS COMMENCED ON OR AFTER THE DATE OF SUCH DESIGNATION
AND PRIOR TO THE EXPIRATION THEREOF. PROVIDED, HOWEVER, THAT IN THE CASE
OF AN ACQUISITION, CONSTRUCTION, RECONSTRUCTION OR ERECTION WHICH WAS
COMMENCED DURING SUCH PERIOD AND CONTINUED OR COMPLETED SUBSEQUENTLY,
THE CREDIT SHALL BE TWENTY PERCENT OF THE PORTION OF THE COST OR OTHER
BASIS FOR FEDERAL INCOME TAX PURPOSES ATTRIBUTABLE TO SUCH PERIOD, WHICH
PORTION SHALL BE ASCERTAINED BY MULTIPLYING SUCH COST OR BASIS BY A
FRACTION THE NUMERATOR OF WHICH SHALL BE THE EXPENDITURES PAID OR
INCURRED DURING SUCH PERIOD FOR SUCH PURPOSES AND THE DENOMINATOR OF
WHICH SHALL BE THE TOTAL OF ALL EXPENDITURES PAID OR INCURRED FOR SUCH
ACQUISITION, CONSTRUCTION, RECONSTRUCTION OR ERECTION.
(2) A CREDIT SHALL BE ALLOWED UNDER THIS SUBDIVISION WITH RESPECT TO
TANGIBLE PERSONAL PROPERTY AND OTHER TANGIBLE PROPERTY, INCLUDING BUILD-
INGS AND STRUCTURAL COMPONENTS OF BUILDINGS WHICH: (A) ARE DEPRECIABLE
A. 11302 15
PURSUANT TO SECTION ONE HUNDRED SIXTY-SEVEN OF THE INTERNAL REVENUE
CODE, (B) HAVE A USEFUL LIFE OF FOUR YEARS OR MORE, (C) ARE ACQUIRED BY
PURCHASE AS DEFINED IN SECTION ONE HUNDRED SEVENTY-NINE (D) OF THE
INTERNAL REVENUE CODE, AND (D) ARE (I) PRINCIPALLY USED BY THE TAXPAYER
IN THE PRODUCTION OF GOODS BY MANUFACTURING, PROCESSING, ASSEMBLING,
REFINING, MINING, EXTRACTING, FARMING, AGRICULTURE, HORTICULTURE, FLORI-
CULTURE, VITICULTURE OR COMMERCIAL FISHING, (II) INDUSTRIAL WASTE TREAT-
MENT FACILITIES OR AIR POLLUTION CONTROL FACILITIES USED IN THE TAXPAY-
ER'S TRADE OR BUSINESS, (III) RESEARCH AND DEVELOPMENT PROPERTY, (IV)
PRINCIPALLY USED IN THE ORDINARY COURSE OF THE TAXPAYER'S TRADE OR BUSI-
NESS AS A BROKER OR DEALER IN CONNECTION WITH THE PURCHASE OR SALE
(WHICH SHALL INCLUDE BUT NOT BE LIMITED TO THE ISSUANCE, ENTERING INTO,
ASSUMPTION, OFFSET, ASSIGNMENT, TERMINATION, OR TRANSFER) OF STOCKS,
BONDS OR OTHER SECURITIES AS DEFINED IN SECTION FOUR HUNDRED
SEVENTY-FIVE(C)(2) OF THE INTERNAL REVENUE CODE, OR OF COMMODITIES AS
DEFINED IN SECTION FOUR HUNDRED SEVENTY-FIVE (E) OF THE INTERNAL REVENUE
CODE, OR (V) PRINCIPALLY USED IN THE ORDINARY COURSE OF THE TAXPAYER'S
TRADE OR BUSINESS OF PROVIDING INVESTMENT ADVISORY SERVICES FOR A REGU-
LATED INVESTMENT COMPANY AS DEFINED IN SECTION EIGHT HUNDRED FIFTY-ONE
OF THE INTERNAL REVENUE CODE, OR LENDING, LOAN ARRANGEMENT OR LOAN ORIG-
INATION SERVICES TO CUSTOMERS IN CONNECTION WITH THE PURCHASE OR SALE
(WHICH SHALL INCLUDE BUT NOT BE LIMITED TO THE ISSUANCE, ENTERING INTO,
ASSUMPTION, OFFSET, ASSIGNMENT, TERMINATION, OR TRANSFER) OF SECURITIES
AS DEFINED IN SECTION FOUR HUNDRED SEVENTY-FIVE(C)(2) OF THE INTERNAL
REVENUE CODE. FOR PURPOSES OF CLAUSES (IV) AND (V) OF THIS SUBPARAGRAPH,
PROPERTY PURCHASED BY A TAXPAYER AFFILIATED WITH A REGULATED BROKER,
DEALER OR REGISTERED INVESTMENT ADVISER IS ALLOWED A CREDIT UNDER THIS
SUBDIVISION IF THE PROPERTY IS USED BY ITS AFFILIATED REGULATED BROKER,
DEALER OR REGISTERED INVESTMENT ADVISER IN ACCORDANCE WITH THIS SUBDIVI-
SION. FOR PURPOSES OF DETERMINING IF THE PROPERTY IS PRINCIPALLY USED IN
QUALIFYING USES, THE USES BY THE TAXPAYER DESCRIBED IN CLAUSES (IV) AND
(V) OF THIS SUBPARAGRAPH MAY BE AGGREGATED. IN ADDITION, THE USES BY THE
TAXPAYER, ITS AFFILIATED REGULATED BROKER, DEALER, AND REGISTERED
INVESTMENT ADVISER UNDER EITHER OR BOTH OF THOSE CLAUSES MAY BE AGGRE-
GATED. PROVIDED, HOWEVER, A TAXPAYER SHALL NOT BE ALLOWED THE CREDIT
PROVIDED BY CLAUSES (IV) AND (V) OF THIS SUBPARAGRAPH UNLESS (I) EIGHTY
PERCENT OR MORE OF THE EMPLOYEES PERFORMING THE ADMINISTRATIVE AND
SUPPORT FUNCTIONS RESULTING FROM OR RELATED TO THE QUALIFYING USES OF
SUCH EQUIPMENT ARE LOCATED IN THIS STATE, OR (II) THE AVERAGE NUMBER OF
EMPLOYEES THAT PERFORM THE ADMINISTRATIVE AND SUPPORT FUNCTIONS RESULT-
ING FROM OR RELATED TO THE QUALIFYING USES OF SUCH EQUIPMENT AND ARE
LOCATED IN THIS STATE DURING THE TAXABLE YEAR FOR WHICH THE CREDIT IS
CLAIMED IS EQUAL TO OR GREATER THAN NINETY-FIVE PERCENT OF THE AVERAGE
NUMBER OF EMPLOYEES THAT PERFORM THESE FUNCTIONS AND ARE LOCATED IN THIS
STATE DURING THE THIRTY-SIX MONTHS IMMEDIATELY PRECEDING THE YEAR FOR
WHICH THE CREDIT IS CLAIMED, OR (III) THE NUMBER OF EMPLOYEES LOCATED IN
THIS STATE DURING THE TAXABLE YEAR FOR WHICH THE CREDIT IS CLAIMED IS
EQUAL TO OR GREATER THAN NINETY PERCENT OF THE NUMBER OF EMPLOYEES
LOCATED IN THIS STATE ON DECEMBER THIRTY-FIRST, NINETEEN HUNDRED NINE-
TY-EIGHT OR, IF THE TAXPAYER WAS NOT A CALENDAR YEAR TAXPAYER IN NINE-
TEEN HUNDRED NINETY-EIGHT, THE LAST DAY OF ITS FIRST TAXABLE YEAR ENDING
AFTER DECEMBER THIRTY-FIRST, NINETEEN HUNDRED NINETY-EIGHT. IF THE
TAXPAYER BECOMES SUBJECT TO TAX IN THIS STATE AFTER THE TAXABLE YEAR
BEGINNING IN NINETEEN HUNDRED NINETY-EIGHT, THEN THE TAXPAYER IS NOT
REQUIRED TO SATISFY THE EMPLOYMENT TEST PROVIDED IN THE PRECEDING
SENTENCE OF THIS SUBPARAGRAPH FOR ITS FIRST TAXABLE YEAR. FOR PURPOSES
A. 11302 16
OF ITEM (III) OF THIS CLAUSE, THE EMPLOYMENT TEST WILL BE BASED ON THE
NUMBER OF EMPLOYEES LOCATED IN THIS STATE ON THE LAST DAY OF THE FIRST
TAXABLE YEAR THE TAXPAYER IS SUBJECT TO TAX IN THIS STATE. IF THE USES
OF THE PROPERTY MUST BE AGGREGATED TO DETERMINE WHETHER THE PROPERTY IS
PRINCIPALLY USED IN QUALIFYING USES, THEN EITHER EACH AFFILIATE USING
THE PROPERTY MUST SATISFY THIS EMPLOYMENT TEST OR THIS EMPLOYMENT TEST
MUST BE SATISFIED THROUGH THE AGGREGATION OF THE EMPLOYEES OF THE
TAXPAYER, ITS AFFILIATED REGULATED BROKER, DEALER, AND REGISTERED
INVESTMENT ADVISER USING THE PROPERTY. FOR PURPOSES OF THIS SUBDIVISION,
THE TERM "GOODS" SHALL NOT INCLUDE ELECTRICITY. FOR PURPOSES OF THIS
PARAGRAPH, MANUFACTURING SHALL MEAN THE PROCESS OF WORKING RAW MATERIALS
INTO WARES SUITABLE FOR USE OR WHICH GIVES NEW SHAPES, NEW QUALITY OR
NEW COMBINATION TO MATTER WHICH ALREADY HAS GONE THROUGH SOME ARTIFICIAL
PROCESS BY THE USE OF MACHINERY, TOOLS, APPLIANCES AND OTHER SIMILAR
EQUIPMENT. PROPERTY USED IN THE PRODUCTION OF GOODS SHALL INCLUDE
MACHINERY, EQUIPMENT OR OTHER TANGIBLE PROPERTY WHICH IS PRINCIPALLY
USED IN THE REPAIR AND SERVICE OF OTHER MACHINERY, EQUIPMENT OR OTHER
TANGIBLE PROPERTY USED PRINCIPALLY IN THE PRODUCTION OF GOODS AND SHALL
INCLUDE ALL FACILITIES USED IN THE PRODUCTION OPERATION, INCLUDING STOR-
AGE OF MATERIAL TO BE USED IN PRODUCTION AND OF THE PRODUCTS THAT ARE
PRODUCED. FOR PURPOSES OF THIS PARAGRAPH, THE TERMS "INDUSTRIAL WASTE
TREATMENT FACILITIES", "AIR POLLUTION CONTROL FACILITIES" AND "RESEARCH
AND DEVELOPMENT PROPERTY" SHALL HAVE THE MEANINGS ASCRIBED THERETO BY
CLAUSES (II) AND (III), RESPECTIVELY, OF SUBPARAGRAPH (B) OF THIS PARA-
GRAPH, AND THE PROVISIONS OF SUBPARAGRAPH (C) OF THIS PARAGRAPH SHALL
APPLY.
(3) A TAXPAYER SHALL NOT BE ALLOWED A CREDIT UNDER THIS SUBDIVISION
WITH RESPECT TO ANY TANGIBLE PERSONAL PROPERTY AND OTHER TANGIBLE PROP-
ERTY, INCLUDING BUILDINGS AND STRUCTURAL COMPONENTS OF BUILDINGS, WHICH
IT LEASES TO ANY OTHER PERSON OR CORPORATION EXCEPT WHERE A TAXPAYER
LEASES PROPERTY TO AN AFFILIATED REGULATED BROKER, DEALER, OR REGISTERED
INVESTMENT ADVISER THAT USES SUCH PROPERTY IN ACCORDANCE WITH CLAUSE
(IV) OR (V) OF SUBPARAGRAPH (D) OF PARAGRAPH TWO OF THIS SUBDIVISION.
FOR PURPOSES OF THE PRECEDING SENTENCE, ANY CONTRACT OR AGREEMENT TO
LEASE OR RENT OR FOR A LICENSE TO USE SUCH PROPERTY SHALL BE CONSIDERED
A LEASE. PROVIDED, HOWEVER, IN DETERMINING WHETHER A TAXPAYER SHALL BE
ALLOWED A CREDIT UNDER THIS SUBDIVISION WITH RESPECT TO SUCH PROPERTY,
ANY ELECTION MADE WITH RESPECT TO SUCH PROPERTY PURSUANT TO THE
PROVISIONS OF PARAGRAPH EIGHT OF SUBSECTION (F) OF SECTION ONE HUNDRED
SIXTY-EIGHT OF THE INTERNAL REVENUE CODE, AS SUCH PARAGRAPH WAS IN
EFFECT FOR AGREEMENTS ENTERED INTO PRIOR TO JANUARY FIRST, NINETEEN
HUNDRED EIGHTY-FOUR, SHALL BE DISREGARDED.
(4) IF THE AMOUNT OF CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY
TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S TAX FOR SUCH YEAR, THE EXCESS
MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND MAY BE DEDUCTED
FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS. ANY REFUND PAID PURSUANT
TO THIS PARAGRAPH SHALL BE DEEMED TO BE A REFUND OF AN OVERPAYMENT OF
TAX AS PROVIDED IN SECTION SIX HUNDRED EIGHTY-SIX OF THIS CHAPTER,
PROVIDED, HOWEVER, THAT NO INTEREST SHALL BE PAID THEREON.
(Z) DISCOVERY WAGE TAX CREDIT. (1) A TAXPAYER SHALL BE ALLOWED A CRED-
IT, TO BE COMPUTED AS HEREINAFTER PROVIDED, AGAINST THE TAX IMPOSED BY
THIS ARTICLE, WHERE THE TAXPAYER HAS BEEN CERTIFIED PURSUANT TO SECTION
THIRTY-ONE HUNDRED SIXTY-SIX OF THE PUBLIC AUTHORITIES LAW. THE AMOUNT
OF SUCH CREDIT SHALL BE AS PRESCRIBED IN PARAGRAPH FOUR OF THIS SUBDIVI-
SION.
A. 11302 17
(2) "DISCOVERY WAGES" MEANS WAGES PAID BY THE TAXPAYER FOR FULL-TIME
EMPLOYMENT DURING A TAXABLE YEAR, PROVIDED THAT THOSE WAGES ARE PAID BY
A CERTIFIED BUSINESS AS DEFINED BY THE FOUNDATION AS REQUIRED IN ITS
RESPONSIBILITIES.
(3) THE CREDIT PROVIDED IN THIS SUBDIVISION SHALL BE ALLOWED ONLY
WHERE THE AVERAGE NUMBER OF INDIVIDUALS EMPLOYED FULL-TIME BY THE
TAXPAYER IN THE STATE, DURING THE TAXABLE YEAR EXCEEDS THE AVERAGE
NUMBER OF SUCH INDIVIDUALS EMPLOYED FULL-TIME BY THE TAXPAYER IN THE
PREVIOUS TAXABLE YEAR.
(4) THE AMOUNT OF THE CREDIT SHALL EQUAL THE SUM OF THE PRODUCT OF
THREE THOUSAND DOLLARS AND THE AVERAGE NUMBER OF INDIVIDUALS EMPLOYED
FULL-TIME BY THE TAXPAYER, COMPUTED PURSUANT TO PROVISIONS OF PARAGRAPH
THREE OF THIS SUBDIVISION.
(5) IF THE AMOUNT OF THIS CREDIT AND CARRYOVERS OF SUCH CREDIT ALLOWED
UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S
TAX FOR SUCH YEAR, THE EXCESS, AS WELL AS ANY PART OF THE CREDIT OR
CARRYOVERS OF SUCH CREDIT, OR BOTH, WHICH MAY NOT BE DEDUCTED FROM THE
TAX OTHERWISE DUE BY REASON OF PARAGRAPH FOUR OF THIS SUBDIVISION, MAY
BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND MAY BE DEDUCTED FROM
THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS.
S 10. This act shall take effect immediately; provided, however, that
any rules and regulations necessary to carry out the provisions of this
act shall be promulgated by the New York state foundation for science,
technology and innovation before such effective date.
PART C
Section 1. The opening paragraph and subparagraphs (iv) and (vi) of
paragraph (a) of subdivision 1 of section 210 of the tax law, as amended
by section 2 of part N of chapter 60 of the laws of 2007, are amended to
read as follows:
For taxable years beginning before July first, nineteen hundred nine-
ty-nine, the amount prescribed by this paragraph shall be computed at
the rate of nine percent of the taxpayer's entire net income base. For
taxable years beginning after June thirtieth, nineteen hundred ninety-
nine and before July first, two thousand, the amount prescribed by this
paragraph shall be computed at the rate of eight and one-half percent of
the taxpayer's entire net income base. For taxable years beginning after
June thirtieth, two thousand and before July first, two thousand one,
the amount prescribed by this paragraph shall be computed at the rate of
eight percent of the taxpayer's entire net income base. For taxable
years beginning after June thirtieth, two thousand one and before Janu-
ary first, two thousand seven, the amount prescribed by this paragraph
shall be computed at the rate of seven and one-half percent of the
taxpayer's entire net income base. For taxable years beginning [on or]
after January first, two thousand seven AND BEFORE JANUARY FIRST, TWO
THOUSAND TEN, the amount prescribed by this paragraph shall be computed
at the rate of seven and one-tenth percent of the taxpayer's entire net
income base. FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO
THOUSAND TEN, THE AMOUNT PRESCRIBED BY THIS PARAGRAPH SHALL BE COMPUTED
AT THE RATE OF SIX AND EIGHTY-FIVE ONE HUNDREDTH PERCENT OF THE TAXPAY-
ER'S ENTIRE NET INCOME BASE. The taxpayer's entire net income base shall
mean the portion of the taxpayer's entire net income allocated within
the state as hereinafter provided, subject to any modification required
by paragraphs (d) and (e) of subdivision three of this section. However,
in the case of a small business taxpayer, as defined in paragraph (f) of
A. 11302 18
this subdivision, the amount prescribed by this paragraph shall be
computed pursuant to subparagraph (iv) of this paragraph and in the case
of a manufacturer, as defined in subparagraph (vi) of this paragraph,
the amount prescribed by this paragraph shall be computed pursuant to
subparagraph (vi) of this paragraph.
(iv) for taxable years beginning [on or] after January first, two
thousand seven AND BEFORE JANUARY FIRST, TWO THOUSAND TEN, if the entire
net income base is not more than two hundred ninety thousand dollars the
amount shall be six and one-half percent of the entire net income base;
if the entire net income base is more than two hundred ninety thousand
dollars but not over three hundred ninety thousand dollars the amount
shall be the sum of (1) eighteen thousand eight hundred fifty dollars,
(2) seven and one-tenth percent of the excess of the entire net income
base over two hundred ninety thousand dollars but not over three hundred
ninety thousand dollars and (3) four and thirty-five hundredths percent
of the excess of the entire net income base over three hundred fifty
thousand dollars but not over three hundred ninety thousand dollars. FOR
TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND TEN, IF
THE ENTIRE NET INCOME IS NOT OVER THREE HUNDRED NINETY THOUSAND DOLLARS
THE AMOUNT SHALL BE SIX PERCENT OF THE ENTIRE NET INCOME BASE;
(vi) for taxable years beginning [on or] after January thirty-first,
two thousand seven AND BEFORE JANUARY FIRST, TWO THOUSAND TEN, the
amount prescribed by this paragraph for a taxpayer which is a qualified
New York manufacturer, shall be computed at the rate of six and one-half
(6.5) percent of the taxpayer's entire net income base. FOR TAXABLE
YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND TEN, THE AMOUNT
PRESCRIBED BY THIS PARAGRAPH SHALL BE COMPUTED AT THE RATE OF SIX
PERCENT OF THE TAXPAYER'S ENTIRE NET INCOME BASE. The term "manufactur-
er" shall mean a taxpayer which during the taxable year is principally
engaged in the production of goods by manufacturing, processing, assem-
bling, refining, mining, extracting, farming, agriculture, horticulture,
floriculture, viticulture or commercial fishing. However, the generation
and distribution of electricity, the distribution of natural gas, and
the production of steam associated with the generation of electricity
shall not be qualifying activities for a manufacturer under this subpar-
agraph. Moreover, the combined group shall be considered a "manufactur-
er" for purposes of this subparagraph only if the combined group during
the taxable year is principally engaged in the activities set forth in
this paragraph, or any combination thereof. A taxpayer or a combined
group shall be "principally engaged" in activities described above if,
during the taxable year, more than fifty percent of the gross receipts
of the taxpayer or combined group, respectively, are derived from
receipts from the sale of goods produced by such activities. In comput-
ing a combined group's gross receipts, intercorporate receipts shall be
eliminated. A "qualified New York manufacturer" is a manufacturer which
has property in New York which is described in clause (A) of subpara-
graph (i) of paragraph (b) of subdivision twelve of this section and
either (I) the adjusted basis of such property for federal income tax
purposes at the close of the taxable year is at least one million
dollars or (II) all of its real and personal property is located in New
York. In addition, a "qualified New York manufacturer" means a taxpayer
which is defined as a qualified emerging technology company under para-
graph (c) of subdivision one of section thirty-one hundred two-e of the
public authorities law regardless of the ten million dollar limitation
expressed in subparagraph one of such paragraph (c).
A. 11302 19
S 2. Subdivision (a) of section 1455 of the tax law, as amended by
section 3 of part N of chapter 60 of the laws of 2007, is amended to
read as follows:
(a) Basic tax. For taxable years beginning before July first, two
thousand, nine percent of the taxpayer's entire net income, or the
portion thereof allocated to this state, for the taxable year, or part
thereof. For taxable years beginning after June thirtieth, two thousand
and before July first, two thousand one, eight and one-half percent of
the taxpayer's entire net income, or portion thereof allocated to this
state, for the taxable year, or part thereof. For taxable years begin-
ning after June thirtieth, two thousand one and before July first, two
thousand two, eight percent of the taxpayer's entire net income, or
portion thereof allocated to this state, for the taxable year, or part
thereof. For taxable years beginning after June thirtieth, two thousand
two and before January first, two thousand seven, seven and one-half
percent of the taxpayer's entire net income, or portion thereof allo-
cated to this state, for the taxable year, or part thereof. For taxable
years beginning on [or after] January first, two thousand seven, AND
BEFORE JANUARY FIRST, TWO THOUSAND TEN, seven and one-tenth percent of
the taxpayer's entire net income, or the portion thereof allocated to
this state, for the taxable year, or part thereof. FOR TAXABLE YEARS
BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND TEN, SIX AND
EIGHTY-FIVE ONE HUNDREDTH PERCENT OF THE TAXPAYER'S ENTIRE NET INCOME,
OR PORTION THEREOF ALLOCATED TO THIS STATE, FOR THE TAXABLE YEAR, OR
PART THEREOF.
S 3. Paragraph 1 of subdivision (a) of section 1502 of the tax law, as
amended by section 4 of part N of chapter 60 of the laws of 2007, is
amended to read as follows:
(1) for taxable years beginning before July first, two thousand, nine
percent of the taxpayer's entire net income, or portion thereof allo-
cated within this state, for the taxable year, or part thereof, except
that for taxable years beginning prior to January first, nineteen
hundred seventy-eight, the rate shall be four and five-tenths percent;
for taxable years beginning after June thirtieth, two thousand and
before July first, two thousand one, eight and one-half percent of the
taxpayer's entire net income, or portion thereof allocated within this
state, for the taxable year, or part thereof; for taxable years begin-
ning after June thirtieth, two thousand one and before July first, two
thousand two, eight percent of the taxpayer's entire net income, or
portion thereof allocated within this state, for the taxable year, or
part thereof; for taxable years beginning after June thirtieth, two
thousand two and before January first, two thousand seven, seven and
one-half percent of the taxpayer's entire net income, or portion thereof
allocated within this state, for the taxable year, or part thereof;
[and] for taxable years beginning [on or] after January first, two thou-
sand seven AND BEFORE JANUARY FIRST, TWO THOUSAND TEN, seven and one-
tenth percent of the taxpayer's entire net income, or portion thereof
allocated within this state, for the taxable year, or part thereof; AND
FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND TEN,
SIX AND EIGHTY-FIVE ONE HUNDREDTH PERCENT OF THE TAXPAYER'S ENTIRE NET
INCOME, OR PORTION THEREOF ALLOCATED WITHIN THIS STATE, FOR THE TAXABLE
YEAR, OR PART THEREOF; or
S 4. Subparagraph 1 of paragraph (b) of subdivision 1 of section 186-a
of the tax law, as amended by section 4 of part Y of chapter 63 of the
laws of 2000, is amended to read as follows:
A. 11302 20
(1) two and five-tenths percent on and after January first, two thou-
sand through December thirty-first, two thousand, two and forty-five one
hundredths percent from January first, two thousand one through December
thirty-first, two thousand one, two and four-tenths percent from January
first, two thousand two through December thirty-first, two thousand two,
two and twenty-five one hundredths percent from January first, two thou-
sand three through December thirty-first, two thousand three, two and
one hundred twenty-five one thousandths percent from January first, two
thousand four through December thirty-first, two thousand four [and],
two percent commencing January first, two thousand five AND ONE AND
ONE-HALF PERCENT COMMENCING JANUARY FIRST, TWO THOUSAND TEN and there-
after of that portion of its gross income derived from the transporta-
tion, transmission or distribution of gas or electricity by means of
conduits, mains, pipes, wires, lines or the like and (2) two and one-
tenth percent from January first, two thousand through December thirty-
first, two thousand, two percent from January first, two thousand one
through December thirty-first, two thousand one, one and nine-tenths
percent from January first, two thousand two through December thirty-
first, two thousand two, eighty-five one hundredths of one percent from
January first, two thousand three through December thirty-first, two
thousand three, four-tenths of one percent from January first, two thou-
sand four through December thirty-first, two thousand four and zero
percent commencing January first, two thousand five of all of its other
gross income, is hereby imposed upon every utility not taxed under para-
graph (a) of this subdivision doing business in this state which is
subject to the supervision of the state department of public service
which has a gross income for the year ending December thirty-first in
excess of five hundred dollars, except motor carriers or brokers subject
to such supervision under the public service law; and
S 5. Paragraph (a) of subdivision 2 of section 186-e of the tax law,
as amended by section 4 of part S of chapter 85 of the laws of 2002, is
amended to read as follows:
(a) There is hereby imposed an excise tax on the sale of telecommuni-
cation services by any person which is a provider of telecommunication
services, to be paid by such person, at the rate of three and one-half
percent prior to October first, nineteen hundred ninety-eight, three and
one-quarter percent from October first, nineteen hundred ninety-eight
through December thirty-first, nineteen hundred ninety-nine, [and] two
and one-half percent [on and] after January first, two thousand FIVE AND
TWO PERCENT ON AND AFTER JANUARY FIRST, TWO THOUSAND TEN of gross
receipt from: (1) any intrastate telecommunication services, except any
telecommunication services the gross receipt from which is subject to
tax under subparagraph four of this paragraph; (2) any interstate and
international telecommunication services (other than interstate and
international private telecommunication services and any telecommuni-
cation services the gross receipt from which is subject to tax under
subparagraph four of this paragraph) which originate or terminate in
this state and which telecommunication services are charged to a service
address in this state, regardless of where the amounts charged for such
services are billed or ultimately paid; (3) interstate and international
private telecommunication services, the gross receipt to which the tax
shall apply shall be determined as prescribed in subdivision three of
this section, except any telecommunication services the gross receipt
from which is subject to tax under subparagraph four of this paragraph;
and (4) mobile telecommunications service provided by a home service
A. 11302 21
provider where the mobile telecommunications customer's place of primary
use is within this state.
S 6. Subparagraph 1 of paragraph (g) of subdivision 1 of section 210
of the tax law, as amended by section 4 of part AA-1 of chapter 57 of
the laws of 2008, is amended to read as follows:
(1) General. The amount prescribed by this paragraph shall be, in the
case of each New York S corporation, (i) the higher of the amounts
prescribed in paragraphs (a) and (d) of this subdivision (other than the
amount prescribed in the final clause of subparagraph one of that para-
graph (d)) (ii) reduced by the article twenty-two tax equivalent;
provided, however, that the amount thus determined shall not be less
than the lowest of the amounts prescribed in subparagraph one of that
paragraph (d) (applying the provisions of subparagraph three of that
paragraph as necessary). Provided, however, notwithstanding any
provision of this paragraph, in taxable years beginning in two thousand
three and before two thousand eight, the amount prescribed by this para-
graph shall be the amount prescribed in subparagraph one of that para-
graph (d) (applying the provisions of subparagraph three of that para-
graph as necessary) and applying the calculation of that amount in the
case of a termination year as set forth in subparagraph four of this
paragraph as necessary. In taxable years beginning in two thousand eight
[and thereafter] AND TWO THOUSAND NINE, the amount prescribed by this
paragraph is the amount prescribed in subparagraph four of that para-
graph (d) (applying the provisions of subparagraph three of that para-
graph as necessary) and applying the calculation of that amount in the
case of a termination year as set forth in subparagraph four of this
paragraph as necessary. PROVIDED, FURTHER, AND NOTWITHSTANDING ANY
PROVISION OF THIS PARAGRAPH, IN TAXABLE YEARS BEGINNING ON AND AFTER TWO
THOUSAND TEN, THE AMOUNT PRESCRIBED BY THIS PARAGRAPH SHALL EQUAL ZERO,
BUT THE PROVISIONS OF THIS PARAGRAPH SHALL HAVE NO EFFECT ON THE AMOUNT
PRESCRIBED BY THE ARTICLE TWENTY-TWO TAX EQUIVALENT.
S 7. This act shall take effect immediately and shall apply to taxable
years beginning on or after January 1, 2010, provided, however, that any
rules and regulations necessary to carry out the provisions of this act
shall be promulgated before such effective date.
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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