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

                                  3317

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                            January 26, 2009
                               ___________

Introduced  by M. of A. MAGEE -- read once and referred to the Committee
  on Agriculture

AN ACT to amend the agriculture and markets  law,  in  relation  to  the
  powers  and  duties  of  the  commissioner  of agriculture and markets
  pertaining to the direct marketing of grapes and other fruit products,
  and the profitability of farming and the preservation of  viable  farm
  land; and to amend the tax law, in relation to corporate franchise tax
  and  personal  income tax credits for the purchase of certain vineyard
  grape plants and fruit processing capital equipment

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

  Section 1. Section 3 of the agriculture and markets law, as amended by
chapter 651 of the laws of 1946, is amended to read as follows:
  S 3. Declaration of policy and purposes.  The agricultural industry is
basic  to  the  life  of  our state. It vitally concerns and affects the
welfare, health, economic well-being and productive and industrial capa-
bilities of all our people. It is the policy and duty of  the  state  to
promote,  foster,  and  encourage the agricultural industry, with proper
standards of living for those engaged therein; to design  and  establish
long-range  programs  for its stabilization and profitable operation; to
increase through education, research, regulation, and scientific  means,
the  quantity, quality, and efficiency of its production; to improve its
marketing system; to encourage adequate and skilled assistance for agri-
cultural enterprises; to maintain at fair prices uncontrolled by  specu-
lation  the  instrumentalities  and  products  of agriculture; to remove
unnecessary or unfair costs and obstacles in the [transporation]  TRANS-
PORTATION,  storage,  processing,  distribution,  marketing, and sale of
agricultural products; to prevent frauds  in  the  traffic  therein;  to
promote an expanded demand for the state's agricultural products and the
intelligent  uses  thereof  by  consumers as pure and wholesome food; to
protect the public health and to eliminate the evils  of  under-nourish-
ment;  to  encourage  the selection and consumption of food according to
sound dietary  and  nutritional  principles;  and  to  make  our  people

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                      [ ] is old law to be omitted.
                                                           LBD05396-01-9

A. 3317                             2

conscious  of the bond of mutual self-interest between our urban and our
rural populations.
  AT  THE  DAWN  OF THE TWENTY-FIRST CENTURY, THE LEGISLATURE FINDS THAT
EVER-INCREASING ECONOMIC CHANGES AND PRESSURES ON FARMING HAVE  INTENSI-
FIED  THE DIFFICULTIES FACED BY THOSE ENGAGED IN AGRICULTURAL PRODUCTION
FOR THEIR LIVELIHOODS, MANY OF WHOM ARE THE DESCENDANTS  OF  GENERATIONS
OF  FARMERS.    THESE  POWERFUL  FORCES,  NATIONWIDE  AND  GLOBAL,  HAVE
INCREASED THE URGENCY OF THE PROBLEMS AND  THE  NEED  TO  IMPLEMENT  THE
PROVISIONS  OF THE FOREGOING PARAGRAPH OF THIS SECTION. THUS, THE LEGIS-
LATURE CONTINUES TO ENACT MEASURES DELIBERATELY INTENDED TO FULFILL  THE
GOALS OF SAID PARAGRAPH.  THE NEED HAS NEVER BEEN GREATER.
  Accordingly, all laws enacted concerning the agricultural industry and
its  allied subjects, whether included in this chapter or not, are to be
deemed an exercise of the police power of the state and a  discharge  of
its  obligations for the promotion of the general welfare through state-
wide laws and regulations, local initiative and government,  cooperative
action  between  groups  and  localities, home-rule measures, individual
enterprise, civic consciousness, and appropriate coordination  with  the
federal  government  and  as  between  educational research institutions
within the state.
  Such laws and  all  governmental  measures  adopted  pursuant  thereto
should  receive  a liberal interpretation and application in furtherance
of the aforesaid policy and purposes.
  S 2. Subdivision 1 of section 16 of the agriculture and  markets  law,
as  amended  by  chapter  639 of the laws of 2004, is amended to read as
follows:
  1. Execute and carry into effect the laws of the state and  the  rules
of  the  department,  relative to agriculture, horticulture, farm, fruit
AND FRUIT PRODUCTS, and dairy products, aquaculture, and the production,
processing, transportation, storage, marketing and distributing of food;
enforce and carry into effect the provisions of the laws  of  the  state
relative to weights and measures.
  S  3.  Subdivision 2 of section 16 of the agriculture and markets law,
such section as renumbered by chapter 16 of the laws of 1935, is amended
to read as follows:
  2. Aid in the promotion and development of the agricultural  resources
of  the  state  and the improvement of the conditions of rural life; the
improvement of the fertility and  productiveness  of  farm  AND  ORCHARD
lands  and the restoration to fertility and productiveness of unoccupied
and unproductive land; the settlement of farms and the  supply  of  farm
labor;  the  stocking of farms with meat-producing and dairy animals and
promoting the production of cereals,  fruits  and  vegetables,  AND  THE
PROCESSING  THEREOF, and co-operate with county farm bureaus[,] and with
agricultural, dairying and horticultural  associations  or  corporations
and other agencies organized for any or all of such purposes.
  S 4. Subdivision 2-b of section 16 of the agriculture and markets law,
as  amended  by  chapter  639 of the laws of 2004, is amended to read as
follows:
  2-b. Aid in the promotion, marketing,  and  sale  of  New  York  state
labelled wines, grapes [and], grape products, OTHER FRUITS AND ALL OTHER
FRUIT  PRODUCTS  in cooperation with the department of economic develop-
ment both within and outside the state  and  to  provide  promotion  and
marketing  advisement  to wineries, farm wineries, micro-wineries, grape
and other fruit growers and processors, and related trade  organizations
located within this state.

A. 3317                             3

  S  5.  Subdivisions 5, 11 and 13 of section 283 of the agriculture and
markets law, as added by chapter 834 of the laws of 1981, are amended to
read as follows:
  5.  Provide  assistance to consumer, COMMUNITY or non-profit organiza-
tions seeking to purchase or facilitate the purchase  of  farm  products
directly from producers.
  11.  Establish a statewide advisory council which shall provide infor-
mation to and advise the commissioner, as prescribed by him OR  HER,  on
policy, planning and programs.
  13.  Undertake any other activities which he OR SHE deems necessary to
accomplish the purposes of this article.
  S 6. Subdivision 9 of section 284 of the agriculture and markets  law,
as  amended  by  chapter  639 of the laws of 2004, is amended to read as
follows:
  9. Establish the Hudson valley  agricultural  center  to  serve  as  a
marketing, promotional, informational and cultural center for the Hudson
river  valley  agricultural  region  and  greenway  and  to  promote the
production of fruits [(] AND FRUIT PRODUCTS, including juices,  jellies,
[and] preserves [made therefrom)], wine, GRAPPA AND cider, vegetables[,]
and other agricultural products.
  S 7. The opening paragraph and paragraph a of subdivision 3 of section
285  of  the agriculture and markets law, as added by chapter 834 of the
laws of 1981, are amended to read as follows:
  The duties and responsibilities  of  the  statewide  advisory  council
shall  be  prescribed by the commissioner [and he], WHO may specifically
delegate to the council any or all of the following duties and responsi-
bilities:
  a. [Assisting] ASSIST the commissioner in the collection and  assembly
of  information and data necessary for the proper administration of this
article.
  S 8. Subdivision 2 of section 285-b of  the  agriculture  and  markets
law,  as  amended by chapter 571 of the laws of 2008, is amended to read
as follows:
  2. The advisory council, in consultation with the Hudson river  valley
greenway  communities council, the upstate New York tourism council, and
the downstate New York  tourism  council,  may  recommend  programs  and
promotional  activities  designed  to preserve and enhance Hudson valley
region tourism, INCREASE  THE  PROFITABILITY  OF  FARMING  and  PRESERVE
VIABLE  agricultural  open  [space] SPACES, address issues affecting the
viability of agriculture,  including  real  property  tax  policies  and
municipal land use issues AND POLICIES, and promote greater agricultural
marketing  and  promotional  opportunities for the region's agricultural
producers to the department.
  S 9. Section 210 of the tax law is amended by adding two new  subdivi-
sions 41 and 42 to read as follows:
  41.  VINEYARD  GRAPE  PLANTS  CREDIT. (A) GENERAL. A TAXPAYER SHALL BE
ALLOWED A CREDIT, TO BE COMPUTED AS HEREINAFTER  PROVIDED,  AGAINST  THE
TAX  IMPOSED BY THIS ARTICLE FOR VINEYARD GRAPE PLANTS PLACED IN SERVICE
DURING THE TAXABLE YEAR.
  (B) VINEYARD GRAPE PLANTS. THE CREDIT UNDER THIS SUBDIVISION FOR VINE-
YARD GRAPE PLANTS SHALL EQUAL SEVENTY-FIVE PERCENT OF THE  COST  OF  ANY
SUCH  PLANTS  WHICH  ARE  PLANTED  WITHIN  "LAND  USED  IN  AGRICULTURAL
PRODUCTION", AS DEFINED IN SUBDIVISION FOUR OF SECTION THREE HUNDRED ONE
OF THE AGRICULTURE AND MARKETS LAW, WHETHER OR NOT SUCH LAND  IS  WITHIN
AN AGRICULTURAL DISTRICT WITHIN THE MEANING OF ARTICLE TWENTY-FIVE-AA OF
THE AGRICULTURE AND MARKETS LAW.

A. 3317                             4

  (C) DEFINITION. THE TERM "VINEYARD GRAPE PLANTS" MEANS NEW GRAPE PLANT
MATERIAL  USED TO PLANT NEW VINEYARDS OR REPLANT PRESENTLY OR PREVIOUSLY
EXISTING OLD VINEYARDS.
  (D) CARRYOVERS. IN NO EVENT SHALL THE CREDIT UNDER THIS SUBDIVISION BE
ALLOWED  IN AN AMOUNT WHICH WILL REDUCE THE TAX PAYABLE TO LESS THAN THE
HIGHER OF THE AMOUNTS PRESCRIBED IN PARAGRAPHS (C) AND (D)  OF  SUBDIVI-
SION ONE OF THIS SECTION. PROVIDED, HOWEVER, THAT IF THE AMOUNT OF CRED-
IT ALLOWABLE UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE TAX
TO SUCH AMOUNT, ANY AMOUNT OF CREDIT NOT DEDUCTIBLE IN SUCH TAXABLE YEAR
MAY  BE  CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND MAY BE DEDUCTED
FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS.
  (E) CREDIT RECAPTURE. (I) IF, AT ANY TIME BEFORE THE END OF ITS RECOV-
ERY PERIOD, VINEYARD GRAPE PLANTS CEASE TO  BE  QUALIFIED,  A  RECAPTURE
AMOUNT MUST BE ADDED BACK IN THE YEAR IN WHICH SUCH CESSATION OCCURS.
  (II) VINEYARD GRAPE PLANTS CEASE TO BE QUALIFIED IF:
  (A) SUCH VINEYARD IS NOT ACTUALLY USED FOR CROP PRODUCTION FOR THE TEN
YEARS   NEXT   SUCCEEDING  THE  PLANTING  THEREOF;  PROVIDED  THAT  CROP
PRODUCTION SHALL NOT BE DEEMED TO REQUIRE HARVESTING; OR
  (B) THE TAXPAYER RECEIVING THE CREDIT UNDER THIS SUBDIVISION SELLS  OR
DISPOSES  OF THE PROPERTY AND KNOWS OR HAS REASON TO KNOW THAT THE PROP-
ERTY WILL BE USED IN A MANNER DESCRIBED IN CLAUSE (A) OF  THIS  SUBPARA-
GRAPH.
  (III)  RECAPTURE  AMOUNT.  THE RECAPTURE AMOUNT IS EQUAL TO THE CREDIT
ALLOWABLE UNDER THIS SUBDIVISION MULTIPLIED BY A FRACTION, THE NUMERATOR
OF WHICH IS THE TOTAL RECOVERY PERIOD FOR THE PROPERTY MINUS THE  NUMBER
OF  RECOVERY  YEARS PRIOR TO, BUT NOT INCLUDING, THE RECAPTURE YEAR, AND
THE DENOMINATOR OF WHICH IS THE TOTAL RECOVERY PERIOD.
  (F) AFFILIATES. (I) IF A CREDIT UNDER THIS SUBDIVISION IS ALLOWED TO A
TAXPAYER WITH RESPECT TO A  TAXABLE  YEAR,  THE  ACTION  TAKEN  BY  SUCH
TAXPAYER WHICH RESULTED IN SUCH CREDIT BEING ALLOWED THERETO MAY, AT THE
ELECTION  OF  THE TAXPAYER AND AN AFFILIATE THEREOF, BE ASCRIBED TO SUCH
AFFILIATE. WHERE SUCH AFFILIATE, BASED ON SUCH  ASCRIPTION,  IS  ALLOWED
SUCH  CREDIT  AND  DEDUCTS FROM THE TAX OTHERWISE DUE THE AMOUNT OF SUCH
CREDIT, SUCH CREDIT SHALL BE DEEMED IN ALL RESPECTS TO HAVE BEEN ALLOWED
TO SUCH AFFILIATE; PROVIDED THAT ANY ACTION OR INACTION BY THE  TAXPAYER
WHICH  CONSTITUTES  AN  EVENT OF RECAPTURE DESCRIBED IN PARAGRAPH (E) OF
THIS SUBDIVISION SHALL BE ASCRIBED TO THE AFFILIATE AND SHALL CONSTITUTE
AN EVENT OF RECAPTURE WITH RESPECT TO THE CREDIT ALLOWED TO  THE  AFFIL-
IATE PURSUANT TO THIS SUBDIVISION.
  (II)  NOTWITHSTANDING  ANY  OTHER PROVISION OF LAW TO THE CONTRARY, IN
THE CASE OF THE CREDIT PROVIDED FOR UNDER THIS SUBDIVISION BEING ALLOWED
TO, OR ASSERTED TO BE ALLOWED TO, AN AFFILIATE, PURSUANT TO SUBPARAGRAPH
(I) OF THIS PARAGRAPH, THE COMMISSIONER SHALL HAVE THE SAME POWERS  WITH
RESPECT  TO  EXAMINING  THE  BOOKS AND RECORDS OF THE TAXPAYER, AND HAVE
SUCH OTHER POWERS OF INVESTIGATION WITH RESPECT TO THE TAXPAYER, AS  ARE
AFFORDED  UNDER  THIS  CHAPTER  WITH  RESPECT  TO  A  TAXPAYER WHICH HAS
DEDUCTED THE CREDIT ALLOWED UNDER THIS SECTION FROM TAX  OTHERWISE  DUE,
AS  IF  IT  WERE  THE  TAXPAYER  WHICH HAD DEDUCTED SUCH CREDIT FROM TAX
OTHERWISE DUE.
  (III) THE TERM "AFFILIATE" SHALL MEAN A CORPORATION SUBSTANTIALLY  ALL
THE  CAPITAL  STOCK  OF  WHICH IS OWNED OR CONTROLLED EITHER DIRECTLY OR
INDIRECTLY BY THE TAXPAYER, OR WHICH OWNS OR CONTROLS EITHER DIRECTLY OR
INDIRECTLY SUBSTANTIALLY ALL THE  CAPITAL  STOCK  OF  THE  TAXPAYER,  OR
SUBSTANTIALLY  ALL  THE  CAPITAL  STOCK  OF WHICH IS OWNED OR CONTROLLED
EITHER DIRECTLY OR INDIRECTLY BY INTERESTS WHICH OWN OR  CONTROL  EITHER

A. 3317                             5

DIRECTLY  OR  INDIRECTLY  SUBSTANTIALLY  ALL  THE  CAPITAL  STOCK OF THE
TAXPAYER.
  42. FRUIT PROCESSING CAPITAL EQUIPMENT CREDIT. (A) GENERAL. A TAXPAYER
SHALL  BE  ALLOWED  A  CREDIT,  TO  BE COMPUTED AS HEREINAFTER PROVIDED,
AGAINST THE TAX IMPOSED BY THIS ARTICLE FOR CAPITAL  EQUIPMENT  THAT  IS
USED FOR THE PRODUCTION, MANUFACTURE OR STORAGE OF WINE, LIQUOR, ALCOHOL
OR  SPIRITS THAT PRIMARILY UTILIZES AGRICULTURAL PRODUCTS THAT ARE GROWN
OR PRODUCED IN THE STATE THAT IS PLACED IN SERVICE  DURING  THE  TAXABLE
YEAR.
  (B)  CAPITAL  EQUIPMENT FOR THE PRODUCTION, MANUFACTURE, OR STORAGE OF
WINE, LIQUOR, ALCOHOL OR SPIRITS.  THE CREDIT UNDER THIS SUBDIVISION FOR
SUCH CAPITAL EQUIPMENT SHALL EQUAL FIFTY PERCENT OF THE COST OF ANY SUCH
EQUIPMENT WHICH IS USED IN THIS  STATE  BY  A  TAXPAYER  LICENSED  UNDER
SECTION SIXTY OR SEVENTY-FIVE OF THE ALCOHOLIC BEVERAGE CONTROL LAW THAT
IS  USED  FOR  THE  PRODUCTION, MANUFACTURE, OR STORAGE OF WINE, LIQUOR,
ALCOHOL OR SPIRITS THAT PRIMARILY UTILIZES  AGRICULTURAL  PRODUCTS  THAT
ARE GROWN OR PRODUCED IN THE STATE.
  (C)  DEFINITION.  THE TERM "CAPITAL EQUIPMENT" MEANS, FOR THE PURPOSES
OF THIS SUBDIVISION, MACHINERY, TOOLS, PRESSES, PUMPS, COOPERAGE,  OTHER
STORAGE  TANKS,  APPLIANCES  AND  OTHER  SIMILAR  EQUIPMENT USED FOR THE
PRODUCTION, MANUFACTURE, OR STORAGE OF WINE, LIQUOR, ALCOHOL OR SPIRITS.
  (D) CARRYOVERS. IN NO EVENT SHALL THE CREDIT UNDER THIS SUBDIVISION BE
ALLOWED IN AN AMOUNT WHICH WILL REDUCE THE TAX PAYABLE TO LESS THAN  THE
HIGHER  OF  THE AMOUNTS PRESCRIBED IN PARAGRAPHS (C) AND (D) OF SUBDIVI-
SION ONE OF THIS SECTION. PROVIDED, HOWEVER, THAT IF THE AMOUNT OF CRED-
IT ALLOWABLE UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE TAX
TO SUCH AMOUNT, ANY AMOUNT OF CREDIT NOT DEDUCTIBLE IN SUCH TAXABLE YEAR
MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND MAY  BE  DEDUCTED
FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS.
  (E) CREDIT RECAPTURE. (I) IF, AT ANY TIME BEFORE THE END OF ITS RECOV-
ERY  PERIOD,  SUCH CAPITAL EQUIPMENT CEASES TO BE QUALIFIED, A RECAPTURE
AMOUNT MUST BE ADDED BACK IN THE YEAR IN WHICH SUCH CESSATION OCCURS.
  (II) SUCH CAPITAL EQUIPMENT CEASES TO BE QUALIFIED IF:
  (A) SUCH EQUIPMENT  IS  NOT  ACTUALLY  USED  IN  THIS  STATE  FOR  THE
PRODUCTION,  MANUFACTURE  OR STORAGE OF WINE, LIQUOR, ALCOHOL OR SPIRITS
THAT PRIMARILY UTILIZES AGRICULTURAL PRODUCTS THAT ARE GROWN OR PRODUCED
IN THE STATE BY A TAXPAYER LICENSED UNDER SECTION SIXTY OR  SEVENTY-FIVE
OF  THE ALCOHOLIC BEVERAGE CONTROL LAW FOR THE TEN YEARS NEXT SUCCEEDING
THE PLACEMENT OF SUCH EQUIPMENT IN SERVICE; UNLESS SUCH EQUIPMENT HAS  A
PERIOD OF PROBABLE USEFULNESS THAT IS LESS THAN TEN YEARS, IN WHICH CASE
SUCH PERIOD OF PROBABLE USEFULNESS SHALL BE THE RECOVERY PERIOD; OR
  (B)  THE TAXPAYER RECEIVING THE CREDIT UNDER THIS SUBDIVISION SELLS OR
DISPOSES OF THE EQUIPMENT AND KNOWS OR  HAS  REASON  TO  KNOW  THAT  THE
EQUIPMENT  WILL  BE  USED  IN  A  MANNER DESCRIBED IN CLAUSE (A) OF THIS
SUBPARAGRAPH.
  (III) RECAPTURE AMOUNT. THE RECAPTURE AMOUNT IS EQUAL  TO  THE  CREDIT
ALLOWABLE UNDER THIS SUBDIVISION MULTIPLIED BY A FRACTION, THE NUMERATOR
OF  WHICH IS THE TOTAL RECOVERY PERIOD FOR THE PROPERTY MINUS THE NUMBER
OF RECOVERY YEARS PRIOR TO, BUT NOT INCLUDING, THE RECAPTURE  YEAR,  AND
THE DENOMINATOR OF WHICH IS THE TOTAL RECOVERY PERIOD.
  (F) AFFILIATES. (I) IF A CREDIT UNDER THIS SUBDIVISION IS ALLOWED TO A
TAXPAYER  WITH  RESPECT  TO  A  TAXABLE  YEAR,  THE ACTION TAKEN BY SUCH
TAXPAYER WHICH RESULTED IN SUCH CREDIT BEING ALLOWED THERETO MAY, AT THE
ELECTION OF THE TAXPAYER AND AN AFFILIATE THEREOF, BE ASCRIBED  TO  SUCH
AFFILIATE.  WHERE  SUCH  AFFILIATE, BASED ON SUCH ASCRIPTION, IS ALLOWED
SUCH CREDIT AND DEDUCTS FROM THE TAX OTHERWISE DUE THE  AMOUNT  OF  SUCH

A. 3317                             6

CREDIT, SUCH CREDIT SHALL BE DEEMED IN ALL RESPECTS TO HAVE BEEN ALLOWED
TO  SUCH AFFILIATE; PROVIDED THAT ANY ACTION OR INACTION BY THE TAXPAYER
WHICH CONSTITUTES AN EVENT OF RECAPTURE DESCRIBED IN  PARAGRAPH  (E)  OF
THIS SUBDIVISION SHALL BE ASCRIBED TO THE AFFILIATE AND SHALL CONSTITUTE
AN  EVENT  OF RECAPTURE WITH RESPECT TO THE CREDIT ALLOWED TO THE AFFIL-
IATE PURSUANT TO THIS SUBDIVISION.
  (II) NOTWITHSTANDING ANY OTHER PROVISION OF LAW TO  THE  CONTRARY,  IN
THE CASE OF THE CREDIT PROVIDED FOR UNDER THIS SUBDIVISION BEING ALLOWED
TO, OR ASSERTED TO BE ALLOWED TO, AN AFFILIATE, PURSUANT TO SUBPARAGRAPH
(I)  OF THIS PARAGRAPH, THE COMMISSIONER SHALL HAVE THE SAME POWERS WITH
RESPECT TO EXAMINING THE BOOKS AND RECORDS OF  THE  TAXPAYER,  AND  HAVE
SUCH  OTHER POWERS OF INVESTIGATION WITH RESPECT TO THE TAXPAYER, AS ARE
AFFORDED UNDER THIS  CHAPTER  WITH  RESPECT  TO  A  TAXPAYER  WHICH  HAS
DEDUCTED  THE  CREDIT ALLOWED UNDER THIS SECTION FROM TAX OTHERWISE DUE,
AS IF IT WERE THE TAXPAYER WHICH  HAD  DEDUCTED  SUCH  CREDIT  FROM  TAX
OTHERWISE DUE.
  (III)  THE TERM "AFFILIATE" SHALL MEAN A CORPORATION SUBSTANTIALLY ALL
THE CAPITAL STOCK OF WHICH IS OWNED OR  CONTROLLED  EITHER  DIRECTLY  OR
INDIRECTLY BY THE TAXPAYER, OR WHICH OWNS OR CONTROLS EITHER DIRECTLY OR
INDIRECTLY  SUBSTANTIALLY  ALL  THE  CAPITAL  STOCK  OF THE TAXPAYER, OR
SUBSTANTIALLY ALL THE CAPITAL STOCK OF  WHICH  IS  OWNED  OR  CONTROLLED
EITHER  DIRECTLY  OR INDIRECTLY BY INTERESTS WHICH OWN OR CONTROL EITHER
DIRECTLY OR INDIRECTLY  SUBSTANTIALLY  ALL  THE  CAPITAL  STOCK  OF  THE
TAXPAYER.
  S  10.  Section  606  of  the  tax  law  is  amended by adding two new
subsections (qq) and (rr) to read as follows:
  (QQ) VINEYARD GRAPE PLANTS CREDIT. (1) GENERAL. A  TAXPAYER  SHALL  BE
ALLOWED  A  CREDIT,  TO BE COMPUTED AS HEREINAFTER PROVIDED, AGAINST THE
TAX IMPOSED BY THIS ARTICLE FOR VINEYARD GRAPE PLANTS PLACED IN  SERVICE
DURING THE TAXABLE YEAR.
  (2)  VINEYARD GRAPE PLANTS. THE CREDIT UNDER THIS SUBSECTION FOR VINE-
YARD GRAPE PLANTS SHALL EQUAL SEVENTY-FIVE PERCENT OF THE  COST  OF  ANY
SUCH  PLANTS  WHICH  ARE  PLANTED  WITHIN  "LAND  USED  IN  AGRICULTURAL
PRODUCTION", AS DEFINED IN SUBDIVISION FOUR OF SECTION THREE HUNDRED ONE
OF THE AGRICULTURE AND MARKETS LAW, WHETHER OR NOT SUCH LAND  IS  WITHIN
AN AGRICULTURAL DISTRICT WITHIN THE MEANING OF ARTICLE TWENTY-FIVE-AA OF
THE AGRICULTURE AND MARKETS LAW.
  (3) DEFINITION. THE TERM "VINEYARD GRAPE PLANTS" MEANS NEW GRAPE PLANT
MATERIAL  USED TO PLANT NEW VINEYARDS OR REPLANT PRESENTLY OR PREVIOUSLY
EXISTING OLD VINEYARDS.
  (4)  CARRYOVERS.  IF  THE  AMOUNT  OF  CREDIT  ALLOWABLE  UNDER   THIS
SUBSECTION 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.
  (5) CREDIT RECAPTURE. (A) IF, AT ANY TIME BEFORE THE END OF ITS RECOV-
ERY PERIOD, VINEYARD GRAPE PLANTS CEASE TO  BE  QUALIFIED,  A  RECAPTURE
AMOUNT MUST BE ADDED BACK IN THE YEAR IN WHICH SUCH CESSATION OCCURS.
  (B) VINEYARD GRAPE PLANTS CEASE TO BE QUALIFIED IF:
  (I) SUCH VINEYARD IS NOT ACTUALLY USED FOR CROP PRODUCTION FOR THE TEN
YEARS   NEXT   SUCCEEDING  THE  PLANTING  THEREOF;  PROVIDED  THAT  CROP
PRODUCTION SHALL NOT BE DEEMED TO REQUIRE HARVESTING; OR
  (II) THE TAXPAYER RECEIVING THE CREDIT UNDER THIS SUBSECTION SELLS  OR
DISPOSES  OF THE PROPERTY AND KNOWS OR HAS REASON TO KNOW THAT THE PROP-
ERTY WILL BE USED IN A MANNER DESCRIBED IN CLAUSE (I) OF  THIS  SUBPARA-
GRAPH.

A. 3317                             7

  (III)  RECAPTURE  AMOUNT.  THE RECAPTURE AMOUNT IS EQUAL TO THE CREDIT
ALLOWABLE UNDER THIS SUBSECTION MULTIPLIED BY A FRACTION, THE  NUMERATOR
OF  WHICH IS THE TOTAL RECOVERY PERIOD FOR THE PROPERTY MINUS THE NUMBER
OF RECOVERY YEARS PRIOR TO, BUT NOT INCLUDING, THE RECAPTURE  YEAR,  AND
THE DENOMINATOR OF WHICH IS THE TOTAL RECOVERY PERIOD.
  (RR) FRUIT PROCESSING CAPITAL EQUIPMENT CREDIT. (1) GENERAL. A TAXPAY-
ER  SHALL  BE  ALLOWED A CREDIT, TO BE COMPUTED AS HEREINAFTER PROVIDED,
AGAINST THE TAX IMPOSED BY THIS ARTICLE FOR CAPITAL  EQUIPMENT  THAT  IS
USED FOR THE PRODUCTION, MANUFACTURE OR STORAGE OF WINE, LIQUOR, ALCOHOL
OR  SPIRITS  THAT PRIMARILY UTILIZE AGRICULTURAL PRODUCTS THAT ARE GROWN
OR PRODUCED IN THE STATE THAT IS PLACED IN SERVICE  DURING  THE  TAXABLE
YEAR.
  (2)  CAPITAL  EQUIPMENT  FOR THE PRODUCTION, MANUFACTURE OR STORAGE OF
WINE, LIQUOR, ALCOHOL OR SPIRITS.  THE CREDIT UNDER THIS SUBSECTION  FOR
SUCH CAPITAL EQUIPMENT SHALL EQUAL FIFTY PERCENT OF THE COST OF ANY SUCH
EQUIPMENT  WHICH  IS  USED  IN  THIS  STATE BY A TAXPAYER LICENSED UNDER
SECTION SIXTY OR SEVENTY-FIVE OF THE ALCOHOLIC BEVERAGE CONTROL LAW THAT
IS USED FOR THE PRODUCTION, MANUFACTURE, OR  STORAGE  OF  WINE,  LIQUOR,
ALCOHOL  OR  SPIRITS  THAT PRIMARILY UTILIZES AGRICULTURAL PRODUCTS THAT
ARE GROWN OR PRODUCED IN THE STATE.
  (3) DEFINITION. THE TERM "CAPITAL EQUIPMENT" MEANS, FOR  THE  PURPOSES
OF  THIS  SUBSECTION, MACHINERY, TOOLS, PRESSES, PUMPS, COOPERAGE, OTHER
STORAGE TANKS, APPLIANCES AND  OTHER  SIMILAR  EQUIPMENT  USED  FOR  THE
PRODUCTION, MANUFACTURE, OR STORAGE OF WINE, LIQUOR, ALCOHOL OR SPIRITS.
  (4)   CARRYOVERS.  IF  THE  AMOUNT  OF  CREDIT  ALLOWABLE  UNDER  THIS
SUBSECTION 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.
  (5) CREDIT RECAPTURE. (I) IF, AT ANY TIME BEFORE THE END OF ITS RECOV-
ERY  PERIOD,  SUCH CAPITAL EQUIPMENT CEASES TO BE QUALIFIED, A RECAPTURE
AMOUNT MUST BE ADDED BACK IN THE YEAR IN WHICH SUCH CESSATION OCCURS.
  (II) SUCH CAPITAL EQUIPMENT CEASES TO BE QUALIFIED IF:
  (A) SUCH EQUIPMENT  IS  NOT  ACTUALLY  USED  IN  THIS  STATE  FOR  THE
PRODUCTION,  MANUFACTURE  OR STORAGE OF WINE, LIQUOR, ALCOHOL OR SPIRITS
THAT PRIMARILY UTILIZES AGRICULTURAL PRODUCTS THAT ARE GROWN OR PRODUCED
IN THE STATE BY A TAXPAYER LICENSED UNDER SECTION SIXTY OR  SEVENTY-FIVE
OF  THE ALCOHOLIC BEVERAGE CONTROL LAW FOR THE TEN YEARS NEXT SUCCEEDING
THE PLACEMENT OF SUCH EQUIPMENT IN SERVICE; UNLESS SUCH EQUIPMENT HAS  A
PERIOD OF PROBABLE USEFULNESS THAT IS LESS THAN TEN YEARS, IN WHICH CASE
SUCH PERIOD OF PROBABLE USEFULNESS SHALL BE THE RECOVERY PERIOD; OR
  (B)  THE  TAXPAYER RECEIVING THE CREDIT UNDER THIS SUBSECTION SELLS OR
DISPOSES OF THE EQUIPMENT AND KNOWS OR  HAS  REASON  TO  KNOW  THAT  THE
EQUIPMENT  WILL  BE  USED  IN  A  MANNER DESCRIBED IN CLAUSE (A) OF THIS
SUBPARAGRAPH.
  (III) RECAPTURE AMOUNT. THE RECAPTURE AMOUNT IS EQUAL  TO  THE  CREDIT
ALLOWABLE  UNDER THIS SUBSECTION MULTIPLIED BY A FRACTION, THE NUMERATOR
OF WHICH IS THE TOTAL RECOVERY PERIOD FOR THE PROPERTY MINUS THE  NUMBER
OF  RECOVERY  YEARS PRIOR TO, BUT NOT INCLUDING, THE RECAPTURE YEAR, AND
THE DENOMINATOR OF WHICH IS THE TOTAL RECOVERY PERIOD.
  S 11. The commissioner of  taxation  and  finance  is  authorized  and
directed  to promulgate any rules and regulations necessary to implement
the provisions of this act.
  S 12. This act shall take effect immediately; provided, however,  that
section  eight of this act shall take effect on the same date and in the
same manner as chapter 571  of  the  laws  of  2008  takes  effect;  and
provided, further, that sections nine and ten of this act shall apply to

A. 3317                             8

taxable  years commencing on or after January first of the year in which
it shall have become a law.