S T A T E   O F   N E W   Y O R K
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                                  6995

                            I N  S E N A T E

                              March 4, 2010
                               ___________

Introduced  by  Sen. VALESKY -- read twice and ordered printed, and when
  printed to be committed to the Committee on Commerce, Economic  Devel-
  opment and Small Business

AN  ACT  to  amend  the economic development law, in relation to the New
  York state innovation investment act; and to amend  the  tax  law,  in
  relation to certain credits for eligible high-tech enterprises

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

  Section 1. Short title. This act shall be known and may  be  cited  as
the "New York state innovation investment act".
  S  2.  Statement of legislative findings and declaration. It is hereby
found and declared that the development of a high-tech  industrial  base
of  businesses centered on the innovation, invention, and manufacture of
high-tech devices  and  components  will  contribute  favorably  to  the
state's  economic sustenance and development. It is the public policy of
the state to offer special incentives and assistance that  will  promote
the  development  of new high-tech businesses, the expansion of existing
high-tech businesses and to do so without encouraging the relocation  of
business investment from other areas of the state.
  S  3.  The economic development law is amended by adding a new article
17 to read as follows:
                                ARTICLE 17
                NEW YORK STATE INNOVATION INVESTMENT ACT
SECTION 350. DEFINITIONS.
        351. INNOVATION TECHNOLOGY INVESTMENT PROGRAM.
        352. RESPONSIBILITIES OF THE COMMISSIONER.
  S 350. DEFINITIONS. AS USED IN THIS ARTICLE, THE FOLLOWING  WORDS  AND
TERMS  SHALL  HAVE THE FOLLOWING MEANINGS UNLESS THE CONTEXT SHALL INDI-
CATE ANOTHER OR DIFFERENT MEANING OR INTENT:
  (A) "APPLICANT" SHALL MEAN THE HIGH-TECH ENTERPRISE  SEEKING  APPROVAL
AS  AN ELIGIBLE HIGH-TECH ENTERPRISE TO RECEIVE THE BENEFITS PURSUANT TO
THIS ARTICLE.
  (B) "COMMISSIONER" SHALL MEAN THE COMMISSIONER  OF  ECONOMIC  DEVELOP-
MENT.

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

                                                           LBD14408-04-0

S. 6995                             2

  (C)  "HIGH-TECH  ENTERPRISE" SHALL MEAN AN ENTERPRISE WHICH IS ENGAGED
IN THE DEVELOPMENT OR MANUFACTURING OF COMPUTER CHIPS OR NANOELECTRONICS
OR PHOTOVOLTAICS.
  (D)  "ELIGIBLE HIGH-TECH ENTERPRISE" SHALL MEAN A HIGH-TECH ENTERPRISE
WHICH IS APPROVED BY THE COMMISSIONER PURSUANT TO THE PROVISIONS OF THIS
ARTICLE AND WHICH INVESTS IN TANGIBLE PERSONAL PROPERTY AND OTHER TANGI-
BLE PROPERTY, INCLUDING BUILDINGS AND STRUCTURAL COMPONENTS OF BUILDINGS
AND CAPITAL EQUIPMENT, DESCRIBED IN SUBPARAGRAPHS (I), (II), (III),  AND
CLAUSE  (A)  OR  (C) OF SUBPARAGRAPH (V) OF PARAGRAPH (B) OF SUBDIVISION
TWELVE-B OF SECTION TWO HUNDRED TEN OF THE TAX LAW, OR AS  DESCRIBED  IN
SUBPARAGRAPHS (A), (B), (C), AND CLAUSE (I) OR (III) OF SUBPARAGRAPH (E)
OF PARAGRAPH TWO OF SUBSECTION (J) OF SECTION SIX HUNDRED SIX OF THE TAX
LAW,  THE  BASIS  OF WHICH FOR FEDERAL INCOME TAX PURPOSES WILL EQUAL OR
EXCEED TEN MILLION DOLLARS.
  (E) "EFFECTIVE DATE" SHALL MEAN THE DATE WHICH IS  THE  LATER  OF  THE
DATE OF THE APPLICATION TO THE COMMISSIONER BY THE HIGH-TECH ENTERPRISE,
OR  THE  DATE  BY  WHICH  THE HIGH-TECH ENTERPRISE HAS PLACED IN SERVICE
TANGIBLE PERSONAL PROPERTY AND OTHER TANGIBLE PROPERTY AS SET  FORTH  IN
SUBDIVISION  (D)  OF THIS SECTION, THE BASIS OF WHICH FOR FEDERAL INCOME
TAX PURPOSES WILL EQUAL OR EXCEED TEN MILLION DOLLARS.
  S 351. INNOVATION TECHNOLOGY INVESTMENT PROGRAM. (A) THERE  IS  HEREBY
CREATED IN THE DEPARTMENT AN INNOVATION TECHNOLOGY INVESTMENT PROGRAM TO
CREATE  ECONOMIC INCENTIVES FOR THE DEVELOPMENT OF HIGH-TECH ENTERPRISES
INCLUDING THOSE ENTERPRISES WHICH ARE  ENGAGED  IN  THE  DEVELOPMENT  OR
MANUFACTURING  OF  COMPUTER  CHIPS,  NANOELECTRONICS OR PHOTOVOLTAICS. A
BUSINESS WHICH IS DESIGNATED BY THE COMMISSIONER AS A  HIGH-TECH  ENTER-
PRISE  PURSUANT  TO  THIS  ARTICLE  AND WHICH PLACES IN SERVICE TANGIBLE
PERSONAL PROPERTY INCLUDING BUILDINGS AND CAPITAL EQUIPMENT  WITH  BASIS
IN AN AMOUNT EQUAL TO OR EXCEEDING TEN MILLION DOLLARS SHALL BE ELIGIBLE
FOR  SPECIFIED  TAX  BENEFITS  RELATING  TO  REAL  PROPERTY  TAXES,  TAX
REDUCTION CREDITS, INVESTMENT CREDITS, EMPLOYMENT INCENTIVE CREDITS  AND
WAGE TAX CREDITS AS SET FORTH IN THE TAX LAW.
  (B) DEFINITIONS. (1) THE TERM "BUSINESS TAX BENEFIT PERIOD" SHALL MEAN
THE  TEN TAXABLE YEARS STARTING WITH THE TAXABLE YEAR IN WHICH THE BUSI-
NESS ENTERPRISE'S BENEFIT PERIOD COMMENCEMENT DATE OCCURS, BUT ONLY WITH
RESPECT TO EACH OF SUCH BUSINESS TAX BENEFIT PERIOD YEARS FOR WHICH  THE
EMPLOYMENT TEST IS MET.
  (2)  THE  TERM  "BENEFIT PERIOD COMMENCEMENT DATE" SHALL MEAN THE DATE
WHEN PROPERTY CONSTITUTING THE PROJECT IS FIRST PLACED IN SERVICE.
  (3) THE TERM "LOCATIONS OF ITS OPERATIONS IDENTIFIED  TO  THE  COMMIS-
SIONER  IN ITS APPLICATION TO BE TREATED AS AN ELIGIBLE HIGH-TECH ENTER-
PRISE" SHALL MEAN THE LOCATION OR LOCATIONS THAT  THE  HIGH-TECH  ENTER-
PRISE IDENTIFIED TO THE COMMISSIONER IN ITS APPLICATION TO BE TREATED AS
AN  ELIGIBLE  HIGH-TECH  ENTERPRISE UNDER SECTION THREE HUNDRED FIFTY OF
THIS ARTICLE.
  (C) FOR THE PURPOSE OF DETERMINING ELIGIBILITY  FOR  CERTAIN  BENEFITS
UNDER THIS ARTICLE AND THE CORRESPONDING TAX LAW PROVISIONS, THE FOLLOW-
ING  PROVISIONS AND DEFINITIONS SHALL APPLY AND SHALL BE UTILIZED BY THE
COMMISSIONER OF TAXATION AND FINANCE TO DETERMINE SUCH ELIGIBILITY:
  (1) THE EMPLOYMENT TEST SHALL BE MET WITH RESPECT TO A TAXABLE YEAR IF
THE BUSINESS ENTERPRISE'S EMPLOYMENT NUMBER AT LOCATIONS  OF  ITS  OPER-
ATIONS  IDENTIFIED  TO THE COMMISSIONER IN ITS APPLICATION TO BE TREATED
AS AN ELIGIBLE HIGH-TECH ENTERPRISE FOR  SUCH  TAXABLE  YEAR  EQUALS  OR
EXCEEDS ITS EMPLOYMENT NUMBER IN SUCH LOCATIONS FOR THE BASE PERIOD.
  (2)  THE  TERM  "BASE PERIOD" MEANS THE FIVE TAXABLE YEARS IMMEDIATELY
PRECEDING THE TEST YEAR.   IF THE HIGH-TECH ENTERPRISE  HAS  FEWER  THAN

S. 6995                             3

FIVE  SUCH  YEARS, THEN THE TERM "BASE PERIOD" MEANS SUCH SMALLER SET OF
YEARS.
  (3)  THE TERM "TEST YEAR" MEANS THE LAST TAXABLE YEAR OF THE HIGH-TECH
ENTERPRISE ENDING BEFORE THE TEST DATE. IF A HIGH-TECH  ENTERPRISE  DOES
NOT  HAVE  A  TAXABLE  YEAR  THAT  ENDS ON OR BEFORE THE TEST DATE, SUCH
ENTERPRISE SHALL BE DEEMED TO HAVE A TEST YEAR WHICH SHALL BE EITHER THE
LAST CALENDAR YEAR ENDING ON OR BEFORE ITS TEST DATE, OR IF SUCH  ENTER-
PRISE  HAS  AS ITS TAXABLE YEAR A FISCAL YEAR, THE LAST SUCH FISCAL YEAR
ENDING ON OR BEFORE ITS TEST DATE, WHETHER OR  NOT  SUCH  ENTERPRISE  IN
FACT HAD A TAXABLE YEAR DURING THAT PERIOD.
  (4)  THE TERM "TEST DATE" MEANS THE DATE ON WHICH THE HIGH-TECH ENTER-
PRISE FILED ITS SUBMISSION AS AN ELIGIBLE HIGH-TECH  ENTERPRISE  TO  THE
COMMISSIONER.
  (5)  THE  TERM  "TAXABLE YEAR" MEANS THE TAXABLE YEAR OF THE HIGH-TECH
ENTERPRISE  UNDER  SECTION  ONE  HUNDRED   EIGHTY-THREE,   ONE   HUNDRED
EIGHTY-FOUR,  ONE  HUNDRED  EIGHTY-FIVE  OR  FORMER  SECTION ONE HUNDRED
EIGHTY-SIX OF ARTICLE NINE, OR UNDER ARTICLE NINE-A OR TWENTY-TWO OF THE
TAX LAW.
  (6) THE TERM "NET NEW EMPLOYEES" SHALL MEAN THE EXCESS OF THE  EMPLOY-
MENT NUMBER OF THE ELIGIBLE HIGH-TECH ENTERPRISE FOR THE TAXABLE YEAR AT
THE  LOCATIONS  OF  ITS OPERATIONS IDENTIFIED TO THE COMMISSIONER IN ITS
APPLICATION TO BE TREATED AS AN ELIGIBLE HIGH-TECH ENTERPRISE, OVER  THE
EMPLOYMENT NUMBER OF THE ELIGIBLE HIGH-TECH ENTERPRISE AT SUCH LOCATIONS
FOR THE BASE PERIOD.
  (7)  THE  TERM  "EMPLOYMENT  NUMBER"  SHALL MEAN THE AVERAGE NUMBER OF
INDIVIDUALS, EXCLUDING GENERAL EXECUTIVE OFFICERS  (IN  THE  CASE  OF  A
CORPORATION)  EMPLOYED FULL-TIME BY THE ENTERPRISE FOR AT LEAST ONE-HALF
OF THE TAXABLE YEAR. SUCH NUMBER SHALL BE COMPUTED  BY  DETERMINING  THE
NUMBER  OF SUCH INDIVIDUALS EMPLOYED BY THE TAXPAYER ON THE THIRTY-FIRST
DAY OF MARCH, THE THIRTIETH DAY OF JUNE, THE THIRTIETH DAY OF  SEPTEMBER
AND THE THIRTY-FIRST DAY OF DECEMBER DURING THE APPLICABLE TAXABLE YEAR,
ADDING  TOGETHER  THE  NUMBER  OF  SUCH  INDIVIDUALS DETERMINED TO BE SO
EMPLOYED ON EACH OF SUCH DATES AND DIVIDING THE SUM SO OBTAINED  BY  THE
NUMBER OF SUCH DATES OCCURRING WITHIN SUCH APPLICABLE TAXABLE YEAR. SUCH
NUMBER  SHALL  NOT  INCLUDE INDIVIDUALS EMPLOYED WITHIN THE STATE WITHIN
THE IMMEDIATELY PRECEDING SIXTY MONTHS BY A RELATED PERSON TO THE ELIGI-
BLE HIGH-TECH ENTERPRISE, AS SUCH TERM "RELATED PERSON"  IS  DEFINED  IN
SUBPARAGRAPH  (C)  OF  PARAGRAPH THREE OF SUBSECTION (B) OF SECTION FOUR
HUNDRED SIXTY-FIVE OF  THE  FEDERAL  INTERNAL  REVENUE  CODE.  FOR  THIS
PURPOSE,  A  "RELATED  PERSON"  SHALL INCLUDE AN ENTITY WHICH WOULD HAVE
QUALIFIED AS A "RELATED PERSON" TO THE ELIGIBLE HIGH-TECH ENTERPRISE  IF
IT  HAD  NOT  BEEN  DISSOLVED, LIQUIDATED, MERGED WITH ANOTHER ENTITY OR
OTHERWISE CEASED TO EXIST OR OPERATE.
  (D) CESSATION OF STATUS. A HIGH-TECH ENTERPRISE SHALL CEASE TO  BE  AN
ELIGIBLE HIGH-TECH ENTERPRISE ONLY IF IT CEASES TO MEET THE REQUIREMENTS
FOR  SUCH TREATMENT UNDER SUBDIVISION (D) OF SECTION THREE HUNDRED FIFTY
OF THIS ARTICLE. SUCH CESSATION OF STATUS SHALL BE EFFECTIVE AS  OF  THE
DATE  ON  WHICH  THE  ELIGIBLE  HIGH-TECH  ENTERPRISE FAILS TO MEET SUCH
REQUIREMENTS.
  S 352. RESPONSIBILITIES OF THE COMMISSIONER.  THE  COMMISSIONER  SHALL
PROMULGATE REGULATIONS:
  (A)  REGARDING  THE PROCESS FOR HIGH-TECH ENTERPRISES TO BE DESIGNATED
AS ELIGIBLE HIGH-TECH ENTERPRISES FOR PURPOSES  OF  THIS  ARTICLE.  SUCH
REGULATIONS SHALL NOT IMPOSE ANY ADDITIONAL CONSIDERATIONS FOR TREATMENT
AS  AN  ELIGIBLE HIGH-TECH ENTERPRISE OTHER THAN REQUIRING THE APPLICANT
TO SUBMIT DOCUMENTATION THAT IT WILL SATISFY THE CONDITIONS SET FORTH IN

S. 6995                             4

SUBDIVISION (D) OF SECTION THREE HUNDRED FIFTY OF THIS ARTICLE AND SHALL
REQUIRE THE APPLICANT TO IDENTIFY THE LOCATION OR LOCATIONS THAT WILL BE
THE SITUS OF THE INVESTMENT UNDER SUCH SUBDIVISION;
  (B)  IN  CONSULTATION WITH THE COMMISSIONER OF THE STATE DEPARTMENT OF
TAXATION AND FINANCE, GOVERNING THE PROCEDURE AND  NECESSARY  FORMS  FOR
TAXPAYERS  ENTITLED TO THE TAX CREDITS AS ELIGIBLE HIGH-TECH ENTERPRISES
TO RECEIVE SUCH CREDITS; AND
  (C) IN CONSULTATION WITH THE COMMISSIONER OF LABOR, FOR PROGRAM EVALU-
ATION AND COORDINATE IMPLEMENTATION OF AN EVALUATION  SYSTEM,  WHICH  IS
CAPABLE  OF  COMPILING AND ANALYZING ACCURATE AND CONSISTENT INFORMATION
NECESSARY FOR AN ASSESSMENT OF WHETHER STATUTORY OBJECTIVES AND CRITERIA
ARE BEING MET; AND
  THE FAILURE OF THE COMMISSIONER TO PROMULGATE THE REGULATIONS REQUIRED
IN THIS SECTION SHALL NOT PREVENT A TAXPAYER QUALIFIED  AS  AN  ELIGIBLE
HIGH-TECH  ENTERPRISE  FROM CLAIMING AND RECEIVING THE TAX CREDITS WHICH
IT IS ENTITLED TO UNDER THE RELEVANT PROVISIONS OF THE TAX LAW.
  S 4. The tax law is amended by adding four new sections 33, 34, 35 and
36 to read as follows:
  S 33. INNOVATION TECHNOLOGY CREDIT  FOR  REAL  PROPERTY  TAXES.    (A)
ALLOWANCE  OF  CREDIT.  A TAXPAYER WHICH IS AN ELIGIBLE HIGH-TECH ENTER-
PRISE, AS DEFINED IN SUBDIVISION (D) OF SECTION THREE HUNDRED  FIFTY  OF
THE ECONOMIC DEVELOPMENT LAW, OR WHICH IS A SOLE PROPRIETOR OF AN ELIGI-
BLE HIGH-TECH ENTERPRISE OR A MEMBER OF A PARTNERSHIP WHICH IS AN ELIGI-
BLE  HIGH-TECH  ENTERPRISE,  AND  WHICH  IS SUBJECT TO TAX UNDER ARTICLE
NINE-A OR TWENTY-TWO OF THIS CHAPTER, SHALL BE ALLOWED A CREDIT  AGAINST
SUCH  TAX,  PURSUANT  TO THE PROVISIONS REFERENCED IN SUBDIVISION (F) OF
THIS SECTION, FOR ELIGIBLE REAL PROPERTY  TAXES  FOR  ITS  BUSINESS  TAX
BENEFIT PERIOD.
  (B)  AMOUNT OF CREDIT. AN ELIGIBLE HIGH-TECH ENTERPRISE SHALL BE ENTI-
TLED TO RECEIVE A CREDIT EQUAL TO THE GREATER OF:  (1) THE  PRODUCT  (OR
PRO RATA SHARE OF THE PRODUCT, IN THE CASE OF A MEMBER OF A PARTNERSHIP)
OF  TWENTY-FIVE  PERCENT OF THE TOTAL WAGES, HEALTH BENEFITS AND RETIRE-
MENT BENEFITS PAID TO OR ON BEHALF OF NET NEW EMPLOYEES DURING THE TAXA-
BLE YEAR, PROVIDED HOWEVER, THAT THE TOTAL AMOUNT OF  THE  CREDIT  SHALL
NOT EXCEED TEN THOUSAND DOLLARS FOR EACH SUCH EMPLOYEE, OR
  (2)  THE  PRODUCT OF (A) TEN PERCENT OF THE GREATER OF (I) THE COST OR
OTHER BASIS FOR FEDERAL INCOME TAX PURPOSES OF REAL PROPERTY,  INCLUDING
BUILDINGS  AND STRUCTURAL COMPONENTS OF BUILDINGS AND CAPITAL EQUIPMENT,
OWNED BY THE ELIGIBLE HIGH-TECH ENTERPRISE AT  LOCATIONS  OF  ITS  OPER-
ATIONS  IDENTIFIED TO THE COMMISSIONER OF ECONOMIC DEVELOPMENT AS DETER-
MINED ON THE EFFECTIVE DATE, AS DEFINED IN SUBDIVISION  (E)  OF  SECTION
THREE HUNDRED FIFTY OF THE ECONOMIC DEVELOPMENT LAW, OR (II) THE COST OR
OTHER  BASIS  FOR  FEDERAL  INCOME  TAX  PURPOSES  OF SUCH REAL PROPERTY
DESCRIBED IN CLAUSE (I) OF THIS SUBPARAGRAPH ON  THE  LAST  DAY  OF  THE
TAXABLE  YEAR,  AND  (B)  THE GREATER OF (I) THE PERCENTAGE OF SUCH REAL
PROPERTY DESCRIBED IN CLAUSE (I) OF SUBPARAGRAPH (A) OF  THIS  PARAGRAPH
WHICH  IS  PHYSICALLY OCCUPIED AND USED BY THE ELIGIBLE HIGH-TECH ENTER-
PRISE, OR (II) THE PERCENTAGE OF SUCH  COST  OR  OTHER  BASIS  WHICH  IS
ATTRIBUTABLE  TO  THE  CONSTRUCTION, EXPANSION OR REHABILITATION OF SUCH
PROPERTY, RATHER THAN THE ACQUISITION OF  SUCH  REAL  PROPERTY,  BY  THE
ELIGIBLE HIGH-TECH ENTERPRISE.
  PROVIDED,  HOWEVER,  IF  THE  PERCENTAGE  OF SUCH COST OR OTHER BASIS,
WHICH IS ATTRIBUTABLE TO THE CONSTRUCTION, EXPANSION  OR  REHABILITATION
OF SUCH REAL PROPERTY EQUALS OR EXCEEDS FIFTY PERCENT, THEN THE PERCENT-
AGE DESCRIBED IN CLAUSE (II) OF SUBPARAGRAPH (B) OF THIS PARAGRAPH SHALL
BE  DEEMED  TO  BE  ONE HUNDRED PERCENT. FOR PURPOSES OF COMPUTING TOTAL

S. 6995                             5

WAGES, HEALTH BENEFITS AND RETIREMENT BENEFITS, WAGES,  HEALTH  BENEFITS
AND  RETIREMENT  BENEFITS  FOR EACH EMPLOYEE IN EXCESS OF FORTY THOUSAND
DOLLARS SHALL BE EXCLUDED FROM SUCH COMPUTATION. PROVIDED  FURTHER,  THE
AMOUNT  OF  THE  CREDIT  MAY  NOT  EXCEED THE CREDIT AMOUNT SET FORTH IN
SUBDIVISION (C) OF THIS SECTION.
  (C) ELIGIBLE REAL PROPERTY TAXES. THE  TERM  "ELIGIBLE  REAL  PROPERTY
TAXES" MEANS TAXES IMPOSED ON REAL PROPERTY WHICH IS OWNED BY THE ELIGI-
BLE HIGH-TECH ENTERPRISE AT THE LOCATION OF ITS OPERATIONS IDENTIFIED TO
THE  COMMISSIONER  IN  ITS  APPLICATION  TO  BE  TREATED  AS AN ELIGIBLE
HIGH-TECH ENTERPRISE, PROVIDED SUCH  TAXES  ARE  PAID  BY  THE  ELIGIBLE
HIGH-TECH  ENTERPRISE  WHICH  IS THE OWNER OF THE REAL PROPERTY AND SUCH
TAXES BECOME A LIEN ON THE REAL PROPERTY DURING  THE  TAXABLE  YEAR.  IN
ADDITION,  "ELIGIBLE REAL PROPERTY TAXES" SHALL INCLUDE TAXES PAID BY AN
ELIGIBLE HIGH-TECH ENTERPRISE WHICH IS A LESSEE OF REAL PROPERTY IF  THE
FOLLOWING CONDITIONS ARE SATISFIED:
  (1) THE TAXES MUST BE PAID BY THE LESSEE PURSUANT TO EXPLICIT REQUIRE-
MENTS IN A WRITTEN LEASE,
  (2)  SUCH  TAXES BECOME A LIEN ON THE REAL PROPERTY DURING THE TAXABLE
YEAR AND
  (3) THE LESSEE HAS MADE DIRECT PAYMENT OF SUCH  TAXES  TO  THE  TAXING
AUTHORITY  AND HAS RECEIVED A RECEIPT FOR SUCH PAYMENT OF TAXES FROM THE
TAXING AUTHORITY. IN ADDITION, THE TERM "ELIGIBLE REAL  PROPERTY  TAXES"
INCLUDES PAYMENTS IN LIEU OF TAXES MADE BY THE ELIGIBLE HIGH-TECH ENTER-
PRISE  TO  THE STATE, A MUNICIPAL CORPORATION OR A PUBLIC BENEFIT CORPO-
RATION PURSUANT TO A WRITTEN AGREEMENT ENTERED INTO BETWEEN THE ELIGIBLE
HIGH-TECH ENTERPRISE AND THE STATE,  MUNICIPAL  CORPORATION,  OR  PUBLIC
BENEFIT CORPORATION.
  (4) PROVIDED, HOWEVER, A PAYMENT IN LIEU OF TAXES MADE BY THE ELIGIBLE
HIGH-TECH  ENTERPRISE  PURSUANT TO A WRITTEN AGREEMENT SHALL NOT CONSTI-
TUTE ELIGIBLE REAL PROPERTY TAXES IN ANY TAXABLE YEAR TO THE EXTENT THAT
SUCH PAYMENT EXCEEDS THE PRODUCT OF (A) THE ASSESSED VALUE OF THE  PROP-
ERTY,  AND  (B)  THE  CURRENT TAX RATE WITHIN THE TAXING JURISDICTION IN
WHICH SUCH PROPERTY IS LOCATED, AS MOST RECENTLY REPORTED TO THE COMMIS-
SIONER BY THE SECRETARY OF THE STATE BOARD OF REAL PROPERTY SERVICES, OR
HIS OR HER DESIGNEE.
  (D) CREDIT RECAPTURE. WHERE AN ELIGIBLE HIGH-TECH ENTERPRISE'S  ELIGI-
BLE  REAL  PROPERTY  TAXES WHICH WERE THE BASIS FOR THE ALLOWANCE OF THE
CREDIT PROVIDED FOR UNDER THIS SECTION ARE  SUBSEQUENTLY  REDUCED  AS  A
RESULT  OF  A  FINAL  ORDER IN ANY PROCEEDING UNDER ARTICLE SEVEN OF THE
REAL PROPERTY TAX LAW OR OTHER PROVISION OF LAW, THE TAXPAYER SHALL  ADD
BACK,  IN  THE  TAXABLE  YEAR  IN  WHICH SUCH FINAL ORDER IS ISSUED, THE
EXCESS OF (1) THE AMOUNT OF CREDIT ORIGINALLY ALLOWED FOR A TAXABLE YEAR
OVER (2) THE AMOUNT OF CREDIT DETERMINED BASED UPON THE REDUCED ELIGIBLE
REAL PROPERTY TAXES. IF SUCH FINAL ORDER REDUCES REAL PROPERTY TAXES FOR
MORE THAN ONE YEAR,  THE  TAXPAYER  MUST  DETERMINE  HOW  MUCH  OF  SUCH
REDUCTION  IS  ATTRIBUTABLE TO EACH YEAR COVERED BY SUCH FINAL ORDER AND
CALCULATE THE AMOUNT OF CREDIT WHICH IS REQUIRED BY THIS SUBDIVISION  TO
BE RECAPTURED FOR EACH YEAR BASED ON SUCH REDUCTION.
  (E)  REFUND.    IF THE AMOUNT OF THE CREDIT ALLOWED UNDER THIS SECTION
FOR ANY TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S TAX FOR SUCH YEAR,  THE
EXCESS  SHALL  BE  TREATED  AS  AN  OVERPAYMENT OF TAX TO BE CREDITED OR
REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION SIX HUNDRED EIGHT-
Y-SIX OF THIS CHAPTER, PROVIDED, HOWEVER, THAT NO INTEREST SHALL BE PAID
THEREON.
  (F) DEFINITIONS AND CROSS-REFERENCES. FOR DEFINITIONS OF TERMS USED IN
THIS SECTION SEE SECTION TWO OF THIS ARTICLE.  FOR  APPLICATION  OF  THE

S. 6995                             6

CREDIT  PROVIDED  FOR  IN  THIS SECTION, SEE THE FOLLOWING PROVISIONS OF
THIS CHAPTER:
  (1) ARTICLE 9-A: SECTION 210: SUBDIVISION 27-A.
  (2) ARTICLE 22: SECTION 606: SUBSECTIONS (I) AND (BB-1).
  S  34.  INNOVATION  TECHNOLOGY TAX REDUCTION CREDIT.  (A) ALLOWANCE OF
CREDIT. A TAXPAYER WHICH IS AN ELIGIBLE HIGH-TECH ENTERPRISE,  OR  WHICH
IS  A SOLE PROPRIETOR OF AN ELIGIBLE HIGH-TECH ENTERPRISE OR A MEMBER OF
A PARTNERSHIP WHICH IS AN ELIGIBLE HIGH-TECH ENTERPRISE,  AND  WHICH  IS
SUBJECT TO TAX UNDER ARTICLE NINE-A OR TWENTY-TWO OF THIS CHAPTER, SHALL
BE  ALLOWED A CREDIT AGAINST SUCH TAX, PURSUANT TO THE PROVISIONS REFER-
ENCED IN SUBDIVISION (G) OF THIS SECTION, TO BE COMPUTED AS  HEREINAFTER
PROVIDED FOR ITS BUSINESS TAX BENEFIT PERIOD.
  (B) AMOUNT OF CREDIT. THE AMOUNT OF THE CREDIT SHALL BE THE PRODUCT OF
(1)  THE  BENEFIT PERIOD FACTOR, (2) THE EMPLOYMENT INCREASE FACTOR, (3)
THE LOCATION ALLOCATION FACTOR AND (4) THE TAX FACTOR.
  (C) BENEFIT PERIOD FACTOR. THE BENEFIT PERIOD FACTOR SHALL  EQUAL  1.0
FOR EACH TAXABLE YEAR OF THE BUSINESS TAX BENEFIT PERIOD.
  (D)  EMPLOYMENT INCREASE FACTOR. (1) THE EMPLOYMENT INCREASE FACTOR IS
THE AMOUNT, NOT TO EXCEED 1.0, WHICH IS THE GREATER OF:
  (I) THE EXCESS  OF  THE  ELIGIBLE  HIGH-TECH  ENTERPRISE'S  EMPLOYMENT
NUMBER AT THE LOCATIONS OF ITS OPERATIONS IDENTIFIED TO THE COMMISSIONER
IN  ITS  APPLICATION  TO BE TREATED AS AN ELIGIBLE HIGH-TECH ENTERPRISE,
OVER THE ELIGIBLE HIGH-TECH ENTERPRISE'S TEST YEAR EMPLOYMENT NUMBER  AT
SUCH  LOCATION,  DIVIDED  BY  SUCH  TEST  YEAR EMPLOYMENT NUMBER AT SUCH
LOCATION; OR
  (II) THE EXCESS OF  THE  ELIGIBLE  HIGH-TECH  ENTERPRISE'S  EMPLOYMENT
NUMBER  IN  SUCH  LOCATIONS  FOR  THE  TAXABLE  YEAR  OVER  THE ELIGIBLE
HIGH-TECH ENTERPRISE'S TEST YEAR EMPLOYMENT NUMBER  IN  SUCH  LOCATIONS,
DIVIDED BY 100.
  (2)  FOR PURPOSES OF PARAGRAPH ONE OF THIS SUBDIVISION, WHERE THERE IS
AN EXCESS AS DESCRIBED IN  SUCH  PARAGRAPH,  AND  WHERE  THE  TEST  YEAR
EMPLOYMENT  NUMBER  AS  SUCH  TERMS ARE DEFINED IN SECTION THREE HUNDRED
FIFTY-ONE OF THE ECONOMIC DEVELOPMENT LAW IS ZERO, THEN  THE  EMPLOYMENT
INCREASE FACTOR SHALL BE 1.0.
  (E)  LOCATION  ALLOCATION FACTOR. THE LOCATION ALLOCATION FACTOR SHALL
BE THE  PERCENTAGE  REPRESENTING  THE  ELIGIBLE  HIGH-TECH  ENTERPRISE'S
ECONOMIC  PRESENCE  AT  LOCATIONS  OF  ITS  OPERATIONS IDENTIFIED TO THE
COMMISSIONER OF ECONOMIC DEVELOPMENT IN ITS APPLICATION TO BE TREATED AS
AN ELIGIBLE HIGH-TECH ENTERPRISE. THIS PERCENTAGE SHALL BE COMPUTED BY:
  (1) ASCERTAINING THE PERCENTAGE WHICH THE AVERAGE VALUE OF THE  ELIGI-
BLE  HIGH-TECH ENTERPRISE'S REAL AND TANGIBLE PERSONAL PROPERTY, WHETHER
OWNED OR RENTED TO IT, AT LOCATIONS OF ITS OPERATIONS IDENTIFIED TO  THE
COMMISSIONER OF ECONOMIC DEVELOPMENT IN ITS APPLICATION TO BE TREATED AS
AN  ELIGIBLE  HIGH-TECH  ENTERPRISE  DURING  THE  PERIOD  COVERED BY THE
TAXPAYER'S REPORT OR RETURN BEARS TO THE AVERAGE VALUE OF  THE  ELIGIBLE
HIGH-TECH  ENTERPRISE'S  REAL  AND  TANGIBLE  PERSONAL PROPERTY, WHETHER
OWNED OR RENTED TO IT, WITHIN THE STATE DURING SUCH PERIOD; AND
  (2) ASCERTAINING THE PERCENTAGE OF THE TOTAL WAGES, SALARIES AND OTHER
PERSONAL SERVICE COMPENSATION, SIMILARLY COMPUTED, DURING SUCH PERIOD OF
EMPLOYEES, EXCEPT GENERAL EXECUTIVE OFFICERS, OF THE ELIGIBLE  HIGH-TECH
ENTERPRISE AT LOCATIONS OF ITS OPERATIONS IDENTIFIED TO THE COMMISSIONER
OF  ECONOMIC DEVELOPMENT IN ITS APPLICATION TO BE TREATED AS AN ELIGIBLE
HIGH-TECH ENTERPRISE, TO THE TOTAL WAGES, SALARIES  AND  OTHER  PERSONAL
SERVICE COMPENSATION, SIMILARLY COMPUTED, DURING SUCH PERIOD, OF ALL THE
ELIGIBLE  HIGH-TECH  ENTERPRISE'S  EMPLOYEES  WITHIN  THE  STATE, EXCEPT
GENERAL EXECUTIVE OFFICERS; AND

S. 6995                             7

  (3) ADDING TOGETHER THE PERCENTAGES SO  DETERMINED  AND  DIVIDING  THE
RESULT  BY THE NUMBER OF PERCENTAGES. FOR PURPOSES OF ARTICLE TWENTY-TWO
OF THIS CHAPTER, REFERENCES IN  THIS  SUBDIVISION  TO  PROPERTY,  WAGES,
SALARIES  AND  OTHER PERSONAL SERVICE COMPENSATION SHALL BE DEEMED TO BE
REFERENCES TO SUCH ITEMS CONNECTED WITH THE CONDUCT OF A BUSINESS.
  (F)  TAX  FACTOR. (1) GENERAL. THE TAX FACTOR SHALL BE, IN THE CASE OF
ARTICLE NINE-A OF THIS CHAPTER, THE LARGER OF THE AMOUNTS OF TAX  DETER-
MINED  FOR  THE TAXABLE YEAR UNDER PARAGRAPHS (A) AND (C) OF SUBDIVISION
ONE OF SECTION TWO HUNDRED TEN OF THIS CHAPTER. THE TAX FACTOR SHALL BE,
IN THE CASE OF ARTICLE TWENTY-TWO OF THIS CHAPTER,  THE  TAX  DETERMINED
FOR  THE  TAXABLE  YEAR UNDER SUBSECTIONS (A) THROUGH (D) OF SECTION SIX
HUNDRED ONE OF THIS CHAPTER.
  (2) SOLE PROPRIETORS, PARTNERS AND  S  CORPORATION  SHAREHOLDERS.  (A)
WHERE  THE TAXPAYER IS A SOLE PROPRIETOR OF AN ELIGIBLE HIGH-TECH ENTER-
PRISE, THE TAXPAYER'S TAX FACTOR SHALL BE THAT  PORTION  OF  THE  AMOUNT
DETERMINED IN PARAGRAPH ONE OF THIS SUBDIVISION WHICH IS ATTRIBUTABLE TO
THE  INCOME OF THE ELIGIBLE HIGH-TECH ENTERPRISE. SUCH ATTRIBUTION SHALL
BE MADE IN ACCORDANCE WITH THE RATIO OF THE TAXPAYER'S INCOME  FROM  THE
ELIGIBLE  HIGH-TECH ENTERPRISE ALLOCATED WITHIN THE STATE, ENTERING INTO
NEW YORK ADJUSTED GROSS INCOME, TO  THE  TAXPAYER'S  NEW  YORK  ADJUSTED
GROSS  INCOME,  OR  IN ACCORDANCE WITH SUCH OTHER METHODS AS THE COMMIS-
SIONER MAY PRESCRIBE AS  PROVIDING  AN  APPORTIONMENT  WHICH  REASONABLY
REFLECTS THE PORTION OF THE TAXPAYER'S TAX ATTRIBUTABLE TO THE INCOME OF
THE  ELIGIBLE  HIGH-TECH ENTERPRISE. IN NO EVENT MAY THE RATIO SO DETER-
MINED EXCEED 1.0.
  (B)(I) WHERE THE TAXPAYER IS A MEMBER OF A  PARTNERSHIP  WHICH  IS  AN
ELIGIBLE  HIGH-TECH  ENTERPRISE, THE TAXPAYER'S TAX FACTOR SHALL BE THAT
PORTION OF THE AMOUNT DETERMINED IN PARAGRAPH ONE  OF  THIS  SUBDIVISION
WHICH IS ATTRIBUTABLE TO THE INCOME OF THE PARTNERSHIP. SUCH ATTRIBUTION
SHALL  BE MADE IN ACCORDANCE WITH THE RATIO OF THE PARTNER'S INCOME FROM
THE PARTNERSHIP ALLOCATED WITHIN  THE  STATE  TO  THE  PARTNER'S  ENTIRE
INCOME, OR IN ACCORDANCE WITH SUCH OTHER METHODS AS THE COMMISSIONER MAY
PRESCRIBE  AS  PROVIDING  AN APPORTIONMENT WHICH REASONABLY REFLECTS THE
PORTION OF THE PARTNER'S TAX ATTRIBUTABLE TO THE INCOME OF THE  PARTNER-
SHIP. IN NO EVENT MAY THE RATIO SO DETERMINED EXCEED 1.0.
  (II)  FOR  PURPOSES OF ARTICLE NINE-A OF THIS CHAPTER, THE TERM "PART-
NER'S INCOME FROM THE PARTNERSHIP" MEANS PARTNERSHIP  ITEMS  OF  INCOME,
GAIN,  LOSS  AND DEDUCTION, AND NEW YORK MODIFICATIONS THERETO, ENTERING
INTO ENTIRE NET INCOME, MINIMUM TAXABLE INCOME, ALTERNATIVE  ENTIRE  NET
INCOME  OR  ENTIRE  NET INCOME PLUS COMPENSATION AND THE TERM "PARTNER'S
ENTIRE INCOME" MEANS ENTIRE NET INCOME, MINIMUM TAXABLE INCOME, ALTERNA-
TIVE ENTIRE NET INCOME OR ENTIRE NET INCOME PLUS COMPENSATION, ALLOCATED
WITHIN THE STATE. FOR PURPOSES OF ARTICLE TWENTY-TWO  OF  THIS  CHAPTER,
THE TERM "PARTNER'S INCOME FROM THE PARTNERSHIP" MEANS PARTNERSHIP ITEMS
OF INCOME, GAIN, LOSS AND DEDUCTION, AND NEW YORK MODIFICATIONS THERETO,
ENTERING  INTO  NEW  YORK ADJUSTED GROSS INCOME, AND THE TERM "PARTNER'S
ENTIRE INCOME" MEANS NEW YORK ADJUSTED GROSS INCOME.
  (C) WHERE THE TAXPAYER IS A SHAREHOLDER OF A NEW  YORK  S  CORPORATION
WHICH  IS AN ELIGIBLE HIGH-TECH ENTERPRISE, THE SHAREHOLDER'S TAX FACTOR
SHALL BE THAT PORTION OF THE AMOUNT DETERMINED IN PARAGRAPH ONE OF  THIS
SUBDIVISION  WHICH  IS  ATTRIBUTABLE TO THE INCOME OF THE S CORPORATION.
SUCH ATTRIBUTION SHALL BE MADE IN  ACCORDANCE  WITH  THE  RATIO  OF  THE
SHAREHOLDER'S  INCOME FROM THE S CORPORATION ALLOCATED WITHIN THE STATE,
ENTERING INTO NEW YORK ADJUSTED GROSS INCOME, TO THE  SHAREHOLDER'S  NEW
YORK  ADJUSTED GROSS INCOME, OR IN ACCORDANCE WITH SUCH OTHER METHODS AS
THE COMMISSIONER MAY  PRESCRIBE  AS  PROVIDING  AN  APPORTIONMENT  WHICH

S. 6995                             8

REASONABLY REFLECTS THE PORTION OF THE SHAREHOLDER'S TAX ATTRIBUTABLE TO
THE  INCOME  OF  THE  ELIGIBLE HIGH-TECH ENTERPRISE. IN NO EVENT MAY THE
RATIO SO DETERMINED EXCEED 1.0.
  (3) COMBINED RETURNS OR REPORTS. (A) WHERE THE TAXPAYER IS AN ELIGIBLE
HIGH-TECH  ENTERPRISE  AND  IS REQUIRED OR PERMITTED TO MAKE A RETURN OR
REPORT ON A COMBINED BASIS UNDER ARTICLE NINE-A  OF  THIS  CHAPTER,  THE
TAXPAYER'S TAX FACTOR SHALL BE THE AMOUNT DETERMINED IN PARAGRAPH ONE OF
THIS  SUBDIVISION  WHICH  IS  ATTRIBUTABLE TO THE INCOME OF THE ELIGIBLE
HIGH-TECH ENTERPRISE. SUCH ATTRIBUTION SHALL BE MADE IN ACCORDANCE  WITH
THE RATIO OF THE ELIGIBLE HIGH-TECH ENTERPRISE'S INCOME ALLOCATED WITHIN
THE  STATE  TO  THE  COMBINED GROUP'S INCOME, OR IN ACCORDANCE WITH SUCH
OTHER METHODS AS THE COMMISSIONER MAY PRESCRIBE AS PROVIDING  AN  APPOR-
TIONMENT  WHICH  REASONABLY REFLECTS THE PORTION OF THE COMBINED GROUP'S
TAX ATTRIBUTABLE TO THE INCOME OF THE ELIGIBLE HIGH-TECH ENTERPRISE.  IN
NO EVENT MAY THE RATIO SO DETERMINED EXCEED 1.0.
  (B)  THE  TERM  "INCOME  OF  THE  ELIGIBLE HIGH-TECH ENTERPRISE" MEANS
ENTIRE NET INCOME, MINIMUM TAXABLE INCOME, ALTERNATIVE ENTIRE NET INCOME
OR ENTIRE NET INCOME PLUS COMPENSATION CALCULATED AS IF THE TAXPAYER WAS
FILING SEPARATELY AND THE TERM "COMBINED GROUP'S  INCOME"  MEANS  ENTIRE
NET  INCOME,  MINIMUM  TAXABLE  INCOME, ALTERNATIVE ENTIRE NET INCOME OR
ENTIRE NET INCOME PLUS COMPENSATION AS SHOWN ON THE COMBINED  RETURN  OR
REPORT, ALLOCATED WITHIN THE STATE.
  (4) DENIAL OF ALLOWANCE.  IF THE AMOUNT DETERMINED IN PARAGRAPH ONE OF
THIS  SUBDIVISION  IS  LESS THAN ZERO, A TAXPAYER SHALL NOT BE ALLOWED A
CREDIT UNDER THIS SECTION.
  (G) DEFINITIONS AND CROSS-REFERENCES. FOR DEFINITIONS OF TERMS USED IN
THIS SECTION SEE SECTION TWO OF THIS ARTICLE.  FOR  APPLICATION  OF  THE
CREDIT  PROVIDED  FOR  IN  THIS SECTION, SEE THE FOLLOWING PROVISIONS OF
THIS CHAPTER:
  (1) ARTICLE 9-A: SECTION 210: SUBDIVISION 28-A.
  (2) ARTICLE 22: SECTION 606: SUBSECTIONS (I) AND (CC-1).
  S 35. INNOVATION TECHNOLOGY INVESTMENT TAX CREDIT.  (A) (1) AN  ELIGI-
BLE HIGH-TECH ENTERPRISE SUBJECT TO TAX UNDER ARTICLE NINE-A OF THE THIS
CHAPTER  SHALL  BE  ALLOWED  A  CREDIT,  TO  BE  COMPUTED AS HEREINAFTER
PROVIDED, AGAINST THE TAX IMPOSED UNDER SUCH ARTICLE NINE-A. THE  AMOUNT
OF  SUCH  CREDIT  SHALL  BE  TEN  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 SUBDIVISION (B) OF THIS SECTION, WHICH IS PLACED
IN SERVICE BY AN ELIGIBLE HIGH-TECH ENTERPRISE, BUT ONLY IF THE ACQUISI-
TION, CONSTRUCTION, RECONSTRUCTION OR ERECTION OF SUCH PROPERTY OR CAPI-
TAL EQUIPMENT OCCURRED OR WAS COMMENCED ON OR AFTER THE  TEST  DATE,  AS
DEFINED  IN  SECTION THREE HUNDRED FIFTY-ONE OF THE ECONOMIC DEVELOPMENT
LAW.  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 TEN
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 EXPENDI-
TURES PAID  OR  INCURRED  FOR  SUCH  ACQUISITION,  CONSTRUCTION,  RECON-
STRUCTION OR ERECTION.
  (2)  AN  ELIGIBLE  HIGH-TECH  ENTERPRISE  SUBJECT TO TAX UNDER ARTICLE
TWENTY-TWO OF THIS CHAPTER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED  AS
HEREINAFTER  PROVIDED,  AGAINST THE TAX IMPOSED UNDER SUCH ARTICLE TWEN-

S. 6995                             9

TY-TWO.  THE AMOUNT OF SUCH CREDIT SHALL BE EIGHT PERCENT OF THE COST OR
OTHER BASIS FOR FEDERAL INCOME TAX PURPOSES OF TANGIBLE PERSONAL PROPER-
TY AND OTHER  TANGIBLE  PROPERTY,  INCLUDING  BUILDINGS  AND  STRUCTURAL
COMPONENTS  OF BUILDINGS AND CAPITAL EQUIPMENT, DESCRIBED IN SUBDIVISION
(B) OF THIS SECTION, WHICH IS PLACED IN SERVICE BY AN ELIGIBLE HIGH-TECH
ENTERPRISE, BUT ONLY IF THE ACQUISITION, CONSTRUCTION, RECONSTRUCTION OR
ERECTION OF SUCH PROPERTY OR EQUIPMENT OCCURRED OR WAS COMMENCED  ON  OR
AFTER  THE  TEST  DATE, AS DEFINED IN SECTION THREE HUNDRED FIFTY-ONE OF
THE ECONOMIC DEVELOPMENT LAW.  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 EIGHT 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 SECTION WITH RESPECT TO
TANGIBLE PERSONAL PROPERTY AND OTHER TANGIBLE PROPERTY, INCLUDING BUILD-
INGS AND STRUCTURAL COMPONENTS OF BUILDINGS AND CAPITAL EQUIPMENT 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, (4) HAVE A SITUS IN A LOCATION OF  THE
ELIGIBLE HIGH-TECH ENTERPRISE'S OPERATIONS IDENTIFIED TO THE COMMISSION-
ER OF ECONOMIC DEVELOPMENT IN ITS APPLICATION TO BE TREATED AS AN ELIGI-
BLE  HIGH-TECH  ENTERPRISE,  AND  (5)  ARE  (A)  PRINCIPALLY USED BY THE
TAXPAYER IN THE PRODUCTION OF GOODS BY MANUFACTURING, PROCESSING, ASSEM-
BLING, (B)  INDUSTRIAL  WASTE  TREATMENT  FACILITIES  OR  AIR  POLLUTION
CONTROL  FACILITIES  USED  IN  THE  TAXPAYER'S TRADE OR BUSINESS, OR (C)
RESEARCH AND DEVELOPMENT PROPERTY. FOR PURPOSES OF THIS SUBDIVISION, THE
TERM "GOODS" SHALL NOT INCLUDE ELECTRICITY.  FOR PURPOSES OF THIS  PARA-
GRAPH,  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 "RESEARCH AND DEVEL-
OPMENT  PROPERTY",  "INDUSTRIAL  WASTE  TREATMENT  FACILITIES", AND "AIR
POLLUTION CONTROL FACILITIES" SHALL HAVE THE MEANINGS  ASCRIBED  THERETO
BY  PARAGRAPH  (B)  OF  SUBDIVISION TWELVE OF SECTION TWO HUNDRED TEN OF
THIS CHAPTER AND THE PROVISIONS OF PARAGRAPH  (C)  OF  SUCH  SUBDIVISION
TWELVE 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 AND
CAPITAL EQUIPMENT, WHICH IT LEASES TO ANY OTHER PERSON OR CORPORATION.
  (D) A TAXPAYER MAY CLAIM THE CREDIT ALLOWED UNDER THIS SECTION FOR TEN
YEARS, COMMENCING WITH THE PERIOD THE TAXPAYER PLACES THE PROPERTY  THAT
COMPRISES  THE PROJECT IN SERVICE. IF THE AMOUNT OF CREDIT ALLOWED UNDER

S. 6995                            10

THIS SECTION 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. IN
LIEU  OF  CARRYING  OVER ANY SUCH EXCESS, A TAXPAYER MAY, AT HIS OPTION,
RECEIVE FIFTY PERCENT OF SUCH EXCESS AS A REFUND. 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.
  (E) AT THE OPTION OF THE TAXPAYER,  AIR  OR  WATER  POLLUTION  CONTROL
FACILITIES WHICH QUALIFY FOR ELECTIVE MODIFICATIONS UNDER SUBSECTION (H)
OF  SECTION SIX HUNDRED TWELVE OF THIS CHAPTER, OR RESEARCH AND DEVELOP-
MENT FACILITIES WHICH QUALIFY FOR ELECTIVE MODIFICATION UNDER PARAGRAPHS
THREE AND FOUR OF SUBSECTION (G) OF SECTION SIX HUNDRED TWELVE  OF  THIS
CHAPTER,  OR  PROPERTY  WHICH  QUALIFIES  FOR  THE CREDIT PROVIDED UNDER
SUBDIVISION (A) OF THIS SECTION MAY BE TREATED AS  PROPERTY  PRINCIPALLY
USED  BY THE TAXPAYER IN THE PRODUCTION OF GOODS BY MANUFACTURING, PROC-
ESSING, OR ASSEMBLING, PROVIDED THE PROPERTY OTHERWISE  QUALIFIES  UNDER
PARAGRAPH  TWO  OF  SUBDIVISION  (A)  OF  THIS SECTION, IN WHICH EVENT A
DEDUCTION SHALL NOT BE ALLOWED UNDER SUCH SUBSECTION (H) OR  SUCH  PARA-
GRAPHS  THREE  AND  FOUR  OF  SUBSECTION  (G)  AND A CREDIT SHALL NOT BE
ALLOWED UNDER SUCH SUBSECTION (G) OR (H).
  (F) (1) WITH RESPECT TO PROPERTY  WHICH  IS  DEPRECIABLE  PURSUANT  TO
SECTION  ONE HUNDRED SIXTY-SEVEN OF THE INTERNAL REVENUE CODE BUT IS NOT
SUBJECT TO THE PROVISIONS OF SECTION ONE  HUNDRED  SIXTY-EIGHT  OF  SUCH
CODE  AND WHICH IS DISPOSED OF OR CEASES TO BE IN QUALIFIED USE PRIOR TO
THE END OF THE TAXABLE YEAR IN WHICH THE CREDIT  IS  TO  BE  TAKEN,  THE
AMOUNT OF THE CREDIT SHALL BE THAT PORTION OF THE CREDIT PROVIDED FOR IN
THIS  SECTION  WHICH  REPRESENTS THE RATIO WHICH THE MONTHS OF QUALIFIED
USE BEAR TO THE MONTHS OF USEFUL LIFE. IF THE PROPERTY ON  WHICH  CREDIT
HAS  BEEN TAKEN IS DISPOSED OF OR CEASES TO BE IN QUALIFIED USE PRIOR TO
THE END OF ITS USEFUL LIFE, THE DIFFERENCE BETWEEN THE CREDIT TAKEN  AND
THE  CREDIT  ALLOWED  FOR  ACTUAL  USE MUST BE ADDED BACK IN THE YEAR OF
DISPOSITION. PROVIDED, HOWEVER, IF SUCH PROPERTY IS DISPOSED OF OR CEAS-
ES TO BE IN QUALIFIED USE AFTER IT HAS BEEN IN QUALIFIED  USE  FOR  MORE
THAN TWELVE CONSECUTIVE YEARS, IT SHALL NOT BE NECESSARY TO ADD BACK THE
CREDIT AS PROVIDED IN THIS SUBDIVISION. THE AMOUNT OF CREDIT ALLOWED FOR
ACTUAL USE SHALL BE DETERMINED BY MULTIPLYING THE ORIGINAL CREDIT BY THE
RATIO  WHICH  THE  MONTHS  OF QUALIFIED USE BEAR TO THE MONTHS OF USEFUL
LIFE. FOR PURPOSES OF THIS SUBDIVISION, USEFUL LIFE OF PROPERTY SHALL BE
THE SAME AS THE TAXPAYER USES FOR DEPRECIATION PURPOSES  WHEN  COMPUTING
HIS FEDERAL INCOME TAX LIABILITY.
  (2) EXCEPT WITH RESPECT TO THAT PROPERTY TO WHICH SUBPARAGRAPH FOUR OF
THIS  PARAGRAPH  APPLIES,  WITH  RESPECT  TO  PROPERTY  SUBJECT  TO  THE
PROVISIONS OF SECTION ONE HUNDRED SIXTY-EIGHT OF  THE  INTERNAL  REVENUE
CODE OTHER THAN THREE-YEAR PROPERTY AS DEFINED IN SUBSECTION (E) OF SUCH
SECTION  ONE  HUNDRED  SIXTY-EIGHT OF THE INTERNAL REVENUE CODE WHICH IS
DISPOSED OF OR CEASES TO BE IN QUALIFIED USE PRIOR TO  THE  END  OF  THE
TAXABLE YEAR IN WHICH THE CREDIT IS TO BE TAKEN, THE AMOUNT OF THE CRED-
IT  SHALL BE THAT PORTION OF THE CREDIT PROVIDED FOR IN THIS SUBDIVISION
WHICH REPRESENTS THE RATIO WHICH THE MONTHS OF  QUALIFIED  USE  BEAR  TO
SIXTY.  IF  PROPERTY  ON  WHICH  CREDIT HAS BEEN TAKEN IS DISPOSED OF OR
CEASES TO BE IN QUALIFIED USE PRIOR TO THE  END  OF  SIXTY  MONTHS,  THE
DIFFERENCE  BETWEEN  THE  CREDIT TAKEN AND THE CREDIT ALLOWED FOR ACTUAL
USE MUST BE ADDED BACK IN THE YEAR OF DISPOSITION.  THE AMOUNT OF CREDIT
ALLOWED FOR ACTUAL USE SHALL BE DETERMINED BY MULTIPLYING  THE  ORIGINAL
CREDIT BY THE RATIO WHICH THE MONTHS OF QUALIFIED USE BEAR TO SIXTY.

S. 6995                            11

  (3)  WITH  RESPECT  TO  ANY  PROPERTY  TO  WHICH  SECTION  ONE HUNDRED
SIXTY-EIGHT OF THE INTERNAL REVENUE CODE APPLIES, WHICH IS A BUILDING OR
A STRUCTURAL COMPONENT OF A BUILDING AND WHICH IS DISPOSED OF OR  CEASES
TO BE IN QUALIFIED USE PRIOR TO THE END OF THE TAXABLE YEAR IN WHICH THE
CREDIT IS TO BE TAKEN, THE AMOUNT OF THE CREDIT SHALL BE THAT PORTION OF
THE  CREDIT  PROVIDED FOR IN THIS SUBDIVISION WHICH REPRESENTS THE RATIO
WHICH THE MONTHS OF QUALIFIED USE BEAR TO THE  TOTAL  NUMBER  OF  MONTHS
OVER  WHICH THE TAXPAYER CHOOSES TO DEDUCT THE PROPERTY UNDER THE INTER-
NAL REVENUE CODE. IF PROPERTY ON WHICH CREDIT HAS BEEN TAKEN IS DISPOSED
OF OR CEASES TO BE IN QUALIFIED USE PRIOR TO THE END OF THE PERIOD  OVER
WHICH  THE  TAXPAYER  CHOOSES  TO DEDUCT THE PROPERTY UNDER THE INTERNAL
REVENUE CODE, THE DIFFERENCE BETWEEN THE CREDIT  TAKEN  AND  THE  CREDIT
ALLOWED  FOR  ACTUAL  USE MUST BE ADDED BACK IN THE YEAR OF DISPOSITION.
PROVIDED, HOWEVER, IF SUCH PROPERTY IS DISPOSED OF OR CEASES  TO  BE  IN
QUALIFIED  USE  AFTER  IT HAS BEEN IN QUALIFIED USE FOR MORE THAN TWELVE
CONSECUTIVE YEARS, IT SHALL NOT BE NECESSARY TO ADD BACK THE  CREDIT  AS
PROVIDED  IN  THIS SUBPARAGRAPH. THE AMOUNT OF CREDIT ALLOWED FOR ACTUAL
USE SHALL BE DETERMINED BY MULTIPLYING THE ORIGINAL CREDIT BY THE  RATIO
WHICH  THE  MONTHS  OF  QUALIFIED USE BEAR TO THE TOTAL NUMBER OF MONTHS
OVER WHICH THE TAXPAYER CHOOSES TO DEDUCT THE PROPERTY UNDER THE  INTER-
NAL REVENUE CODE.
  (4)  FOR  PURPOSES  OF  THIS PARAGRAPH, WHERE A CREDIT IS ALLOWED WITH
RESPECT TO AN AIR POLLUTION CONTROL FACILITY ON THE BASIS OF  A  CERTIF-
ICATE  OF  COMPLIANCE  ISSUED PURSUANT TO THE ENVIRONMENTAL CONSERVATION
LAW AND THE CERTIFICATE IS REVOKED  PURSUANT  TO  SUBDIVISION  THREE  OF
SECTION  19-0309  OF THE ENVIRONMENTAL CONSERVATION LAW, SUCH REVOCATION
SHALL CONSTITUTE A DISPOSAL OR CESSATION OF QUALIFIED USE,  EXCEPT  WITH
RESPECT  TO  PROPERTY  CONTAINED  IN  OR  COMPRISING  SUCH  FACILITY  AS
DESCRIBED IN CLAUSE (A) OR (C) OF SUBPARAGRAPH (II) OF PARAGRAPH (B)  OF
SUBDIVISION  TWELVE  OF  SECTION  TWO HUNDRED TEN OF THIS CHAPTER, OTHER
THAN AS PART OF OR COMPRISING AN AIR POLLUTION CONTROL FACILITY.
  S 36. INNOVATION TECHNOLOGY EMPLOYMENT INCENTIVE CREDIT. (A)  WHERE  A
TAXPAYER  IS ALLOWED A CREDIT UNDER SECTION THIRTY-FIVE OF THIS ARTICLE,
THE TAXPAYER SHALL BE ALLOWED A CREDIT FOR EACH OF THE THREE YEARS  NEXT
SUCCEEDING  THE  TAXABLE  YEAR  FOR  WHICH THE CREDIT UNDER SUCH SECTION
THIRTY-FIVE IS ALLOWED, WITH RESPECT TO SUCH PROPERTY,  WHETHER  OR  NOT
DEDUCTIBLE IN SUCH TAXABLE YEAR OR IN SUBSEQUENT TAXABLE YEARS OF THIRTY
PERCENT   OF  THE  CREDIT  ALLOWABLE  UNDER  SUCH  SECTION  THIRTY-FIVE;
PROVIDED, HOWEVER, THAT THE CREDIT ALLOWABLE UNDER THIS SECTION FOR  ANY
TAXABLE  YEAR  SHALL  ONLY BE ALLOWED IF THE AVERAGE NUMBER OF EMPLOYEES
EMPLOYED BY THE TAXPAYER AT LOCATIONS OF ITS  OPERATIONS  IDENTIFIED  TO
THE COMMISSIONER OF ECONOMIC DEVELOPMENT IN ITS APPLICATION TO BE TREAT-
ED  AS  AN  ELIGIBLE  HIGH-TECH  ENTERPRISE,  IN  WHICH SUCH PROPERTY IS
LOCATED DURING SUCH TAXABLE YEAR IS AT LEAST ONE HUNDRED ONE PERCENT  OF
THE  AVERAGE  NUMBER  OF  EMPLOYEES  EMPLOYED  BY  THE  TAXPAYER IN SUCH
LOCATION DURING THE TAXABLE YEAR IMMEDIATELY PRECEDING THE TAXABLE  YEAR
FOR WHICH THE CREDIT UNDER SUCH SECTION THIRTY-FIVE IS ALLOWED.
  (B)  THE  AVERAGE  NUMBER  OF  EMPLOYEES EMPLOYED IN A LOCATION OF ITS
OPERATIONS IDENTIFIED TO THE COMMISSIONER OF ECONOMIC DEVELOPMENT IN ITS
APPLICATION TO BE TREATED AS AN ELIGIBLE HIGH-TECH ENTERPRISE IN A TAXA-
BLE YEAR SHALL BE COMPUTED BY ASCERTAINING THE NUMBER OF SUCH  EMPLOYEES
WITHIN SUCH LOCATION EMPLOYED BY THE TAXPAYER ON THE THIRTY-FIRST DAY OF
MARCH, THE THIRTIETH DAY OF JUNE, THE THIRTIETH DAY OF SEPTEMBER AND THE
THIRTY-FIRST DAY OF DECEMBER IN THE TAXABLE YEAR, BY ADDING TOGETHER THE
NUMBER  OF  EMPLOYEES ASCERTAINED IN EACH OF SUCH DATES AND DIVIDING THE

S. 6995                            12

SUM SO OBTAINED BY THE NUMBER OF  SUCH  ABOVEMENTIONED  DATES  OCCURRING
WITHIN THE TAXABLE YEAR.
  (C) IF THE AMOUNT OF CREDIT ALLOWED UNDER THIS SECTION 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. IN LIEU OF CARRYING OVER ANY SUCH
EXCESS, A TAXPAYER MAY, AT HIS OPTION, RECEIVE  FIFTY  PERCENT  OF  SUCH
EXCESS  AS A REFUND. 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  ARTICLE,  PROVIDED, HOWEVER, THAT NO
INTEREST SHALL BE PAID THEREON.
  S 5. Section 210 of the tax law is amended by adding a new subdivision
19-a to read as follows:
  19-A. INNOVATION TECHNOLOGY WAGE TAX 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 APPROVED AS  AN
ELIGIBLE  HIGH-TECH  ENTERPRISE UNDER SECTION THREE HUNDRED FIFTY OF THE
ECONOMIC DEVELOPMENT  LAW.  THE  AMOUNT  OF  SUCH  CREDIT  SHALL  BE  AS
PRESCRIBED  IN  PARAGRAPH  (D) OF THIS SUBDIVISION. SUCH CREDIT SHALL BE
AVAILABLE FOR FIVE SUCCESSIVE YEARS COMMENCING WITH THE  YEAR  IN  WHICH
THE  TAXPAYER  HAS NET NEW EMPLOYEES AS DEFINED IN SECTION THREE HUNDRED
FIFTY-ONE OF THE ECONOMIC DEVELOPMENT LAW FOR MORE THAN HALF THE TAXPAY-
ER'S FISCAL YEAR.
  (B) FOR THE PURPOSES OF THIS SUBDIVISION, THE  FOLLOWING  TERMS  SHALL
HAVE THE FOLLOWING MEANINGS:
  (1)  "ELIGIBLE  WAGES" MEANS WAGES PAID BY THE TAXPAYER FOR EMPLOYMENT
DURING THE TAXABLE YEAR, AT LOCATIONS OF AN  ELIGIBLE  HIGH-TECH  ENTER-
PRISE'S  OPERATIONS  IDENTIFIED TO THE COMMISSIONER OF ECONOMIC DEVELOP-
MENT IN ITS APPLICATION TO BE TREATED AS AN  ELIGIBLE  HIGH-TECH  ENTER-
PRISE.
  (2)  "TARGETED EMPLOYEE" MEANS A NEW YORK RESIDENT WHO RECEIVES ELIGI-
BLE WAGES AND WHO IS (I) AN ELIGIBLE INDIVIDUAL UNDER THE PROVISIONS  OF
THE  TARGETED JOBS TAX CREDIT (SECTION FIFTY-ONE OF THE INTERNAL REVENUE
CODE), (II) ELIGIBLE FOR BENEFITS UNDER THE PROVISIONS OF THE  WORKFORCE
INVESTMENT  ACT  AS  A  DISLOCATED WORKER OR LOW-INCOME INDIVIDUAL (P.L.
105-220, AS AMENDED), (III) A RECIPIENT OF PUBLIC  ASSISTANCE  BENEFITS,
(IV)  AN  INDIVIDUAL WHOSE INCOME IS BELOW THE MOST RECENTLY ESTABLISHED
POVERTY RATE PROMULGATED BY THE UNITED STATES DEPARTMENT OF COMMERCE, OR
A MEMBER OF A FAMILY WHOSE FAMILY INCOME  IS  BELOW  THE  MOST  RECENTLY
ESTABLISHED  POVERTY  RATE PROMULGATED BY THE APPROPRIATE FEDERAL AGENCY
OR (V) AN HONORABLY DISCHARGED MEMBER OF ANY BRANCH OF THE ARMED  FORCES
OF THE UNITED STATES. AN INDIVIDUAL WHO SATISFIES THE CRITERIA SET FORTH
IN  CLAUSE  (I),  (II),  (IV) OR (V) OF THIS SUBPARAGRAPH AT THE TIME OF
INITIAL EMPLOYMENT IN THE JOB  WITH  RESPECT  TO  WHICH  THE  CREDIT  IS
CLAIMED,  OR  WHO  SATISFIES  THE CRITERION SET FORTH IN CLAUSE (III) OF
THIS SUBPARAGRAPH AT SUCH TIME OR AT ANY TIME WITHIN  THE  PREVIOUS  TWO
YEARS, SHALL BE A TARGETED EMPLOYEE SO LONG AS SUCH INDIVIDUAL CONTINUES
TO RECEIVE ELIGIBLE WAGES.
  (3)  "AVERAGE  NUMBER  OF  INDIVIDUALS  EMPLOYED  FULL-TIME"  SHALL BE
COMPUTED BY ASCERTAINING THE NUMBER OF SUCH INDIVIDUALS EMPLOYED BY  THE
TAXPAYER  ON  THE  THIRTY-FIRST DAY OF MARCH, THE THIRTIETH DAY OF JUNE,
THE THIRTIETH DAY OF SEPTEMBER AND  THE  THIRTY-FIRST  DAY  OF  DECEMBER
DURING  EACH TAXABLE YEAR OR OTHER APPLICABLE PERIOD, BY ADDING TOGETHER
THE NUMBER OF SUCH INDIVIDUALS ASCERTAINED ON EACH  OF  SUCH  DATES  AND
DIVIDING THE SUM SO OBTAINED BY THE NUMBER OF SUCH DATES OCCURRING WITH-
IN SUCH TAXABLE YEAR OR OTHER APPLICABLE PERIOD.

S. 6995                            13

  (C)  THE  AMOUNT OF THE CREDIT SHALL EQUAL THE SUM OF: (1) THE PRODUCT
OF THREE THOUSAND DOLLARS AND THE AVERAGE NUMBER OF INDIVIDUALS EMPLOYED
FULL-TIME BY THE  TAXPAYER,  COMPUTED  PURSUANT  TO  THE  PROVISIONS  OF
SUBPARAGRAPH  THREE  OF  PARAGRAPH  (B)  OF  THIS  SUBDIVISION,  WHO (I)
RECEIVED  ELIGIBLE  WAGES  FOR  MORE THAN HALF OF THE TAXABLE YEAR, (II)
RECEIVED WITH RESPECT TO MORE THAN HALF OF THE PERIOD OF  EMPLOYMENT  BY
THE  TAXPAYER DURING THE TAXABLE YEAR, AN HOURLY WAGE WHICH WAS AT LEAST
ONE HUNDRED THIRTY-FIVE PERCENT OF THE MINIMUM WAGE SPECIFIED IN SECTION
SIX HUNDRED FIFTY-TWO OF THE LABOR LAW, (III)  ARE  TARGETED  EMPLOYEES,
AND  (IV)  ARE HIRED AFTER THE TEST DATE; AND (2) THE PRODUCT OF FIFTEEN
HUNDRED DOLLARS AND THE AVERAGE NUMBER OF INDIVIDUALS  (EXCLUDING  INDI-
VIDUALS  DESCRIBED IN SUBPARAGRAPH ONE OF THIS PARAGRAPH) EMPLOYED FULL-
TIME BY THE TAXPAYER AND HIRED AFTER THE TEST DATE, COMPUTED PURSUANT TO
THE PROVISIONS OF SUBPARAGRAPH THREE OF PARAGRAPH (B) OF  THIS  SUBDIVI-
SION,  WHO  RECEIVED  ELIGIBLE  WAGES  FOR MORE THAN HALF OF THE TAXABLE
YEAR.  PROVIDED, FURTHER, HOWEVER, THAT THE CREDIT PROVIDED FOR IN  THIS
SUBDIVISION  WITH  RESPECT  TO  THE TAXABLE YEAR, AND CARRYOVERS OF SUCH
CREDIT TO THE TAXABLE YEAR, DEDUCTED FROM THE  TAX  OTHERWISE  DUE,  MAY
NOT,  IN  THE  AGGREGATE,  EXCEED FIFTY PERCENT OF THE TAX IMPOSED UNDER
SECTION SIX HUNDRED ONE OF THIS CHAPTER COMPUTED WITHOUT REGARD  TO  ANY
CREDIT PROVIDED FOR UNDER THIS ARTICLE.
  (D)  FOR PURPOSES OF CALCULATING THE AMOUNT OF THE CREDIT, INDIVIDUALS
EMPLOYED WITHIN THE STATE WITHIN THE IMMEDIATELY PRECEDING SIXTY  MONTHS
BY  A  RELATED  PERSON,  AS  SUCH TERM IS DEFINED IN SUBPARAGRAPH (C) OF
PARAGRAPH THREE OF SUBSECTION (B) OF SECTION FOUR HUNDRED SIXTY-FIVE  OF
THE  INTERNAL  REVENUE CODE, SHALL NOT BE INCLUDED IN THE AVERAGE NUMBER
OF INDIVIDUALS DESCRIBED IN SUBPARAGRAPH  ONE  OR  SUBPARAGRAPH  TWO  OF
PARAGRAPH  (C) OF THIS SUBDIVISION, UNLESS SUCH RELATED PERSON WAS NEVER
ALLOWED A CREDIT UNDER THIS SUBDIVISION WITH RESPECT TO SUCH  EMPLOYEES.
FOR  PURPOSES  OF THIS SUBPARAGRAPH, A "RELATED PERSON" SHALL INCLUDE AN
ENTITY WHICH WOULD HAVE QUALIFIED AS A "RELATED PERSON" TO THE  TAXPAYER
IF  IT HAD NOT BEEN DISSOLVED, LIQUIDATED, MERGED WITH ANOTHER ENTITY OR
OTHERWISE CEASED TO EXIST OR OPERATE.
  (E) THE DOLLAR AMOUNTS SPECIFIED UNDER  SUBPARAGRAPH  ONE  OR  TWO  OF
PARAGRAPH  (C)  OF  THIS  SUBDIVISION SHALL BE INCREASED BY FIVE HUNDRED
DOLLARS FOR EACH  QUALIFYING  INDIVIDUAL  UNDER  SUCH  SUBPARAGRAPH  WHO
RECEIVED,  DURING  THE  TAXABLE  YEAR, WAGES IN EXCESS OF FORTY THOUSAND
DOLLARS.
  (F) IF THE AMOUNT OF THE CREDIT AND CARRYOVERS OF SUCH CREDIT  ALLOWED
UNDER  THIS SECTION FOR ANY TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S TAX
FOR SUCH YEAR, THE EXCESS, AS WELL AS ANY PART OF THE CREDIT  OR  CARRY-
OVERS  OF  SUCH  CREDIT, OR BOTH, WHICH MAY NOT BE DEDUCTED FROM THE TAX
OTHERWISE DUE BY REASON OF THE FINAL SENTENCE IN 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. IN  LIEU  OF
CARRYING  OVER  ANY  SUCH EXCESS, A TAXPAYER MAY, AT HIS OPTION, RECEIVE
FIFTY PERCENT OF SUCH EXCESS AS A REFUND. 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.
  S 6. Section 606 of the tax law is amended by adding a new  subsection
(k-1) to read as follows:
  (K-1)  INNOVATION  TECHNOLOGY 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 APPROVED AS AN
ELIGIBLE HIGH-TECH ENTERPRISE UNDER SECTION THREE HUNDRED FIFTY  OF  THE

S. 6995                            14

ECONOMIC  DEVELOPMENT  LAW.  THE  AMOUNT  OF  SUCH  CREDIT  SHALL  BE AS
PRESCRIBED IN PARAGRAPH TWO OF THIS SUBSECTION.  SUCH  CREDIT  SHALL  BE
AVAILABLE  FOR  FIVE  SUCCESSIVE YEARS COMMENCING WITH THE YEAR IN WHICH
THE  TAXPAYER  HAS  EMPLOYEES  FOR  MORE THAN HALF THE TAXPAYER'S FISCAL
YEAR.
  (2) FOR THE PURPOSES OF THIS SUBSECTION,  THE  FOLLOWING  TERMS  SHALL
HAVE THE FOLLOWING MEANINGS:
  (A)  "ELIGIBLE  WAGES" MEANS WAGES PAID BY THE TAXPAYER FOR EMPLOYMENT
DURING THE TAXABLE YEAR, AT LOCATIONS OF AN  ELIGIBLE  HIGH-TECH  ENTER-
PRISE'S  OPERATIONS  IDENTIFIED TO THE COMMISSIONER OF ECONOMIC DEVELOP-
MENT IN ITS APPLICATION TO BE TREATED AS AN  ELIGIBLE  HIGH-TECH  ENTER-
PRISE.
  (B)  "TARGETED EMPLOYEE" MEANS A NEW YORK RESIDENT WHO RECEIVES ELIGI-
BLE WAGES AND WHO IS (I) AN ELIGIBLE INDIVIDUAL UNDER THE PROVISIONS  OF
THE  TARGETED JOBS TAX CREDIT (SECTION FIFTY-ONE OF THE INTERNAL REVENUE
CODE), (II) ELIGIBLE FOR BENEFITS UNDER THE PROVISIONS OF THE  WORKFORCE
INVESTMENT  ACT  AS  A  DISLOCATED WORKER OR LOW-INCOME INDIVIDUAL (P.L.
105-220, AS AMENDED), (III) A RECIPIENT OF PUBLIC  ASSISTANCE  BENEFITS,
(IV)  AN  INDIVIDUAL WHOSE INCOME IS BELOW THE MOST RECENTLY ESTABLISHED
POVERTY RATE PROMULGATED BY THE UNITED STATES DEPARTMENT OF COMMERCE, OR
A MEMBER OF A FAMILY WHOSE FAMILY INCOME  IS  BELOW  THE  MOST  RECENTLY
ESTABLISHED  POVERTY  RATE PROMULGATED BY THE APPROPRIATE FEDERAL AGENCY
OR (V) AN HONORABLY DISCHARGED MEMBER OF ANY BRANCH OF THE ARMED  FORCES
OF THE UNITED STATES. AN INDIVIDUAL WHO SATISFIES THE CRITERIA SET FORTH
IN  CLAUSE  (I),  (II),  (IV) OR (V) OF THIS SUBPARAGRAPH AT THE TIME OF
INITIAL EMPLOYMENT IN THE JOB  WITH  RESPECT  TO  WHICH  THE  CREDIT  IS
CLAIMED,  OR  WHO  SATISFIES  THE CRITERION SET FORTH IN CLAUSE (III) OF
THIS SUBPARAGRAPH AT SUCH TIME OR AT ANY TIME WITHIN  THE  PREVIOUS  TWO
YEARS, SHALL BE A TARGETED EMPLOYEE SO LONG AS SUCH INDIVIDUAL CONTINUES
TO RECEIVE ELIGIBLE WAGES.
  (C)  "AVERAGE  NUMBER  OF  INDIVIDUALS  EMPLOYED  FULL-TIME"  SHALL BE
COMPUTED BY ASCERTAINING THE NUMBER OF SUCH INDIVIDUALS EMPLOYED BY  THE
TAXPAYER  ON  THE  THIRTY-FIRST DAY OF MARCH, THE THIRTIETH DAY OF JUNE,
THE THIRTIETH DAY OF SEPTEMBER AND  THE  THIRTY-FIRST  DAY  OF  DECEMBER
DURING  EACH TAXABLE YEAR OR OTHER APPLICABLE PERIOD, BY ADDING TOGETHER
THE NUMBER OF SUCH INDIVIDUALS ASCERTAINED ON EACH  OF  SUCH  DATES  AND
DIVIDING THE SUM SO OBTAINED BY THE NUMBER OF SUCH DATES OCCURRING WITH-
IN SUCH TAXABLE YEAR OR OTHER APPLICABLE PERIOD.
  (3)  THE  AMOUNT OF THE CREDIT SHALL EQUAL THE SUM OF: (A) THE PRODUCT
OF THREE THOUSAND DOLLARS AND THE AVERAGE NUMBER OF INDIVIDUALS EMPLOYED
FULL-TIME BY THE  TAXPAYER,  COMPUTED  PURSUANT  TO  THE  PROVISIONS  OF
SUBPARAGRAPH  (C)  OF PARAGRAPH TWO OF THIS SUBSECTION, WHO (I) RECEIVED
ELIGIBLE WAGES FOR MORE THAN HALF OF THE  TAXABLE  YEAR,  (II)  RECEIVED
WITH  RESPECT  TO  MORE  THAN  HALF  OF  THE PERIOD OF EMPLOYMENT BY THE
TAXPAYER DURING THE TAXABLE YEAR, AN HOURLY WAGE WHICH WAS AT LEAST  ONE
HUNDRED THIRTY-FIVE PERCENT OF THE MINIMUM WAGE SPECIFIED IN SECTION SIX
HUNDRED  FIFTY-TWO  OF  THE LABOR LAW, AND (III) ARE TARGETED EMPLOYEES;
AND (B) THE PRODUCT OF FIFTEEN HUNDRED DOLLARS AND THE AVERAGE NUMBER OF
INDIVIDUALS (EXCLUDING INDIVIDUALS DESCRIBED IN SUBPARAGRAPH (A) OF THIS
PARAGRAPH) EMPLOYED FULL-TIME BY THE TAXPAYER, COMPUTED PURSUANT TO  THE
PROVISIONS  OF SUBPARAGRAPH (C) OF PARAGRAPH TWO OF THIS SUBSECTION, WHO
RECEIVED ELIGIBLE  WAGES  FOR  MORE  THAN  HALF  OF  THE  TAXABLE  YEAR.
PROVIDED,  FURTHER,  HOWEVER,  THAT  THE  CREDIT  PROVIDED  FOR  IN THIS
SUBSECTION WITH RESPECT TO THE TAXABLE  YEAR,  AND  CARRYOVERS  OF  SUCH
CREDIT  TO  THE  TAXABLE  YEAR, DEDUCTED FROM THE TAX OTHERWISE DUE, MAY
NOT, IN THE AGGREGATE, EXCEED FIFTY PERCENT OF  THE  TAX  IMPOSED  UNDER

S. 6995                            15

SECTION  SIX  HUNDRED  ONE  OF  THIS PART COMPUTED WITHOUT REGARD TO ANY
CREDIT PROVIDED FOR UNDER THIS ARTICLE.
  (4)  FOR PURPOSES OF CALCULATING THE AMOUNT OF THE CREDIT, INDIVIDUALS
EMPLOYED WITHIN THE STATE WITHIN THE IMMEDIATELY PRECEDING SIXTY  MONTHS
BY  A  RELATED  PERSON,  AS  SUCH TERM IS DEFINED IN SUBPARAGRAPH (C) OF
PARAGRAPH THREE OF SUBSECTION (B) OF SECTION FOUR HUNDRED SIXTY-FIVE  OF
THE  INTERNAL  REVENUE CODE, SHALL NOT BE INCLUDED IN THE AVERAGE NUMBER
OF INDIVIDUALS DESCRIBED IN SUBPARAGRAPH (C) OF PARAGRAPH  TWO  OF  THIS
SUBSECTION,  UNLESS SUCH RELATED PERSON WAS NEVER ALLOWED A CREDIT UNDER
THIS SUBSECTION WITH RESPECT TO SUCH EMPLOYEES.  FOR  PURPOSES  OF  THIS
SUBPARAGRAPH,  A  "RELATED  PERSON"  SHALL INCLUDE AN ENTITY WHICH WOULD
HAVE QUALIFIED AS A "RELATED PERSON" TO THE TAXPAYER IF IT HAD NOT  BEEN
DISSOLVED, LIQUIDATED, MERGED WITH ANOTHER ENTITY OR OTHERWISE CEASED TO
EXIST OR OPERATE.
  (5)  THE  DOLLAR  AMOUNTS  SPECIFIED  UNDER SUBPARAGRAPH (A) OR (B) OF
PARAGRAPH THREE OF THIS SUBSECTION SHALL BE INCREASED  BY  FIVE  HUNDRED
DOLLARS  FOR  EACH  QUALIFYING  INDIVIDUAL  UNDER  SUCH SUBPARAGRAPH WHO
RECEIVED, DURING THE TAXABLE YEAR, WAGES IN  EXCESS  OF  FORTY  THOUSAND
DOLLARS.
  (6)  IF THE AMOUNT OF THE CREDIT AND CARRYOVERS OF SUCH CREDIT ALLOWED
UNDER THIS SECTION FOR ANY TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S  TAX
FOR  SUCH  YEAR, THE EXCESS, AS WELL AS ANY PART OF THE CREDIT OR CARRY-
OVERS OF SUCH CREDIT, OR BOTH, WHICH MAY NOT BE DEDUCTED  FROM  THE  TAX
OTHERWISE DUE BY REASON OF THE FINAL SENTENCE IN PARAGRAPH THREE 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. IN  LIEU  OF
CARRYING  OVER  ANY  SUCH EXCESS, A TAXPAYER MAY, AT HIS OPTION, RECEIVE
FIFTY PERCENT OF SUCH EXCESS AS A REFUND. 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 ARTICLE, PROVIDED,
HOWEVER, THAT NO INTEREST SHALL BE PAID THEREON.
  S 7. Section 606  of  the  tax  law  is  amended  by  adding  two  new
subsections (bb-1) and (cc-1) to read as follows:
  (BB-1)  INNOVATION  TECHNOLOGY  CREDIT  FOR  REAL  PROPERTY TAXES. (1)
ALLOWANCE OF CREDIT. A TAXPAYER WHICH IS AN  ELIGIBLE  HIGH-TECH  ENTER-
PRISE AS DEFINED IN SECTION THREE HUNDRED FIFTY OF THE ECONOMIC DEVELOP-
MENT  LAW, OR WHICH IS A SOLE PROPRIETOR OF AN ELIGIBLE HIGH-TECH ENTER-
PRISE OR A MEMBER OF  A  PARTNERSHIP  WHICH  IS  AN  ELIGIBLE  HIGH-TECH
ENTERPRISE,  SHALL BE ALLOWED A CREDIT FOR ELIGIBLE REAL PROPERTY TAXES,
TO BE COMPUTED AS PROVIDED IN  SECTION  THIRTY-THREE  OF  THIS  CHAPTER,
AGAINST THE TAX IMPOSED BY THIS ARTICLE.
  (2)  APPLICATION  OF CREDIT. IF THE AMOUNT OF THE CREDIT ALLOWED UNDER
THIS SUBSECTION FOR ANY TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S TAX FOR
SUCH YEAR, THE EXCESS SHALL BE TREATED AS AN OVERPAYMENT OF  TAX  TO  BE
CREDITED  OR  REFUNDED  IN ACCORDANCE WITH THE PROVISIONS OF SECTION SIX
HUNDRED EIGHTY-SIX OF THIS ARTICLE, PROVIDED, HOWEVER, THAT NO  INTEREST
SHALL BE PAID THEREON.
  (CC-1)  INNOVATION TECHNOLOGY TAX REDUCTION CREDIT. ALLOWANCE OF CRED-
IT. A TAXPAYER WHICH IS AN ELIGIBLE HIGH-TECH ENTERPRISE AS  DEFINED  IN
SECTION THREE HUNDRED FIFTY OF THE ECONOMIC DEVELOPMENT LAW, OR WHICH IS
A  SOLE  PROPRIETOR  OF A ELIGIBLE HIGH-TECH ENTERPRISE OR A MEMBER OF A
PARTNERSHIP WHICH IS AN ELIGIBLE HIGH-TECH ENTERPRISE, SHALL BE  ALLOWED
AN INNOVATION TECHNOLOGY TAX REDUCTION CREDIT AGAINST THE TAX IMPOSED BY
SUBSECTIONS (A) THROUGH (E) OF SECTION SIX HUNDRED ONE OF THIS PART.
  S  8. Section 210 of the tax law is amended by adding two new subdivi-
sions 27-a and 28-a to read as follows:

S. 6995                            16

  27-A. INNOVATION TECHNOLOGY CREDIT FOR REAL PROPERTY TAXES. (A) ALLOW-
ANCE OF CREDIT. A TAXPAYER WHICH IS AN ELIGIBLE HIGH-TECH ENTERPRISE  AS
DEFINED  IN  SECTION THREE HUNDRED FIFTY OF THE ECONOMIC DEVELOPMENT LAW
SHALL BE ALLOWED A CREDIT  FOR  ELIGIBLE  REAL  PROPERTY  TAXES,  TO  BE
COMPUTED  AS  PROVIDED  IN SECTION THIRTY-THREE OF THIS CHAPTER, AGAINST
THE TAX IMPOSED BY THIS ARTICLE.
  (B) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER  THIS  SUBDIVISION
FOR  ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS
THAN THE HIGHER OF THE AMOUNTS PRESCRIBED IN PARAGRAPHS (C) AND  (D)  OF
SUBDIVISION  ONE  OF  THIS  SECTION.  HOWEVER,  IF  THE AMOUNT OF CREDIT
ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE  TAX  TO
SUCH  AMOUNT,  ANY  AMOUNT OF CREDIT THUS NOT DEDUCTIBLE IN SUCH TAXABLE
YEAR SHALL BE TREATED AS  AN  OVERPAYMENT  OF  TAX  TO  BE  CREDITED  OR
REFUNDED  IN  ACCORDANCE  WITH  THE  PROVISIONS  OF SECTION ONE THOUSAND
EIGHTY-SIX  OF  THIS  CHAPTER.  PROVIDED,  HOWEVER,  THE  PROVISIONS  OF
SUBSECTION  (C)  OF  SECTION  ONE  THOUSAND EIGHTY-EIGHT OF THIS CHAPTER
NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
  28-A. INNOVATION TECHNOLOGY TAX REDUCTION  CREDIT.  (A)  ALLOWANCE  OF
CREDIT.  A TAXPAYER WHICH IS AN ELIGIBLE HIGH-TECH ENTERPRISE AS DEFINED
IN SECTION THREE HUNDRED FIFTY OF THE ECONOMIC DEVELOPMENT LAW SHALL  BE
ALLOWED AN INNOVATION TECHNOLOGY TAX REDUCTION CREDIT, TO BE COMPUTED AS
PROVIDED IN SECTION THIRTY-FOUR OF THIS CHAPTER, AGAINST THE TAX IMPOSED
BY THIS ARTICLE.
  (B)  APPLICATION  OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION
FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO  LESS
THAN  THE  AMOUNT PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION ONE OF THIS
SECTION.
  S 9. Subparagraph (B) of paragraph 1 of subsection (i) of section  606
of  the  tax  law is amended by adding three new clauses (xxxi), (xxxii)
and (xxxiii) to read as follows:

(XXXI) INNOVATION TECHNOLOGY WAGE    ELIGIBLE WAGES UNDER SUBDIVISION
TAX CREDIT UNDER SUBSECTION (K-1)    NINETEEN-A OF SECTION TWO HUNDRED
                                     TEN

(XXXII) INNOVATION TECHNOLOGY CREDIT AMOUNT OF CREDIT UNDER SUBDIVISION
FOR REAL PROPERTY TAXES UNDER        TWENTY-SEVEN-A OF SECTION TWO
SUBSECTION (BB-1)                    HUNDRED TEN

(XXXIII) INNOVATION TECHNOLOGY TAX   AMOUNT OF BENEFIT UNDER SUBDIVISION
REDUCTION CREDIT UNDER SUBSECTION    TWENTY-EIGHT-A OF SECTION TWO
(CC-1)                               HUNDRED TEN
  S 10. This act shall take effect immediately.