Assembly Bill A4860

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

                                  4860

                       2011-2012 Regular Sessions

                          I N  A S S E M B L Y

                            February 8, 2011
                               ___________

Introduced by M. of A. BUTLER -- read once and referred to the Committee
  on Ways and Means

AN  ACT  to amend the general municipal law, in relation to the creation
  of research and development centers; to amend the tax law, in relation
  to providing tax credits and benefits  for  research  and  development
  enterprises,  qualified research production facilities; and to provide
  a research and development wage, expense and grant tax  credit  and  a
  certified research and development enterprise credit for real property
  taxes

  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 "research and development centers program".
  S  2.  Section 957 of the general municipal law is amended by adding a
new subdivision (u) to read as follows:
  (U) "RESEARCH AND DEVELOPMENT CENTER" SHALL MEAN AN  AREA  WITHIN  THE
STATE  THAT  HAS  BEEN  DESIGNATED  AS A RESEARCH AND DEVELOPMENT CENTER
PURSUANT TO THIS ARTICLE.
  S 3. Section 960 of the general municipal law is amended by  adding  a
new subdivision (f) to read as follows:
  (F) THE EMPIRE ZONE BOARD SHALL DETERMINE THE ACTUAL GEOGRAPHIC BOUND-
ARIES  OF  RESEARCH  AND  DEVELOPMENT CENTERS AFTER A REVIEW OF PROPOSED
BOUNDARIES MADE BY RESOLUTION OF THE LEGISLATIVE BODY OF THE  COUNTY  IN
WHICH A DESIGNATED RESEARCH AND DEVELOPMENT CENTER IS LOCATED, OR BY THE
CITY COUNCIL IN THE CASE OF THE CITY OF NEW YORK.
  S  4. Article 18-B of the general municipal law is amended by adding a
new section 970 to read as follows:
  S 970. RESEARCH AND DEVELOPMENT CENTERS. (A) CREATION OF RESEARCH  AND
DEVELOPMENT  CENTERS.  THE  RESEARCH  AND  DEVELOPMENT CENTER PROGRAM IS
HEREBY CREATED TO FOSTER PHYSICAL, ENGINEERING AND BIOLOGICAL RESEARCH.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD08436-01-1

              

A. 4860                             2

  (B) PURPOSE. FOR THE PURPOSE OF THIS PROGRAM, A RESEARCH AND  DEVELOP-
MENT ESTABLISHMENT SHALL MEAN AN ESTABLISHMENT LOCATED IN NEW YORK STATE
PRIMARILY ENGAGED IN CONDUCTING RESEARCH AND EXPERIMENTAL DEVELOPMENT IN
THE PHYSICAL, ENGINEERING, AND LIFE SCIENCES, SUCH AS AGRICULTURE, ELEC-
TRONICS, ENVIRONMENTAL, BIOLOGY, BOTANY, BIOTECHNOLOGY, COMPUTERS, CHEM-
ISTRY, FOOD, FISHERIES, FORESTS, GEOLOGY, HEALTH, MATHEMATICS, MEDICINE,
OCEANOGRAPHY, PHARMACY, PHYSICS, VETERINARY, AND OTHER ALLIED SUBJECTS.
  (C) RESPONSIBILITIES OF THE COMMISSIONER. THE COMMISSIONER SHALL:
  (1)  AFTER  CONSULTATION  WITH THE DIRECTOR OF THE BUDGET, THE COMMIS-
SIONER OF LABOR, AND THE COMMISSIONER OF TAXATION AND  FINANCE,  PROMUL-
GATE  REGULATIONS  GOVERNING  (I) THE JOINT CERTIFICATION BY THE COMMIS-
SIONER AND THE COMMISSIONER  OF  LABOR,  AS  TO  THE  ELIGIBILITY  OF  A
BUSINESS  ENTERPRISE  FOR  BENEFITS SET FORTH IN SUBDIVISION (E) OF THIS
SECTION, PROVIDED, HOWEVER, THAT A BUSINESS ENTERPRISE THAT HAS  SHIFTED
ITS  OPERATIONS,  OR  SOME PORTION THEREOF, FROM AN AREA WITHIN NEW YORK
STATE NOT DESIGNATED AS A RESEARCH AND DEVELOPMENT CENTER TO AN AREA  SO
DESIGNATED SHALL NOT BE CERTIFIED TO RECEIVE SUCH BENEFITS, EXCEPT WHERE
SUCH  SHIFT IN OPERATIONS IS FROM A BUSINESS INCUBATOR FACILITY OPERATED
BY A MUNICIPALITY OR BY A PUBLIC OR PRIVATE NOT-FOR-PROFIT ENTITY  WHICH
PROVIDES SPACE AND BUSINESS SUPPORT SERVICES TO NEWLY ESTABLISHED FIRMS;
AND  (II)  THE JOINT REVOCATION BY THE COMMISSIONER AND THE COMMISSIONER
OF LABOR OF A CERTIFICATE TO RECEIVE BENEFITS SET FORTH  IN  SUBDIVISION
(E)  OF  THIS  SECTION  UPON A FINDING THAT (I) SUCH BUSINESS ENTERPRISE
MADE MATERIAL MISREPRESENTATION OF  THE  FACT  ON  ITS  APPLICATION  FOR
CERTIFICATION,  OR  SUCH BUSINESS ENTERPRISE FAILED TO DISCLOSE FACTS IN
ITS APPLICATION FOR CERTIFICATION CONSTITUTING GROUNDS FOR  REFUSING  TO
ISSUE   CERTIFICATION;  (II)  THE  BUSINESS  ENTERPRISE  HAS  FAILED  TO
CONSTRUCT, EXPAND, REHABILITATE OR OPERATE ITS FACILITY SUBSTANTIALLY IN
ACCORDANCE WITH THE REPRESENTATIONS CONTAINED  IN  ITS  APPLICATION  FOR
CERTIFICATION;  (III)  THE  BUSINESS ENTERPRISE HAS FAILED TO CREATE NEW
EMPLOYMENT OR PREVENT A LOSS OF EMPLOYMENT IN THE  APPROPRIATE  RESEARCH
AND  DEVELOPMENT CENTER PROVIDED, HOWEVER, THAT SUCH FAILURE WAS NOT DUE
TO ECONOMIC CIRCUMSTANCES OR CONDITIONS WHICH SUCH  BUSINESS  COULD  NOT
ANTICIPATE OR WHICH WERE BEYOND ITS CONTROL; WHERE APPLICABLE, THE BUSI-
NESS  HAS  FAILED  TO  SUBMIT  AN ANNUAL REPORT AFTER IT HAS APPLIED FOR
CENTER INCENTIVES OR PROGRAM ASSISTANCE BASED ON NEW  HIRES  OR  INVEST-
MENT.  REVOCATION OF SUCH CERTIFICATE SHALL BECOME EFFECTIVE ON THE DATE
DETERMINED TO BE THE EARLIEST EVENT CONSTITUTING  GROUNDS  FOR  REVOKING
SUCH  CERTIFICATE.  THE  COMMISSIONER  SHALL  NOTIFY THE COMMISSIONER OF
TAXATION AND FINANCE THAT SUCH DECERTIFICATION HAS  OCCURRED,  AND  SUCH
NOTIFICATION  SHALL  INCLUDE  THE EFFECTIVE DATE OF SUCH DECERTIFICATION
AND THE CENTER TO WHICH DECERTIFICATION APPLIES;
  (2) ESTABLISH A PRIORITY FOR THE  ALLOCATION  OF  AUTHORITY  TO  ISSUE
PRIVATE  ACTIVITY  BONDS  FOR THE BENEFIT OF MUNICIPALITIES AND BUSINESS
ENTERPRISES LOCATED OR TO BE LOCATED WITHIN A RESEARCH  AND  DEVELOPMENT
CENTER;
  (3)  COORDINATE THE RESEARCH AND DEVELOPMENT CENTER PROGRAM WITH STATE
AGENCIES AND AUTHORITIES, THE PROVISION OF BUSINESS DEVELOPMENT PROGRAMS
AND SERVICES FOR EACH RESEARCH AND DEVELOPMENT CENTER IN ORDER TO STIMU-
LATE THE CREATION AND DEVELOPMENT OF NEW BUSINESSES AND MAY REQUEST  AND
SHALL  RECEIVE FROM ANY DEPARTMENT, DIVISION, BOARD, BUREAU, COMMISSION,
AGENCY OR PUBLIC AUTHORITY OF THE STATE SUCH ASSISTANCE AS MAY BE NECES-
SARY; AND
  (4) RECOMMEND FOR LOAN AND GRANT PROGRAMS OF THE DEPARTMENT OF ECONOM-
IC DEVELOPMENT AND THE URBAN DEVELOPMENT CORPORATION, SPECIAL TERMS  AND
CONDITIONS FOR VIABLE CENTER PROJECTS AND PROGRAMS.

A. 4860                             3

  (D) DESIGNATION OF RESEARCH AND DEVELOPMENT CENTERS. (1) THE FOLLOWING
SEVEN  RESEARCH  AND  DEVELOPMENT  CENTERS  ARE  HEREBY DESIGNATED. EACH
CENTER SHALL NOT EXCEED A TOTAL OF  FOUR  SQUARE  MILES  IN  AREA.  EACH
CENTER  MUST  BE LOCATED WITHIN THE GEOGRAPHIC BOUNDARIES OF THE FOLLOW-
ING:
  (I) ERIE COUNTY,
  (II) MONROE COUNTY,
  (III) ONONDAGA COUNTY,
  (IV)  ALBANY  COUNTY,  PROVIDED HOWEVER, UP TO TWO SQUARE MILES MAY BE
LOCATED IN RENSSELAER COUNTY,
  (V) BROOME COUNTY, PROVIDED HOWEVER, UP TO  ONE  SQUARE  MILE  MAY  BE
LOCATED IN TIOGA COUNTY,
  (VI) THE CITY OF NEW YORK,
  (VII) NASSAU COUNTY AND SUFFOLK COUNTY, PROVIDED THAT NO MORE THAN TWO
SQUARE MILES ARE LOCATED IN EITHER COUNTY.
  (2)  EACH  CENTER  MAY  CONTAIN NON-CONTIGUOUS AREAS, PROVIDED THAT AT
LEAST ONE CONTIGUOUS AREA IS AT LEAST ONE SQUARE MILE AND TWO CONTIGUOUS
AREAS ARE AT LEAST ONE HALF OF ONE SQUARE MILE EACH.
  (E) SPECIAL PROVISIONS RELATING TO RESEARCH AND  DEVELOPMENT  CENTERS.
IN  ADDITION  TO THE BENEFITS PROVIDED IN THIS SECTION, ADDITIONAL BENE-
FITS APPLICABLE TO RESEARCH AND DEVELOPMENT CENTERS SHALL BE PROVIDED AS
FOLLOWS:
  (1) A REFUND OR CREDIT FOR INCREASES IN EMPLOYMENT AGAINST  THE  TAXES
IMPOSED UNDER ARTICLE NINE-A OR ARTICLE TWENTY-TWO OF THE TAX LAW PURSU-
ANT TO SECTION TWENTY-FIVE-A OF THE TAX LAW;
  (2)  A  CREDIT FOR RESEARCH AND DEVELOPMENT EXPENSES AGAINST THE TAXES
IMPOSED UNDER ARTICLE NINE-A OR ARTICLE TWENTY-TWO OF THE TAX LAW PURSU-
ANT TO SECTION TWENTY-FIVE-B OF THE TAX LAW;
  (3) A REFUND OR CREDIT FOR RESEARCH AND DEVELOPMENT GRANTS AGAINST THE
TAXES IMPOSED UNDER ARTICLE NINE-A OR ARTICLE TWENTY-TWO OF THE TAX  LAW
PURSUANT TO SECTION TWENTY-FIVE-C OF THE TAX LAW;
  (4)  A  REFUND  OR  CREDIT  FOR  REAL PROPERTY TAXES AGAINST THE TAXES
IMPOSED UNDER ARTICLE NINE-A OR ARTICLE TWENTY-TWO OF THE TAX LAW PURSU-
ANT TO SECTION TWENTY-FIVE-D OF THE TAX LAW;
  (5) TAX BENEFITS PROVIDED UNDER THE EMPIRE ZONE PROGRAM;
  (6) AN INCREASE IN THE RATE OF THE INVESTMENT TAX CREDIT;
  (7) AN EXCLUSION OF INCOME FOR QUALIFIED  RESEARCH  SERVICES  FOR  THE
PURPOSE  OF  THE  CALCULATION  OF  TAXES IMPOSED UNDER ARTICLE NINE-A OR
ARTICLE TWENTY-TWO OF THE TAX LAW;
  (8) AN EXCLUSION OF INCOME FOR  QUALIFIED  ROYALTY  PAYMENTS  FOR  THE
PURPOSE  OF  THE  CALCULATION  OF  TAXES IMPOSED UNDER ARTICLE NINE-A OR
ARTICLE TWENTY-TWO OF THE TAX LAW.
  (F) TERMINATION OR REVISION OF A RESEARCH AND DEVELOPMENT CENTER.  (1)
EXCEPT  AS  PROVIDED  IN  THIS  SECTION, ANY DESIGNATION OF AN AREA AS A
RESEARCH AND DEVELOPMENT ZONE SHALL REMAIN IN EFFECT DURING  THE  PERIOD
BEGINNING  ON  THE DATE OF DESIGNATION AND ENDING DECEMBER THIRTY-FIRST,
TWO THOUSAND THIRTY-ONE.
  (2) THE LEGISLATIVE BODY OF THE COUNTY IN WHICH A DESIGNATED  RESEARCH
AND DEVELOPMENT CENTER IS LOCATED, OR BY THE CITY COUNCIL IN THE CASE OF
THE  CITY  OF  NEW YORK MAY, BY RESOLUTION, SUBMIT TO THE COMMISSIONER A
REQUEST TO REVISE THE BOUNDARIES OF AN EXISTING RESEARCH AND DEVELOPMENT
CENTER. THE COMMISSIONER MAY, AFTER CONSULTING WITH THE COMMISSIONER  OF
LABOR, APPROVE SUCH REVISION SUBJECT TO THE FOLLOWING PROVISIONS:
  (I)  THE COMMISSIONER MAY GRANT APPROVAL OF REVISION OF THE BORDERS OF
A RESEARCH AND DEVELOPMENT CENTER WITHOUT PRIOR PUBLIC NOTICE AND  WITH-
OUT  PRIOR PUBLIC HEARING IF SUCH REVISION ADDS TERRITORY TO AN EXISTING

A. 4860                             4

RESEARCH AND DEVELOPMENT CENTER, BUT DOES NOT REMOVE TERRITORY FROM SUCH
CENTER.
  (II)  THE COMMISSIONER MAY GRANT APPROVAL OF A REVISION OF THE BORDERS
OF A RESEARCH  AND  DEVELOPMENT  CENTER  AFTER  PUBLIC  NOTICE  OF  SUCH
REVISION  AND  A PUBLIC HEARING AT LEAST THIRTY DAYS PRIOR TO THE EFFEC-
TIVE DATE OF SUCH REVISION, IF SUCH REVISION REMOVES TERRITORY  FROM  AN
EXISTING RESEARCH AND DEVELOPMENT CENTER.
  (III) THE REVISION OF THE BORDERS OF A RESEARCH AND DEVELOPMENT CENTER
SHALL  HAVE NO EFFECT ON THE DURATION OF THE DESIGNATION OF THE RESEARCH
AND DEVELOPMENT CENTER AS PROVIDED IN PARAGRAPH ONE OF THIS SUBDIVISION.
  S 5. The tax law is amended by adding five new  sections  25-a,  25-b,
25-c, 25-d and 25-e to read as follows:
  S 25-A. RESEARCH AND DEVELOPMENT WAGE CREDIT. (A) ALLOWANCE OF CREDIT.
A  TAXPAYER  WHICH  IS  A  CERTIFIED RESEARCH AND DEVELOPMENT ENTERPRISE
(CRDE), 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  (D) OF THIS SECTION, TO BE
COMPUTED AS HEREINAFTER PROVIDED.
  (B) DEFINITIONS. (1) THE  TERM  "CERTIFIED  RESEARCH  AND  DEVELOPMENT
ENTERPRISE"  OR  "CRDE"  SHALL MEAN A BUSINESS FACILITY WHICH DURING THE
TAXABLE YEAR IS PRINCIPALLY ENGAGED IN CONDUCTING RESEARCH AND  DEVELOP-
MENT  IN THE PHYSICAL, ENGINEERING, AND LIFE SCIENCES AND WHICH HAS BEEN
DESIGNATED UNDER SECTION NINE HUNDRED SEVENTY OF THE  GENERAL  MUNICIPAL
LAW.
  (2)  THE TERM "CERTIFIED RESEARCH PRODUCTION FACILITY" OR "CRPF" SHALL
MEAN A BUSINESS FACILITY BUILT IN NEW YORK STATE IN CONJUNCTION  WITH  A
CRDE  TO  PRODUCE  OR  MANUFACTURE PRODUCTS WHICH HAVE BEEN OR ARE BEING
DEVELOPED AT THE CRDE, PROVIDED THAT THE CRPF IS ESTABLISHED  AFTER  THE
DESIGNATION  OF  THE  CRDE,  AND WHICH HAS BEEN DESIGNATED UNDER SECTION
NINE HUNDRED SEVENTY OF THE GENERAL MUNICIPAL LAW.
  (3) THE TERM "RESEARCH AND DEVELOPMENT JOB" SHALL MEAN  AN  INDIVIDUAL
EMPLOYED  FULL TIME FOR AT LEAST ONE-HALF OF A TAXABLE YEAR AT A CRDE IN
WHICH THE PRIMARY JOB  FUNCTION  OF  THE  INDIVIDUAL  IS  CLASSIFIED  AS
RESEARCH AND DEVELOPMENT IN THE PHYSICAL, ENGINEERING, AND LIFE SCIENCES
UNDER THE NORTH AMERICAN INDUSTRY CLASSIFICATION SYSTEM.
  (4)  THE  TERM  "RESEARCH  PRODUCTION  JOB"  SHALL  MEAN AN INDIVIDUAL
EMPLOYED FULL TIME FOR AT LEAST ONE-HALF OF A TAXABLE YEAR AT A CRPF  IN
WHICH  THE PRIMARY JOB FUNCTION OF THE INDIVIDUAL IS CLASSIFIED AS MANU-
FACTURING UNDER THE NORTH AMERICAN INDUSTRY CLASSIFICATION SYSTEM.
  (5) THE TERM "EMPLOYMENT INCREASE YEAR" SHALL MEAN THE TAXABLE YEAR IN
WHICH THE INCREASE IN  EMPLOYMENT  FOR  WHICH  THIS  CREDIT  IS  CLAIMED
OCCURS.
  (6)  THE  TERM  "BASE  YEAR"  SHALL  MEAN THE TAXABLE YEAR IMMEDIATELY
PRECEDING THE EMPLOYMENT INCREASE YEAR.
  (7) THE TERM "EMPLOYMENT INCREASE LEVEL"  SHALL  MEAN  THE  DIFFERENCE
BETWEEN  THE  EMPLOYMENT  NUMBER IN THE EMPLOYMENT INCREASE YEAR AND THE
EMPLOYMENT NUMBER IN THE BASE YEAR. IF EMPLOYMENT INCREASE LEVEL IS LESS
THAN ZERO IN ANY TAXABLE YEAR, IT SHALL BE ASSUMED TO BE ZERO.
  (8) THE TERM "EMPLOYMENT NUMBER" SHALL  MEAN  THE  AVERAGE  NUMBER  OF
RESEARCH  AND DEVELOPMENT JOBS AT A CRDE AND RESEARCH PRODUCTION JOBS AT
A CRPF.  SUCH NUMBER SHALL BE COMPUTED BY DETERMINING THE NUMBER OF SUCH
QUALIFIED 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

A. 4860                             5

NUMBER OF SUCH DATES OCCURRING WITHIN SUCH APPLICABLE TAXABLE YEAR. SUCH
NUMBER  SHALL  NOT  INCLUDE  INDIVIDUALS EMPLOYED WITHIN THE IMMEDIATELY
PRECEDING SIXTY MONTHS BY A RELATED PERSON TO THE TAXPAYER, AS SUCH TERM
"RELATED  PERSON"  IS  DEFINED IN SUBPARAGRAPH (C) OF PARAGRAPH THREE OF
SUBSECTION (B) OF SECTION FOUR HUNDRED SIXTY-FIVE OF THE INTERNAL REVEN-
UE CODE.
  (9) THE TERM "TOTAL WAGES" SHALL MEAN THE  TOTAL  SALARIES  AND  WAGES
PAID  TO  EMPLOYEES INCLUDED IN THE CALCULATION OF THE EMPLOYMENT NUMBER
IN THE EMPLOYMENT INCREASE YEAR.
  (10) THE TERM "AVERAGE WAGES" SHALL MEAN TOTAL WAGES  DIVIDED  BY  THE
EMPLOYMENT NUMBER IN THE EMPLOYMENT INCREASE YEAR.
  (C)  APPLICATION  OF  THE CREDIT. (1) THE AMOUNT OF CREDIT SHALL EQUAL
THE PRODUCT (OR PRO RATA SHARE OF THE PRODUCT, IN THE CASE OF  A  MEMBER
OF  A  PARTNERSHIP) OF FIVE PERCENT OF THE AVERAGE WAGES AND THE EMPLOY-
MENT INCREASE LEVEL.
  (2) THE CREDIT MAY BE ALLOWED IN THE EMPLOYMENT INCREASE YEAR AND  THE
FOUR  TAXABLE  YEARS IMMEDIATELY FOLLOWING THE EMPLOYMENT INCREASE YEAR,
PROVIDED THAT IF THE EMPLOYMENT NUMBER IN ANY TAXABLE YEAR IN WHICH  THE
CREDIT  IS  CLAIMED IS LESS THAN THE EMPLOYMENT NUMBER IN THE EMPLOYMENT
INCREASE YEAR, THE AMOUNT OF CREDIT MUST BE RECALCULATED BY SUBSTITUTING
THE LOWER EMPLOYMENT NUMBER IN THE CURRENT TAXABLE YEAR FOR THE  EMPLOY-
MENT NUMBER IN THE EMPLOYMENT INCREASE YEAR FOR THE PURPOSE OF CALCULAT-
ING THE EMPLOYMENT INCREASE LEVEL AND THIS LOWER EMPLOYMENT NUMBER SHALL
BE  DEEMED  TO BE THE EMPLOYMENT NUMBER FOR THE EMPLOYMENT INCREASE YEAR
FOR ANY FUTURE APPLICATION OF THIS CREDIT.
  (D) CROSS-REFERENCES. FOR APPLICATION OF THE CREDIT  PROVIDED  FOR  IN
THIS SECTION, SEE THE FOLLOWING PROVISIONS OF THIS CHAPTER:
  (1) ARTICLE 9-A: SECTION 210: SUBDIVISION 43,
  (2) ARTICLE 22: SECTION 606: SUBSECTION (SS).
  S  25-B.  RESEARCH  AND  DEVELOPMENT  EXPENSE CREDIT. (A) ALLOWANCE OF
CREDIT. A TAXPAYER WHICH IS A CERTIFIED RESEARCH AND DEVELOPMENT  ENTER-
PRISE  (CRDE), AND WHICH IS SUBJECT TO TAX UNDER ARTICLE NINE-A OR TWEN-
TY-TWO OF THIS CHAPTER, SHALL BE ALLOWED  A  CREDIT  AGAINST  SUCH  TAX,
PURSUANT  TO  THE  PROVISIONS  REFERENCED  IN  SUBDIVISION  (D)  OF THIS
SECTION, TO BE COMPUTED AS HEREINAFTER PROVIDED.
  (B) DEFINITIONS. (1) THE  TERM  "CERTIFIED  RESEARCH  AND  DEVELOPMENT
ENTERPRISE"  OR "CRDE" SHALL HAVE THE SAME MEANING AS DEFINED BY SECTION
TWENTY-FIVE-A OF THIS ARTICLE.
  (2) THE TERM "QUALIFIED RESEARCH AND DEVELOPMENT EXPENSE"  SHALL  MEAN
ANY  EXPENSE  INCURRED  AT A CRDE TO CONDUCT RESEARCH AND DEVELOPMENT IN
THE PHYSICAL, ENGINEERING, AND LIFE SCIENCES, SUCH AS AGRICULTURE, ELEC-
TRONICS, ENVIRONMENTAL, BIOLOGY, BOTANY, BIOTECHNOLOGY, COMPUTERS, CHEM-
ISTRY, FOOD, FISHERIES, FORESTS, GEOLOGY, HEALTH, MATHEMATICS, MEDICINE,
OCEANOGRAPHY, PHARMACY, PHYSICS, VETERINARY, AND OTHER ALLIED  SUBJECTS.
QUALIFIED  RESEARCH  AND DEVELOPMENT EXPENSES SHALL NOT INCLUDE THE COST
OF LABOR OR ANY EQUIPMENT FOR  WHICH  ANY  INVESTMENT  TAX  CREDITS  ARE
CLAIMED FOR.
  (C)  APPLICATION  OF  THE CREDIT. THE AMOUNT OF CREDIT SHALL EQUAL THE
PRODUCT (OR PRO RATA SHARE OF THE PRODUCT, IN THE CASE OF A MEMBER OF  A
PARTNERSHIP)  OF  FIVE  PERCENT  OF  QUALIFIED  RESEARCH AND DEVELOPMENT
EXPENSES.
  (D) CROSS-REFERENCES. FOR APPLICATION OF THE CREDIT  PROVIDED  FOR  IN
THIS SECTION, SEE THE FOLLOWING PROVISIONS OF THIS CHAPTER:
  (1) ARTICLE 9-A: SECTION 210: SUBDIVISION 44,
  (2) ARTICLE 22: SECTION 606: SUBSECTION (TT).

A. 4860                             6

  S  25-C. RESEARCH AND DEVELOPMENT GRANT CREDIT. (A) ALLOWANCE OF CRED-
IT. A TAXPAYER WHICH IS A CERTIFIED RESEARCH AND DEVELOPMENT  ENTERPRISE
(CRDE),  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  (D) OF THIS SECTION, TO BE
COMPUTED AS HEREINAFTER PROVIDED.
  (B) DEFINITIONS. (1) THE  TERM  "CERTIFIED  RESEARCH  AND  DEVELOPMENT
ENTERPRISE"  OR "CRDE" SHALL HAVE THE SAME MEANING AS DEFINED BY SECTION
TWENTY-FIVE-A OF THIS ARTICLE.
  (2) THE TERM "UNIVERSITY RESEARCH CENTER" SHALL MEAN  ANY  DEPARTMENT,
FOUNDATION,  OR  BUSINESS  VENTURE OPERATED SOLELY BY ANY INSTITUTION OF
HIGHER EDUCATION LOCATED IN NEW YORK STATE, RECOGNIZED AND  APPROVED  BY
THE  REGENTS,  OR  ANY  SUCCESSOR ORGANIZATION, OF THE UNIVERSITY OF THE
STATE OF NEW YORK WHICH PROVIDES A COURSE OF STUDY LEADING TO THE GRANT-
ING OF A POST-SECONDARY DEGREE, CERTIFICATE OR DIPLOMA.
  (3) THE TERM "QUALIFIED RESEARCH AND  DEVELOPMENT  GRANT"  SHALL  MEAN
DONATION OF MONEY OR EQUIPMENT BY A CRDE TO A UNIVERSITY RESEARCH CENTER
WHICH  WILL  FACILITATE  OR  ASSIST  THE  UNIVERSITY  RESEARCH CENTER TO
CONDUCT RESEARCH AND DEVELOPMENT WHICH IS SUBSTANTIALLY RELATED  TO  THE
RESEARCH AND DEVELOPMENT ACTIVITIES OF THE CRDE.
  (C)  APPLICATION  OF  THE CREDIT. THE AMOUNT OF CREDIT SHALL EQUAL THE
PRODUCT (OR PRO RATA SHARE OF THE PRODUCT, IN THE CASE OF A MEMBER OF  A
PARTNERSHIP)  OF  TEN  PERCENT  OF  QUALIFIED  RESEARCH  AND DEVELOPMENT
GRANTS.
  (D) CROSS-REFERENCES. FOR APPLICATION OF THE CREDIT  PROVIDED  FOR  IN
THIS SECTION, SEE THE FOLLOWING PROVISIONS OF THIS CHAPTER:
  (1) ARTICLE 9-A: SECTION 210: SUBDIVISION 45,
  (2) ARTICLE 22: SECTION 606: SUBSECTION (UU).
  S  25-D.  CREDIT  FOR  REAL PROPERTY TAXES. (A) ALLOWANCE OF CREDIT. A
TAXPAYER WHICH  IS  A  CERTIFIED  RESEARCH  AND  DEVELOPMENT  ENTERPRISE
(CRDE),  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 (L) OF THIS SECTION, FOR ELIGI-
BLE REAL PROPERTY TAXES.
  (B) AMOUNT OF CREDIT. THE AMOUNT OF THE CREDIT SHALL  BE  THE  PRODUCT
(OR PRO RATA SHARE OF THE PRODUCT, IN THE CASE OF A MEMBER OF A PARTNER-
SHIP)  OF  (I)  THE  BENEFIT PERIOD FACTOR, (II) THE EMPLOYMENT INCREASE
FACTOR AND (III) THE ELIGIBLE REAL PROPERTY TAXES PAID  OR  INCURRED  BY
THE  CRDE DURING THE TAXABLE YEAR. HOWEVER, THE AMOUNT OF THE CREDIT MAY
NOT EXCEED THE CREDIT LIMITATION SET FORTH IN SUBDIVISION  (J)  OF  THIS
SECTION.
  (C) BENEFIT PERIOD FACTOR. THE BENEFIT PERIOD FACTORS ARE SET FORTH IN
THE FOLLOWING TABLE:
   TAXABLE YEAR OF THE                       BENEFIT PERIOD FACTOR:
     BENEFIT PERIOD:
         1--10                                           1.0
         11                                              .8
         12                                              .6
         13                                              .4
         14                                              .2
         15                                               0
  (D)  RESEARCH  AND DEVELOPMENT JOB. THE TERM "RESEARCH AND DEVELOPMENT
JOB" SHALL HAVE THE SAME MEANING AS DEFINED BY SECTION TWENTY-FIVE-A  OF
THIS ARTICLE.
  (E)  CENTER EMPLOYMENT INCREASE NUMBER. THE CENTER EMPLOYMENT INCREASE
NUMBER IS THE AVERAGE NUMBER OF RESEARCH AND DEVELOPMENT JOBS AT A CRDE.

A. 4860                             7

SUCH NUMBER SHALL BE COMPUTED BY DETERMINING THE NUMBER OF  SUCH  QUALI-
FIED  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 IMMEDIATELY PRECEDING
SIXTY MONTHS BY A RELATED PERSON TO THE TAXPAYER, AS SUCH TERM  "RELATED
PERSON"  IS DEFINED IN SUBPARAGRAPH (C) OF PARAGRAPH THREE OF SUBSECTION
(B) OF SECTION FOUR HUNDRED SIXTY-FIVE OF THE INTERNAL REVENUE CODE.
  (F) BASE YEAR. THE BASE YEAR IS THE TAXABLE YEAR IN WHICH  A  CRDE  IS
FIRST  CERTIFIED PURSUANT TO SECTION NINE HUNDRED SEVENTY OF THE GENERAL
MUNICIPAL LAW.
  (G) CENTER EMPLOYMENT INCREASE NUMBER. THE CENTER EMPLOYMENT  INCREASE
NUMBER  SHALL  EQUAL  THE  CENTER  EMPLOYMENT NUMBER IN THE TAXABLE YEAR
MINUS THE CENTER EMPLOYMENT NUMBER IN THE BASE YEAR. THE CENTER  EMPLOY-
MENT  INCREASE  NUMBER  SHALL BE DEEMED TO BE ZERO IF THE CALCULATION OF
THE CENTER EMPLOYMENT INCREASE NUMBER RESULTS IN A NEGATIVE NUMBER.
  (H) EMPLOYMENT INCREASE FACTOR. THE EMPLOYMENT  INCREASE  FACTORS  ARE
SET FORTH IN THE FOLLOWING TABLE:
CENTER EMPLOYMENT INCREASE NUMBER:                EMPLOYMENT INCREASE FACTOR:
         AT LEAST 150                                    1.0
         AT LEAST 100 BUT LESS THAN 150:                  .8
         AT LEAST 75 BUT LESS THAN 100:                   .6
         AT LEAST 50 BUT LESS THAN 75:                    .4
         AT LEAST 25 BUT LESS THAN 50:                    .2
         AT LEAST 10 BUT LESS THAN 25:                    .1
         ZERO                                              0
  (I)  ELIGIBLE  REAL  PROPERTY  TAXES. THE TERM "ELIGIBLE REAL PROPERTY
TAXES" MEANS TAXES IMPOSED ON REAL PROPERTY WHICH IS OWNED BY  THE  CRDE
AND  LOCATED  IN A RESEARCH AND DEVELOPMENT CENTER WITH RESPECT TO WHICH
THE CRDE IS CERTIFIED PURSUANT TO  ARTICLE  EIGHTEEN-B  OF  THE  GENERAL
MUNICIPAL  LAW,  PROVIDED  SUCH TAXES BECOME A LIEN ON THE REAL PROPERTY
DURING A TAXABLE YEAR IN WHICH THE OWNER OF THE REAL  PROPERTY  IS  BOTH
CERTIFIED  PURSUANT  TO  ARTICLE EIGHTEEN-B OF THE GENERAL MUNICIPAL LAW
AND A QUALIFIED EMPIRE ZONE ENTERPRISE.  IN ADDITION, THE TERM "ELIGIBLE
REAL PROPERTY TAXES" INCLUDES PAYMENTS IN LIEU OF TAXES MADE BY THE CRDE
TO THE STATE, A MUNICIPAL CORPORATION OR A  PUBLIC  BENEFIT  CORPORATION
PURSUANT  TO  A  WRITTEN AGREEMENT ENTERED INTO BETWEEN THE CRDE AND THE
STATE, MUNICIPAL CORPORATION, OR PUBLIC BENEFIT CORPORATION.   PROVIDED,
HOWEVER, A PAYMENT IN LIEU OF TAXES MADE BY THE CRDE PURSUANT TO A WRIT-
TEN  AGREEMENT  EXECUTED OR AMENDED ON OR AFTER JANUARY FIRST, TWO THOU-
SAND SIX, SHALL NOT CONSTITUTE ELIGIBLE REAL PROPERTY TAXES UNLESS  SUCH
WRITTEN  AGREEMENT IS APPROVED BY BOTH THE DEPARTMENT OF ECONOMIC DEVEL-
OPMENT AND THE DEPARTMENT OF TAXATION AND FINANCE AS SATISFYING GENERAL-
LY ACCEPTED AND RECOGNIZED NORMS AND  STANDARDS  OF  REAL  PROPERTY  TAX
APPRAISALS.
  (J)  THE  CREDIT  LIMITATION  SHALL  BE  THE GREATER OF THE EMPLOYMENT
INCREASE LIMITATION. THE EMPLOYMENT INCREASE  LIMITATION  SHALL  BE  THE
PRODUCT  OF  (I)  FIVE THOUSAND DOLLARS AND (II) THE EMPLOYMENT INCREASE
NUMBER.
  (K) CREDIT RECAPTURE. WHERE A  CRDE'S  ELIGIBLE  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

A. 4860                             8

PROVISION  OF  LAW,  THE TAXPAYER SHALL ADD BACK, IN THE TAXABLE YEAR IN
WHICH SUCH FINAL ORDER IS ISSUED, THE EXCESS OF (I) THE AMOUNT OF CREDIT
ORIGINALLY ALLOWED FOR A TAXABLE YEAR OVER (II)  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.
  (L)  CROSS-REFERENCES.  FOR  APPLICATION OF THE CREDIT PROVIDED FOR IN
THIS SECTION, SEE THE FOLLOWING PROVISIONS OF THIS CHAPTER:
  (1) ARTICLE 9-A: SECTION 210: SUBDIVISION 46,
  (2) ARTICLE 22: SECTION 606: SUBSECTION (VV).
  S 25-E. RESEARCH PRODUCTION FACILITY PROGRAM. (A)  QUALIFIED  RESEARCH
PRODUCTION  FACILITY (QRPF). A BUSINESS ENTERPRISE WHICH HAS BEEN DESIG-
NATED AS A CERTIFIED RESEARCH PRODUCTION FACILITY  PURSUANT  TO  SECTION
NINE HUNDRED SEVENTY OF THE GENERAL MUNICIPAL LAW, AS DEFINED BY SECTION
TWENTY-FIVE-A  OF THIS ARTICLE, SHALL BE A QUALIFIED RESEARCH PRODUCTION
FACILITY FOR THE TAXABLE YEARS  AND  THE  FOURTEEN  TAXABLE  YEARS  NEXT
FOLLOWING  THE TAXABLE YEAR IN WHICH SUCH DESIGNATION WAS MADE. THE SITE
OF THE QUALIFIED RESEARCH  PRODUCTION  FACILITY  SHALL  BE  A  QUALIFIED
RESEARCH PRODUCTION SITE.
  (B)  TAX  BENEFITS.  A QUALIFIED RESEARCH PRODUCTION FACILITY SHALL BE
ELIGIBLE FOR ALL TAX BENEFITS AVAILABLE UNDER THIS CHAPTER IN REGARD  TO
AN  EMPIRE  ZONE,  INCLUDING,  BUT  NOT LIMITED TO, ALL TAX BENEFITS FOR
WHICH A QUALIFIED EMPIRE ZONE ENTERPRISE IS ELIGIBLE, EXCEPT EMPIRE ZONE
CAPITAL TAX CREDITS PROVIDED PURSUANT TO SUBDIVISION TWENTY  OF  SECTION
TWO  HUNDRED  TEN, SUBSECTION (D) OF SECTION FOURTEEN HUNDRED FIFTY-SIX,
OR SUBSECTION (1) OF SECTION SIX HUNDRED SIX OF THIS CHAPTER.
  (C) APPLICATION. FOR PURPOSES OF APPLYING THIS SECTION,  WHEREVER  THE
TERMS  "EMPIRE  ZONE"  AND  "QUALIFIED EMPIRE ZONE ENTERPRISE" APPEAR IN
THIS CHAPTER, SUCH TERMS SHALL BE READ AS "QUALIFIED PRODUCTION  FACILI-
TY"  AND  AS  "QUALIFIED  RESEARCH PRODUCTION FACILITY" RESPECTIVELY AND
SUCH OTHER MODIFICATIONS MAY BE MADE BY THE COMMISSIONER AS  ARE  NECES-
SARY  TO  ADAPT PROVISIONS RELATING TO EMPIRE ZONES AND QUALIFIED EMPIRE
ZONE ENTERPRISES TO QUALIFIED RESEARCH PRODUCTION  FACILITIES.  FURTHER,
THE  EMPLOYMENT TEST SET FORTH IN SUBDIVISION (B) OF SECTION FOURTEEN OF
THIS ARTICLE SHALL BE DISREGARDED AND THE  EMPLOYMENT  INCREASE  FACTORS
SET FORTH IN SUBDIVISION (D) OF SECTION SIXTEEN OF THIS ARTICLE SHALL BE
REPLACED  BY  THE EMPLOYMENT FACTOR SET FORTH IN SUBDIVISION (D) OF THIS
SECTION.
  (D) QRPF EMPLOYMENT FACTOR. THE EMPLOYMENT INCREASE  FACTORS  ARE  SET
FORTH IN THE FOLLOWING TABLE:
NUMBER OF FULL-TIME EMPLOYEES AT THE              EMPLOYMENT INCREASE FACTOR:
QUALIFIED RESEARCH PRODUCTION FACILITY:
          AT LEAST 150                                   1.0
          AT LEAST 100 BUT LESS THAN 150:                 .8
          AT LEAST 75 BUT LESS THAN 100:                  .6
          AT LEAST 50 BUT LESS THAN 75:                   .4
          AT LEAST 25 BUT LESS THAN 50:                   .2
          LESS THAN 25:                                    0
  (E)  QEZE  OPTION.  IF THE QUALIFIED PRODUCTION FACILITY IS LOCATED IN
WHOLE OR IN PART IN AN AREA DESIGNATED AS AN  EMPIRE  ZONE  PURSUANT  TO
ARTICLE  EIGHTEEN-B  OF THE GENERAL MUNICIPAL LAW AND THE TAXPAYER MEETS
THE QUALIFICATION TO BE BOTH A QUALIFIED EMPIRE ZONE  ENTERPRISE  AND  A
QUALIFIED  RESEARCH  PRODUCTION FACILITY, THE TAXPAYER SHALL BE REQUIRED

A. 4860                             9

IN THE FIRST TAXABLE YEAR IN WHICH  BENEFITS  UNDER  EITHER  STATUS  ARE
AVAILABLE  TO  MAKE  AN  IRREVOCABLE  ELECTION  TO BE EITHER A QUALIFIED
EMPIRE ZONE ENTERPRISE OR TO BE A QUALIFIED RESEARCH PRODUCTION  FACILI-
TY.  SUCH ELECTION SHALL BE MADE WITH THE FILING OF THE RETURN OR REPORT
REQUIRED OF THE TAXPAYER UNDER THIS CHAPTER.
  S 6. Section 210 of the tax law is amended by adding four new subdivi-
sions 43, 44, 45 and 46 to read as follows:
  43. RESEARCH AND DEVELOPMENT WAGE CREDIT. (A) ALLOWANCE OF CREDIT.   A
TAXPAYER  SHALL  BE  ALLOWED  A  CREDIT,  TO  BE COMPUTED AS PROVIDED IN
SECTION TWENTY-FIVE-A 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.
  44.  RESEARCH AND DEVELOPMENT EXPENSE CREDIT. (A) ALLOWANCE OF CREDIT.
A TAXPAYER SHALL BE ALLOWED A CREDIT, TO  BE  COMPUTED  AS  PROVIDED  IN
SECTION  TWENTY-FIVE-B  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 OR
CARRYOVERS OF SUCH CREDIT, OR BOTH, ALLOWED UNDER THIS  SUBDIVISION  FOR
ANY TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT, ANY AMOUNT OF THE CRED-
IT  OR CARRYOVERS OF SUCH CREDIT THUS NOT DEDUCTED IN SUCH TAXABLE YEARS
MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND MAY  BE  DEDUCTED
FROM TAX FOR SUCH YEAR OR YEARS.
  45. RESEARCH AND DEVELOPMENT GRANT CREDIT. (A) ALLOWANCE OF CREDIT.  A
TAXPAYER  SHALL  BE  ALLOWED  A  CREDIT,  TO  BE COMPUTED AS PROVIDED IN
SECTION TWENTY-FIVE-C 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.
  46.  CRDE  CREDIT  FOR REAL PROPERTY TAXES. (A) ALLOWANCE OF CREDIT. A
TAXPAYER SHALL BE ALLOWED A  CREDIT,  TO  BE  COMPUTED  AS  PROVIDED  IN
SECTION  TWENTY-FIVE-D  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

A. 4860                            10

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.
  S 7. Subparagraph (B) of paragraph 1 of subsection (i) of section  606
of  the tax law is amended by adding four new clauses (xxxii), (xxxiii),
(xxxiv) and (xxxv) to read as follows:

(XXXII) RESEARCH AND                 AMOUNT OF CREDIT UNDER
DEVELOPMENT WAGE                     SUBDIVISION FORTY-THREE
CREDIT UNDER SUBSECTION              OF SECTION TWO HUNDRED
(SS)                                 TEN

(XXXIII) RESEARCH AND                AMOUNT OF CREDIT UNDER
DEVELOPMENT EXPENSE                  SUBDIVISION FORTY-FOUR
CREDIT UNDER SUBSECTION              OF SECTION TWO HUNDRED
(TT)                                 TEN

(XXXIV) RESEARCH AND                 AMOUNT OF CREDIT UNDER
DEVELOPMENT GRANT                    SUBDIVISION FORTY-FIVE
CREDIT UNDER SUBSECTION              OF SECTION TWO HUNDRED
(UU)                                 TEN

(XXXV) CRDE CREDIT FOR REAL          AMOUNT OF CREDIT UNDER
PROPERTY TAXES UNDER                 SUBDIVISION FORTY-SIX
SUBSECTION (VV)                      OF SECTION TWO HUNDRED
                                     TEN
  S 8. Section 606 of  the  tax  law  is  amended  by  adding  four  new
subsections (ss), (tt), (uu) and (vv) to read as follows:
  (SS) RESEARCH AND DEVELOPMENT WAGE CREDIT. (1) ALLOWANCE OF CREDIT.  A
TAXPAYER  SHALL  BE  ALLOWED  A  CREDIT,  TO  BE COMPUTED AS PROVIDED IN
SECTION TWENTY-FIVE-A 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.
  (TT) RESEARCH AND DEVELOPMENT EXPENSE CREDIT. (1) ALLOWANCE OF CREDIT.
A  TAXPAYER  SHALL  BE  ALLOWED  A CREDIT, TO BE COMPUTED AS PROVIDED IN
SECTION TWENTY-FIVE-B OF THIS CHAPTER, AGAINST THE TAX IMPOSED  BY  THIS
ARTICLE.
  (2)  APPLICATION OF CREDIT. IF THE AMOUNT OF THE 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, 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. 4860                            11

  (UU) RESEARCH AND DEVELOPMENT GRANT CREDIT. (1) ALLOWANCE  OF  CREDIT.
A  TAXPAYER  SHALL  BE  ALLOWED  A CREDIT, TO BE COMPUTED AS PROVIDED IN
SECTION TWENTY-FIVE-C 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.
  (VV)  CRDE CREDIT FOR REAL PROPERTY TAXES. (1) ALLOWANCE OF CREDIT.  A
TAXPAYER SHALL BE ALLOWED A  CREDIT,  TO  BE  COMPUTED  AS  PROVIDED  IN
SECTION  TWENTY-FIVE-D  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.
  S 9. Paragraph (a) of subdivision 12 of section 210 of the tax law, as
amended by chapter 817 of the laws  of  1987,  is  amended  to  read  as
follows:
  (a) A taxpayer shall be allowed a credit, to be computed as hereinaft-
er  provided, against the tax imposed by this article. The amount of the
credit shall be the per cent provided for hereinbelow of the  investment
credit  base.  The investment credit base is 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,  less  the
amount  of  the  nonqualified nonrecourse financing with respect to such
property to the extent such financing would be excludible from the cred-
it base pursuant to  section  46(c)(8)  of  the  internal  revenue  code
(treating such property as section thirty-eight property irrespective of
whether  or  not  it in fact constitutes section thirty-eight property).
If, at the close of a taxable year following the taxable year  in  which
such  property  was  placed  in  service, there is a net decrease in the
amount of nonqualified nonrecourse financing with respect to such  prop-
erty, such net decrease shall be treated as if it were the cost or other
basis  of  property  described  in  paragraph  (b)  of  this subdivision
acquired, constructed, reconstructed or erected during the year  of  the
decrease  in  the  amount  of nonqualified nonrecourse financing. In the
case of a combined report the term investment credit base shall mean the
sum of the investment credit base of each corporation included  on  such
report. The percentage to be used to compute the credit allowed pursuant
to  this  subdivision  shall  be that percentage appearing in column two
which is opposite the appropriate period in  column  one  in  which  the
tangible  personal  property was acquired, constructed, reconstructed or
erected, as the case may be:

       Column 1                         Column 2
After December 31, 1968 and
prior to January 1, 1974              one per cent
After December 31, 1973 and
prior to January 1, 1978              two per cent
After December 31, 1977 and

A. 4860                            12

prior to January 1, 1979              three per cent
After December 31, 1978 and
prior to June 1, 1981                 four per cent
After May 31, 1981 and
prior to July 1, 1982                 five per cent
After June 30, 1982 and
prior to January 1, 1987              six per cent
For taxable years                     five per cent with respect
beginning in 1987,                    to the first five hundred
1988 and 1989                         million dollars of the
                                      investment credit base, and
                                      four percent with respect to
                                      the investment credit base in
                                      excess of five hundred million
                                      dollars, except that in the case
                                      of research and development
                                      property at the option of the
                                      taxpayer the applicable per-
                                      centage shall be nine
For taxable years beginning
in 1990                               five percent with respect to the
                                      first four hundred twenty-five
                                      million dollars of the investment
                                      credit base, and four percent
                                      with respect to the investment
                                      credit base in excess of four
                                      hundred twenty-five million
                                      dollars, except that in the
                                      case of research and
                                      development property at the
                                      option of the taxpayer the
                                      applicable percentage shall
                                      be nine
For taxable years beginning
after 1990 BUT BEFORE 2012            five percent with respect to
                                      the first three hundred fifty
                                      million dollars of the invest-
                                      ment credit base, and four percent
                                      with respect to the investment
                                      credit base in excess of three
                                      hundred fifty million dollars,
                                      except that in the case of
                                      research and development
                                      property at the option of the
                                      taxpayer the applicable
                                      percentage shall be nine
FOR TAXABLE YEARS BEGINNING           FIVE PERCENT WITH RESPECT TO THE
AFTER 2011                            FIRST THREE HUNDRED FIFTY MILLION
                                      DOLLARS OF THE INVESTMENT CREDIT
                                      BASE, AND FOUR PERCENT WITH RESPECT
                                      TO THE INVESTMENT CREDIT BASE IN
                                      EXCESS OF THREE HUNDRED FIFTY
                                      MILLION DOLLARS, EXCEPT THAT IN THE
                                      CASE OF RESEARCH AND DEVELOPMENT
                                      PROPERTY AT THE OPTION OF THE
                                      TAXPAYER THE APPLICABLE PERCENTAGE

A. 4860                            13

                                      SHALL BE NINE, AND THAT IN THE CASE
                                      OF RESEARCH AND DEVELOPMENT PROPERTY
                                      LOCATED WITHIN A RESEARCH AND
                                      DEVELOPMENT ZONE AT THE OPTION
                                      OF THE TAXPAYER THE APPLICABLE
                                      PERCENTAGE SHALL BE EIGHTEEN
Provided,  however,  that  in  the case of an acquisition, construction,
reconstruction or erection which was commenced in  any  one  period  and
continued  or completed in any subsequent period the credit shall be the
sum of the portions of the investment credit base attributable  to  each
such  period,  which  portion  with respect to each such period shall be
ascertained by multiplying such investment credit base 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, multiplied by the allowable
percentage for each such period.
  S 10. Paragraph 1 of subsection (a) of section 606 of the tax law,  as
amended  by  chapter  170  of  the  laws  of 1994, is amended to read as
follows:
  (1) A taxpayer shall be allowed a credit, to be computed as hereinaft-
er provided, against the tax imposed by this article. The amount of  the
credit  shall be the per cent provided for hereinbelow of the investment
credit base. The investment credit base is 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, less the
amount of the nonqualified nonrecourse financing with  respect  to  such
property to the extent such financing would be excludible from the cred-
it  base  pursuant  to  section  46(c)(8)  of  the internal revenue code
(treating such property as section thirty-eight property irrespective of
whether or not it in fact constitutes  section  thirty-eight  property).
If,  at  the close of a taxable year following the taxable year in which
such property was placed in service, there is  a  net  decrease  in  the
amount  of nonqualified nonrecourse financing with respect to such prop-
erty, such net decrease shall be treated as if it were the cost or other
basis  of  property  described  in  paragraph  two  of  this  subsection
acquired,  constructed,  reconstructed or erected during the year of the
decrease in  the  amount  of  nonqualified  nonrecourse  financing.  The
percentage  to  be  used  to compute the credit allowed pursuant to this
subsection shall be that percentage appearing in  column  two  which  is
opposite  the  appropriate  period  in  column one in which the tangible
personal property was acquired, constructed, reconstructed  or  erected,
as the case may be:

 Column 1                              Column 2
After December 31, 1968 and
prior to January 1, 1974               one per cent
After December 31, 1973 and
prior to January 1, 1978               two per cent
After December 31, 1977 and
prior to January 1, 1979               three per cent
After December 31, 1978 and
prior to June 1, 1981                  four per cent
After May 31, 1981 and
prior to July 1, 1982                  five per cent

A. 4860                            14

After June 30, 1982 and
before January 1, 1987                 six per cent
After December 31, 1986                four per cent, except that in the
AND BEFORE JANUARY                     case of research and
1, 2012                                development property the applicable
                                       percentage shall be seven

AFTER DECEMBER 31, 2012                FOUR PER CENT, EXCEPT THAT IN THE
                                       CASE OF RESEARCH AND
                                       DEVELOPMENT PROPERTY THE APPLICABLE
                                       PERCENTAGE SHALL BE SEVEN, AND THAT
                                       IN THE CASE OF RESEARCH AND
                                       DEVELOPMENT PROPERTY LOCATED WITHIN
                                       A RESEARCH AND DEVELOPMENT ZONE THE
                                       APPLICABLE PERCENTAGE SHALL BE FOURTEEN

Provided,  however,  that  in  the case of an acquisition, construction,
reconstruction or erection which was commenced in  any  one  period  and
continued  or completed in any subsequent period the credit shall be the
sum of the portions of the investment credit base attributable  to  each
such  period,  which  portion  with respect to each such period shall be
ascertained by multiplying such investment credit base 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, multiplied by the allowable
percentage for each such period.
  S 11. Paragraph (a) of subdivision 9 of section 208 of the tax law  is
amended by adding two new subparagraphs 18 and 19 to read as follows:
  (18)  IN  THE  CASE OF A CERTIFIED RESEARCH AND DEVELOPMENT ENTERPRISE
WHICH HAS BEEN DESIGNATED UNDER SECTION  NINE  HUNDRED  SEVENTY  OF  THE
GENERAL  MUNICIPAL LAW, AN AMOUNT EQUAL TO FIFTY PERCENT OF ANY PAYMENTS
RECEIVED TO  CONDUCT  RESEARCH  AND  DEVELOPMENT  ACTIVITIES  WHICH  ARE
CONDUCTED  WITHIN  A  RESEARCH AND DEVELOPMENT ZONE, LESS ANY DEDUCTIBLE
EXPENSES INCURRED TO CONDUCT THE RESEARCH AND DEVELOPMENT ACTIVITY.
  (19) IN THE CASE OF A CERTIFIED RESEARCH  AND  DEVELOPMENT  ENTERPRISE
WHICH  HAS  BEEN  DESIGNATED  UNDER  SECTION NINE HUNDRED SEVENTY OF THE
GENERAL MUNICIPAL LAW, AN AMOUNT EQUAL TO TWENTY PERCENT OF ANY  ROYALTY
PAYMENTS  RECEIVED  ON  PATENTS  DERIVED  FROM  RESEARCH AND DEVELOPMENT
ACTIVITIES CONDUCTED WITHIN A RESEARCH AND DEVELOPMENT ZONE.
  S 12. Subsection (c) of section 612 of  the  tax  law  is  amended  by
adding two new paragraphs 39 and 40 to read as follows:
  (39)  IN  THE  CASE OF A CERTIFIED RESEARCH AND DEVELOPMENT ENTERPRISE
WHICH HAS BEEN DESIGNATED UNDER SECTION  NINE  HUNDRED  SEVENTY  OF  THE
GENERAL  MUNICIPAL LAW, AN AMOUNT EQUAL TO FIFTY PERCENT OF ANY PAYMENTS
RECEIVED TO  CONDUCT  RESEARCH  AND  DEVELOPMENT  ACTIVITIES  WHICH  ARE
CONDUCTED  WITHIN  A  RESEARCH AND DEVELOPMENT ZONE, LESS ANY DEDUCTIBLE
EXPENSES INCURRED TO CONDUCT THE RESEARCH AND DEVELOPMENT ACTIVITY.
  (40) IN THE CASE OF A CERTIFIED RESEARCH  AND  DEVELOPMENT  ENTERPRISE
WHICH  HAS  BEEN  DESIGNATED  UNDER  SECTION NINE HUNDRED SEVENTY OF THE
GENERAL MUNICIPAL LAW, AN AMOUNT EQUAL TO TWENTY PERCENT OF ANY  ROYALTY
PAYMENTS  RECEIVED  ON  PATENTS  DERIVED  FROM  RESEARCH AND DEVELOPMENT
ACTIVITIES CONDUCTED WITHIN A RESEARCH AND DEVELOPMENT ZONE.
  S 13. This act shall take effect immediately and shall apply to  taxa-
ble years beginning on and after January 1, 2012.