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

                                  6838

                            I N  S E N A T E

                             March 28, 2012
                               ___________

Introduced  by  Sen.  GOLDEN -- read twice and ordered printed, and when
  printed to be committed to the Committee on Investigations and Govern-
  ment Operations

AN ACT to amend the tax law, in relation to the qualified emerging tech-
  nology company facilities, operations and training credit

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

  Section  1. Subdivision 12-G of section 210 of the tax law, as amended
by section 1-a of part A of chapter 63 of the laws  of  2005,  paragraph
(f) as amended by section 2 of part A of chapter 57 of the laws of 2010,
is amended to read as follows:
  12-G. Qualified emerging technology company facilities, operations and
training  credit.  (a)  A taxpayer that is [a] IN WHOLE OR IN PART OF AN
ENTITY THAT MEETS THE CRITERIA OF BEING A qualified emerging  technology
company  pursuant  to the provisions of section thirty-one hundred two-e
(and specifically for the activities  referenced  in  paragraph  (b)  of
subdivision  one of such section thirty-one hundred two-e) of the public
authorities law, and that meets the eligibility  requirements  in  para-
graph (b) of this subdivision, shall be allowed a credit against the tax
imposed  by this article. The amount of credit shall be equal to the sum
of the amounts specified in paragraphs (c), (d), and (e) of this  subdi-
vision  ATTRIBUTABLE TO THE TAXPAYER subject to the limitations in para-
graph (f) of this subdivision.
  (b) An eligible taxpayer shall (i) have no more than one hundred full-
time employees, of which at least seventy-five percent are  employed  in
New  York  state,  EXCEPT  AS OTHERWISE PROVIDED IN THIS PARAGRAPH, (ii)
have a ratio of research and development funds to net sales, as referred
to in section thirty-one hundred two-e of the  public  authorities  law,
which  equals  or exceeds six percent during its taxable year, and (iii)
have gross revenues, along with the gross revenues of its affiliates and
related members, not exceeding [twenty] FORTY million  dollars  for  the
taxable  year  immediately  preceding the year the taxpayer is allowed a
credit under this subdivision. For purposes of this paragraph, the  term
"related member" shall have the same meaning as set forth in clauses (A)

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

                                                           LBD15081-01-2

S. 6838                             2

and  (B)  of  subparagraph  one  of paragraph (o) of subdivision nine of
section two hundred eight of this article,  and  the  term  "affiliates"
shall  mean  those  corporations that are members of the same affiliated
group (as defined in section fifteen hundred four of the internal reven-
ue  code)  as  the  taxpayer.   FOR PURPOSES OF SUBPARAGRAPH (I) OF THIS
PARAGRAPH, EMPLOYEES WHO ARE EMPLOYED OUTSIDE THE UNITED  STATES  DURING
THE  TAXABLE  YEAR  SHALL  NOT  BE CONSIDERED; A TAXPAYER THAT MEETS THE
EMPLOYMENT REQUIREMENTS IN SUBPARAGRAPH (I) OF  THIS  PARAGRAPH  IN  THE
FIRST  YEAR  IN  WHICH THE CREDIT ALLOWED BY THIS SUBDIVISION IS CLAIMED
WILL NOT BE CONSIDERED INELIGIBLE SOLELY AS A RESULT OF HAVING MORE THAN
ONE HUNDRED FULL-TIME EMPLOYEES IN OTHER  TAXABLE  YEARS  IN  WHICH  THE
CREDIT  IS  CLAIMED,  PROVIDED  AT  LEAST  SEVENTY-FIVE  PERCENT  OF THE
FULL-TIME EMPLOYEES IN THE OTHER TAXABLE YEARS ARE EMPLOYED IN NEW  YORK
STATE;  AND  AN  INDIVIDUAL  WHO IS A PARTNER IN A PARTNERSHIP THAT IS A
QUALIFIED EMERGING TECHNOLOGY COMPANY WILL  BE  CONSIDERED  A  FULL-TIME
EMPLOYEE  IF THE INDIVIDUAL PARTNER PARTICIPATES IN THE PARTNERSHIP ON A
FULL-TIME BASIS DURING THE TAXABLE YEAR AND THE INVOLVEMENT OF THE INDI-
VIDUAL PARTNER IN THE ACTIVITIES OF THE PARTNERSHIP DURING  THE  TAXABLE
YEAR  SATISFIES THE REQUIREMENTS FOR MATERIAL PARTICIPATION FOR THE SAME
TAXABLE YEAR WITHIN THE MEANING OF SUBSECTION (H) OF SECTION 469 OF  THE
INTERNAL REVENUE CODE.
  (c)  An  eligible  taxpayer  shall  be allowed a credit for [eighteen]
THIRTY per centum of the ATTRIBUTABLE cost or [other] SIMILAR basis  for
federal  income  tax  purposes  of  research and development property as
defined in paragraph (b) of subdivision twelve of this section  that  is
acquired by the taxpayer by purchase as defined in section 179(d) of the
internal  revenue  code  and  placed in service during the taxable year.
Provided, however, for the purposes of this paragraph only, an  eligible
taxpayer  shall  be  allowed  a  credit  for  such percentage of the (i)
ATTRIBUTABLE cost or  [other]  SIMILAR  basis  for  federal  income  tax
purposes for property used in the testing or inspection of materials and
products,
  (ii)  the  ATTRIBUTABLE  costs  or  expenses  associated  with quality
control of the research and development,
  (iii) ATTRIBUTABLE fees for use of sophisticated technology facilities
and processes,
  (iv) ATTRIBUTABLE fees  for  the  production  or  eventual  commercial
distribution  of materials and products resulting from the activities of
an eligible taxpayer as long as such activities fall  under  the  activ-
ities  listed  in paragraph (b) of subdivision one of section thirty-one
hundred two-e of the public authorities law.  The  costs,  expenses  and
other amounts for which a credit is allowed and claimed under this para-
graph  shall  not be used in the calculation of any other credit allowed
under this article.
  (d) An eligible taxpayer shall be allowed a credit for [nine]  FIFTEEN
per  centum  of  "qualified  research  expenses" paid or incurred by the
taxpayer in the taxable year. "Qualified research expenses"  shall  mean
ATTRIBUTABLE  expenses  associated with in-house research and processes,
and ATTRIBUTABLE costs associated with the dissemination of the  results
of  the products that directly result from such research and development
activities; provided, however, that such costs shall not include  adver-
tising  or  promotion  through media. In addition, costs associated with
the preparation of patent applications, patent application filing  fees,
patent  research  fees,  patent examinations fees, patent post allowance
fees, patent maintenance fees, and grant application expenses  and  fees
shall  be  eligible for such credit. In no case shall the credit allowed

S. 6838                             3

under this paragraph apply to expenses for litigation or  the  challenge
of  another  entity's  intellectual  property  rights,  or  for contract
expenses involving outside paid consultants.
  (e) An eligible taxpayer shall be allowed a credit for qualified high-
technology  training expenditures as described in this paragraph paid or
incurred by the taxpayer. (i) The amount of credit shall be one  hundred
percent of the training expenses described in subparagraph (iii) of this
paragraph, subject to a limitation of no more than four thousand dollars
per employee per year for such training expenses.
  (ii)  Qualified  high-technology  training  shall  include a course or
courses taken and satisfactorily completed by an employee of the taxpay-
er at an accredited, degree granting post-secondary college or universi-
ty in New York  state  that  (A)  directly  relates  to  the  activities
referred  to  in  paragraph (b) of subdivision one of section thirty-one
hundred two-e of the public authorities law, and
  (B) is intended to upgrade, retrain or  improve  the  productivity  or
theoretical  awareness  of  the  employee.  Such  course  or courses may
include, but are not limited to, instruction  or  research  relating  to
techniques,  meta,  macro,  or  micro-theoretical or practical knowledge
bases or frontiers, or ethical concerns related to such activities. Such
course or courses shall  not  include  classes  in  the  disciplines  of
management,  accounting  or the law or any class designed to fulfill the
discipline specific requirements of a degree program at  the  associate,
baccalaureate,  graduate  or  professional  level  of these disciplines.
Satisfactory completion of a course or courses shall  mean  the  earning
and  granting  of  credit  or  equivalent unit, with the attainment of a
grade of "B" or higher in a graduate level course or courses, a grade of
"C" or higher in an undergraduate level course or courses, or a  similar
measure  of  competency for a course that is not measured according to a
standard grade formula.
  (iii) Qualified high-technology training  expenditures  shall  include
expenses for tuition and mandatory fees, software required by the insti-
tution,  fees for textbooks or other literature required by the institu-
tion offering the course or courses, minus applicable  scholarships  and
tuition  or fee waivers not granted by the taxpayer or any affiliates of
the taxpayer, that are paid or reimbursed  by  the  taxpayer.  Qualified
high-technology  expenditures  do  not  include room and board, computer
hardware or software not specifically assigned for such course or cours-
es, late-charges, fines or membership dues and  similar  expenses.  Such
qualified  expenditures shall not be eligible for the credit provided by
this section unless the employee for whom the expenditures are disbursed
is continuously employed by the taxpayer in a full-time, full-year posi-
tion primarily located at a qualified site during  the  period  of  such
coursework  and  lasting  through at least one hundred eighty days after
the satisfactory completion of  the  qualifying  course-work.  Qualified
high-technology  training  expenditures  shall  not include expenses for
in-house or shared training outside of a New York state higher education
institution or the use of consultants outside of credit granting  cours-
es,  whether  such  consultants function inside of such higher education
institution or not.
  (iv) If a taxpayer  relocates  from  an  academic  business  incubator
facility  partnered with an accredited post-secondary education institu-
tion located within New York state, which provides  space  and  business
support  services  to taxpayers, to another site, the credit provided in
this section shall be allowed for all expenditures referenced in subpar-
agraph (iii) of this paragraph paid or incurred  in  the  two  preceding

S. 6838                             4

taxable years that the taxpayer was located in such an incubator facili-
ty  for  employees of the taxpayer who also relocate from said incubator
facility to such New York site and are employed and primarily located by
the  taxpayer  in New York. Such expenditures in the two preceding years
shall be added to  the  amounts  otherwise  qualifying  for  the  credit
provided  by  this subdivision that were paid or incurred in the taxable
year that the taxpayer relocates from such a facility.    Such  expendi-
tures  shall  include  expenses  paid  for an eligible employee who is a
full-time, full-year employee of said taxpayer during the  taxable  year
that  the  taxpayer relocated from an incubator facility notwithstanding
(i) that such employee was employed full or  part-time  as  an  officer,
staff-person  or  paid  intern  of  the  taxpayer when such taxpayer was
located at such incubator facility or (ii) that such  employee  was  not
continuously  employed  when  such taxpayer was located at the incubator
facility during the one hundred eighty day period referred to in subpar-
agraph (iii) of this paragraph, provided such employee received wages or
equivalent income for at least seven  hundred  fifty  hours  during  any
twenty-four  month period when the taxpayer was located at the incubator
facility. Such expenditures shall include payments made to such employee
after the taxpayer has relocated from the incubator facility for  quali-
fied expenditures if such payments are made to reimburse an employee for
expenditures  paid  by the employee during such two preceding years. The
credit provided under this subparagraph shall be allowed in any  taxable
year that the taxpayer qualifies as an eligible taxpayer.
  (v)  For  purposes  of this subdivision the term "academic year" shall
mean the annual period  of  sessions  of  a  post-secondary  college  or
university.
  (vi) For the purposes of this subdivision the term "academic incubator
facility"  shall  mean  a  facility  providing low-cost space, technical
assistance, support services and  educational  opportunities,  including
but  not  limited  to  central  services  provided by the manager of the
facility to the tenants of the facility, to an  entity  located  in  New
York state. Such entity's primary activity must be an activity described
in  paragraph (b) of subdivision one of section thirty-one hundred two-e
of the public authorities law, and such entity must be in the  formative
stage  of  development.  The  academic incubator facility and the entity
must act in partnership with an  accredited  post-secondary  college  or
university  located  in New York state. An academic incubator facility's
mission shall be to promote job creation,  entrepreneurship,  technology
transfer,  and provide support services to incubator tenants, including,
but not limited to, business  planning,  management  assistance,  finan-
cial-packaging,  linkages  to  financing services, and coordinating with
other sources of assistance.
  (f) An eligible taxpayer may claim credits under this subdivision  for
four  consecutive  taxable years, except, if a taxpayer is located in an
academic incubator facility and relocates within New  York  state  to  a
nonacademic  incubator  site, then the taxpayer (i) may make a revocable
election to defer the credit provided  under  this  subdivision  to  the
first  taxable  year  beginning  after  the  taxpayer  relocates from an
academic incubator facility, and (ii) shall be eligible for such  credit
for  five consecutive taxable years. In no case shall the credit allowed
by this subdivision to a taxpayer exceed [two hundred and fifty] A TOTAL
OF FIVE HUNDRED thousand dollars per year UNDER PARAGRAPHS (C)  AND  (D)
OF  THIS  SUBDIVISION  AND  ONE  HUNDRED THOUSAND DOLLARS PER YEAR UNDER
PARAGRAPH (E) OF THIS SUBDIVISION.  If the taxpayer is a  partner  in  a
partnership  or  shareholder of a New York S corporation, then the limit

S. 6838                             5

imposed by the preceding sentence shall be applied at the entity  level,
so that the aggregate credit allowed PER QUALIFIED SITE to all the part-
ners  or  shareholders  of each such entity in the taxable year does not
exceed  [two  hundred  and fifty] FIVE HUNDRED thousand dollars PER YEAR
UNDER PARAGRAPHS (C) AND (D) OF THIS SUBDIVISION AND ONE  HUNDRED  THOU-
SAND DOLLARS PER YEAR UNDER PARAGRAPH (E) OF THIS SUBDIVISION.
  (g)  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 subdi-
vision for any taxable year reduces the tax to such amount,  any  amount
of  credit  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 ten hundred eighty-six of this chapter. Provided,
however, the provisions of subsection (c) of section ten hundred  eight-
y-eight of this chapter notwithstanding, no interest shall be paid ther-
eon.
  [(h) The credit allowed under this subdivision shall not be applicable
for  taxable  years  beginning  on  or after January first, two thousand
twelve.]
  S 2. Subsection (nn) of section 606 of the  tax  law,  as  amended  by
section  1-a of part A of chapter 63 of the laws of 2005, paragraph 6 as
amended by section 3 of part A of chapter 57 of the  laws  of  2010,  is
amended to read as follows:
  (nn)  Qualified emerging technology company facilities, operations and
training credit. (1) A taxpayer that is a MEMBER OF AN ENTITY CONSISTING
OF ONE OR MORE TAXPAYERS THAT MEETS THE CRITERIA OF  BEING  A  qualified
emerging  technology company pursuant to the provisions of section thir-
ty-one hundred two-e (and specifically for the activities referenced  in
paragraph  (b)  of  subdivision  one  of such section thirty-one hundred
two-e) of the public authorities law, and  that  meets  the  eligibility
requirements  in  paragraph  two  of this subsection, shall be allowed a
credit against the tax imposed by this article.  The  amount  of  credit
shall be equal to the sum (or pro rata share of the sum in the case of a
partnership)  of  the  amounts  specified in paragraphs three, four, and
five of this subsection, subject to the limitations in paragraph six  of
this subsection.
  (2) An eligible taxpayer shall (i) have no more than one hundred full-
time  employees,  of which at least seventy-five percent are employed in
New York state, EXCEPT AS OTHERWISE PROVIDED IN THIS PARAGRAPH,
  (ii) have a ratio of research and development funds to net  sales,  as
referred  to  in section thirty-one hundred two-e of the public authori-
ties law, which equals or exceeds six percent during its  taxable  year,
and
  (iii) have gross revenues, along with the gross revenues of its affil-
iates  and related members, not exceeding [twenty] FORTY million dollars
for the taxable year immediately preceding  the  year  the  taxpayer  is
allowed  a credit under this subsection. For purposes of this paragraph,
the term "related member" shall have the same meaning as  set  forth  in
clauses  (A) and (B) of subparagraph one of paragraph (o) of subdivision
[9] NINE of section two hundred eight of  this  chapter,  and  the  term
"affiliates"  shall mean those corporations that are members of the same
affiliated group (as defined in section  fifteen  hundred  four  of  the
internal  revenue  code)  as the taxpayer.  FOR PURPOSES OF SUBPARAGRAPH
(I) OF THIS PARAGRAPH, EMPLOYEES WHO ARE  EMPLOYED  OUTSIDE  THE  UNITED
STATES  DURING THE TAXABLE YEAR SHALL NOT BE CONSIDERED; A TAXPAYER THAT

S. 6838                             6

MEETS THE EMPLOYMENT REQUIREMENTS IN SUBPARAGRAPH (I) OF THIS  PARAGRAPH
IN  THE  FIRST  YEAR  IN  WHICH THE CREDIT ALLOWED BY THIS SUBSECTION IS
CLAIMED WILL NOT BE CONSIDERED INELIGIBLE SOLELY AS A RESULT  OF  HAVING
MORE  THAN  ONE  HUNDRED  FULL-TIME  EMPLOYEES IN OTHER TAXABLE YEARS IN
WHICH THE CREDIT IS CLAIMED, PROVIDED AT LEAST SEVENTY-FIVE  PERCENT  OF
THE  FULL-TIME  EMPLOYEES IN THE OTHER TAXABLE YEARS ARE EMPLOYED IN NEW
YORK STATE; AND AN INDIVIDUAL WHO IS A PARTNER IN A PARTNERSHIP THAT  IS
A  QUALIFIED  EMERGING TECHNOLOGY COMPANY WILL BE CONSIDERED A FULL-TIME
EMPLOYEE IF THE INDIVIDUAL PARTNER PARTICIPATES IN THE PARTNERSHIP ON  A
FULL-TIME BASIS DURING THE TAXABLE YEAR AND THE INVOLVEMENT OF THE INDI-
VIDUAL  PARTNER  IN THE ACTIVITIES OF THE PARTNERSHIP DURING THE TAXABLE
YEAR SATISFIES THE REQUIREMENTS FOR MATERIAL PARTICIPATION FOR THE  SAME
TAXABLE  YEAR WITHIN THE MEANING OF SUBSECTION (H) OF SECTION 469 OF THE
INTERNAL REVENUE CODE.
  (3) An eligible taxpayer shall be  allowed  a  credit  for  [eighteen]
THIRTY  per  centum  of  the  cost  or [other] SIMILAR basis for federal
income tax purposes of research and development property as  defined  in
subparagraph (B) of paragraph two of subsection (a) of this section that
is  acquired by the taxpayer by purchase as defined in section 179(d) of
the internal revenue code and is placed in service  during  the  taxable
year.  Provided,  however,  for  the purposes of this paragraph only, an
eligible taxpayer shall be allowed a credit for such percentage  of  the
(i)  cost or [other] SIMILAR basis for federal income purposes for prop-
erty used in the testing or inspection of materials and products,
  (ii) the costs or expenses associated  with  quality  control  of  the
research and development,
  (iii)  fees  for  use of sophisticated technology facilities and proc-
esses, and
  (iv) fees for production or eventual commercial distribution of  mate-
rials and products resulting from the activities of an eligible taxpayer
as long as such activities fall under the activities listed in paragraph
(b) of subdivision one of section thirty-one hundred two-e of the public
authorities law. The costs, expenses and other amounts for which a cred-
it  is allowed and claimed under this paragraph shall not be used in the
calculation of any other credit allowed under this article.
  (4) An eligible taxpayer shall be allowed a credit for  [nine  percen-
tum]  FIFTEEN  PER  CENTUM  of  "qualified  research  expenses", paid or
incurred by the  taxpayer  in  the  taxable  year.  "Qualified  research
expenses"  shall mean expenses associated with in-house research, use of
sophisticated technology facilities and processes, and costs  associated
with  the  dissemination  of  the  results of the products that directly
result from such research and development activities; provided, however,
that such costs shall  not  include  advertising  or  promotion  through
media.  In  addition,  costs  associated  with the preparation of patent
applications, patent application  filing  fees,  patent  research  fees,
patent examinations fees, patent post allowance fees, patent maintenance
fees, and grant application expenses and fees shall be eligible for such
credit.  In  no case shall the credit allowed by this paragraph apply to
expenses for litigation or the challenge of another entity's intellectu-
al property rights, or for  contract  expenses  involving  outside  paid
consultants.
  (5) An eligible taxpayer shall be allowed a credit for qualified high-
technology  training expenditures as described in this paragraph paid or
incurred by the taxpayer.
  (a) The amount of credit shall be one hundred percent of the  training
expenses  described  in subparagraph (c) of this paragraph, subject to a

S. 6838                             7

limitation of no more than four thousand dollars per employee  per  year
for such training expenses.
  (b)  Qualified  high-technology  training  shall  include  a course or
courses taken and satisfactorily completed by an employee of the taxpay-
er at an accredited, degree granting post-secondary college or universi-
ty in New York state that
  (i) directly relates to the activities referred to in paragraph (b) of
subdivision one of  section  thirty-one  hundred  two-e  of  the  public
authorities law, and
  (ii)  is  intended  to upgrade, retrain or improve the productivity or
theoretical awareness of  the  employee.  Such  course  or  courses  may
include,  but  are  not  limited to, instruction or research relating to
techniques, meta, macro, or  micro-theoretical  or  practical  knowledge
bases or frontiers, or ethical concerns related to such activities. Such
course  or  courses  shall  not  include  classes  in the disciplines of
management, accounting or the law or any class designed to  fulfill  the
discipline  specific  requirements of a degree program at the associate,
baccalaureate, graduate or  professional  level  of  these  disciplines.
Satisfactory  completion  of  a course or courses shall mean the earning
and granting of credit or equivalent unit,  with  the  attainment  of  a
grade of "B" or higher in a graduate level course or courses, a grade of
"C"  or higher in an undergraduate level course or courses, or a similar
measure of competency for a course that is not measured according  to  a
standard grade formula.
  (c)  Qualified  high-technology  training  expenditures  shall include
expenses for tuition and mandatory fees, and software  required  by  the
institution,  fees  for  textbooks  or  other literature required by the
institution offering the course or courses,  minus  applicable  scholar-
ships  and  tuition  or  fee  waivers not granted by the taxpayer or any
affiliate of the taxpayer, paid or reimbursed by the taxpayer.    Quali-
fied high technology expenditures do not include room and board, comput-
er  hardware  or  software  not specifically assigned for such course or
courses, late-charges, fines or membership dues  and  similar  expenses.
Such qualified expenditures shall not be eligible for the credit allowed
by  this  subsection  unless  the employee for whom the expenditures are
disbursed is continuously employed by the taxpayer in a full-time, full-
year position primarily located at a qualified site during the period of
such coursework and lasting through at least one  hundred  [and]  eighty
days  after  the  satisfactory completion of the qualifying course-work.
Qualified  high-technology  training  expenditures  shall  not   include
expenses  for  in  house  or shared training outside of a New York state
higher education institution or the use of consultants outside of credit
granting courses whether such consultants function inside of such higher
education institution or not.
  (d) If a taxpayer relocates from an academic business incubator facil-
ity partnered with an accredited  post-secondary  education  institution
located within New York state, which provides space and business support
services  to  taxpayers,  to  another  site, the credit provided in this
subsection shall be allowed for all expenditures referenced in  subpara-
graph  (c) of this paragraph paid or incurred in the two preceding taxa-
ble years that the taxpayer was located in such  an  incubator  facility
for  employees  of  the  taxpayer  who also relocate from said incubator
facility to such New York site and are employed and primarily located by
the taxpayer in New York. Such expenditures in the two  preceding  years
shall  be  added  to  the  amounts  otherwise  qualifying for the credit
provided by this subsection that were paid or incurred  in  the  taxable

S. 6838                             8

year that the taxpayer relocated from such a facility. Such expenditures
shall  include expenses paid or incurred for an eligible employee who is
a full-time, full-year employee of said taxpayer during the taxable year
that  the  taxpayer relocated from an incubator facility notwithstanding
(i) that such employee was employed full or  part-time  as  an  officer,
staff-person  or  paid  intern  of  the  taxpayer when such taxpayer was
located at such incubator facility or (ii) that such  employee  was  not
continuously  employed  when  such taxpayer was located at the incubator
facility during the one hundred eighty day period referenced in subpara-
graph (c) of this paragraph, provided such employee  received  wages  or
equivalent  income  for  at  least  seven hundred fifty hours during any
twenty-four month period when the taxpayer was located at the  incubator
facility.  Such  expenditures  shall  include  payments  made to such an
employee after the taxpayer has relocated from  the  incubator  facility
for  qualified  expenditures if such payments are made to reimburse such
an employee for qualified expenditures paid by the employee during  such
two  preceding  years. The credit provided under this subparagraph shall
be allowed, in any year that said  taxpayer  qualifies  as  an  eligible
taxpayer.
  (e)  For  purposes  of  this subsection the term "academic year" shall
mean the annual period  of  sessions  of  a  post-secondary  college  or
university.
  (f)  For  the purposes of this subsection the term "academic incubator
facility" shall mean a  facility  providing  low-cost  space,  technical
assistance,  support  services  and educational opportunities, including
but not limited to central services  provided  by  the  manager  of  the
facility  to  the  tenants  of the facility, to an entity located in New
York state. Such entity's primary activity must be an activity described
in paragraph (b) of subdivision one of section thirty-one hundred  two-e
of  the public authorities law, and such entity must be in the formative
stage of development. The academic incubator  facility  and  the  entity
must  act  in  partnership  with an accredited post-secondary college or
university located in New York state. An academic  incubator  facility's
mission  shall  be to promote job creation, entrepreneurship, technology
transfer, and provide support services to incubator tenants,  including,
but  not  limited  to,  business planning, management assistance, finan-
cial-packaging, linkages to financing services,  and  coordinating  with
other sources of assistance.
  (6)  An  eligible taxpayer may claim credits under this subsection for
four consecutive taxable years, except, if a taxpayer is located  in  an
academic  incubator  facility  and  relocates within New York state to a
nonacademic incubator site, then the taxpayer (i) may make  a  revocable
election to defer the credit provided under this subsection to the first
taxable  year  beginning  after  the taxpayer relocates from an academic
incubator facility, and (ii) shall be eligible for such credit for  five
consecutive  years.  In  no  case  shall  the  credit  allowed  by  this
subsection to a taxpayer exceed [two hundred fifty] FIVE  HUNDRED  thou-
sand dollars per year UNDER PARAGRAPHS THREE AND FOUR OF THIS SUBSECTION
AND  ONE  HUNDRED THOUSAND DOLLARS PER YEAR UNDER PARAGRAPH FIVE OF THIS
SUBSECTION.  If the taxpayer is a partner in a partnership or sharehold-
er of a New York S corporation, then the limit imposed by the  preceding
sentence  shall  be  applied  at the entity level, so that the aggregate
credit allowed PER QUALIFIED SITE to all the partners or shareholders of
each such entity in the taxable year does not exceed [two hundred fifty]
FIVE HUNDRED thousand dollars PER YEAR UNDER PARAGRAPHS THREE  AND  FOUR

S. 6838                             9

OF THIS SUBSECTION AND ONE HUNDRED THOUSAND DOLLARS PER YEAR UNDER PARA-
GRAPH FIVE OF THIS SUBSECTION.
  (7)  If  the  amount  of  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.
  [(8) The credit allowed under this subsection shall not be  applicable
for  taxable  years  beginning  on  or after January first, two thousand
twelve.]
  S 3. This act shall take effect immediately.