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

                                  4570

                       2013-2014 Regular Sessions

                          I N  A S S E M B L Y

                            February 6, 2013
                               ___________

Introduced  by M. of A. KOLB, OAKS, REILICH, WALTER, MONTESANO, PALMESA-
  NO, P. LOPEZ, RAIA, HAWLEY, BARCLAY, KEARNS, TENNEY -- Multi-Sponsored
  by -- M. of A. CERETTO, McLAUGHLIN -- read once and  referred  to  the
  Committee on Ways and Means

AN  ACT  to  amend the tax law, in relation to expanding eligibility for
  the investment tax credit to all businesses in the state (Part A);  to
  amend  the tax law, in relation to a qualified emerging technology tax
  credit (Part B); and to amend the general municipal law,  in  relation
  to  certified  startup business enterprises; and to amend the tax law,
  in relation to the angel tax credit (Part C)

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

  Section 1. This act enacts into law components of legislation relating
to  "Invest-NY".  Each component is wholly contained within a Part iden-
tified as Parts A through C. The  effective  date  for  each  particular
provision contained within such Part is set forth in the last section of
such Part. Any provision in any section contained within a Part, includ-
ing the effective date of the Part, which makes a reference to a section
"of  this  act", when used in connection with that particular component,
shall be deemed to mean and refer to the corresponding  section  of  the
Part  in  which  it  is  found. Section three of this act sets forth the
general effective date of this act.

                                 PART A

  Section 1. Subparagraph (i) of paragraph  (b)  of  subdivision  12  of
section  210  of  the  tax law, as amended by chapter 637 of the laws of
2008, is amended to read as follows:
  (i) A credit shall be allowed under this subdivision with  respect  to
tangible personal property and other tangible property, including build-
ings  and  structural  components  of  buildings, which are: depreciable

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05911-01-3
              

A. 4570                             2

pursuant to section one hundred  sixty-seven  of  the  internal  revenue
code, have a useful life of four years or more, are acquired by purchase
as  defined  in  section  one  hundred  seventy-nine (d) of the internal
revenue code, have a situs in this state and are (A) principally used by
the  taxpayer  in  the production of goods by manufacturing, processing,
assembling, refining, mining, extracting, farming,  agriculture,  horti-
culture, floriculture, viticulture or commercial fishing, (B) industrial
waste  treatment facilities or air pollution control facilities, used in
the taxpayer's trade or business, (C) research and development property,
(D) principally used in the ordinary course of the taxpayer's  trade  or
business  as  a broker or dealer in connection with the purchase or sale
(which shall include but not be limited to the issuance, entering  into,
assumption,  offset,  assignment,  termination,  or transfer) of stocks,
bonds or other securities as defined in section  four  hundred  seventy-
five  (c)(2)  of the Internal Revenue Code, or of commodities as defined
in section four hundred seventy-five (e) of the Internal  Revenue  Code,
(E)  principally  used in the ordinary course of the taxpayer's trade or
business of providing  investment  advisory  services  for  a  regulated
investment  company as defined in section eight hundred fifty-one of the
Internal Revenue Code, or lending, loan arrangement or loan  origination
services  to  customers  in  connection with the purchase or sale (which
shall include but not be limited to the issuance, entering into, assump-
tion, offset, assignment, termination, or  transfer)  of  securities  as
defined  in  section  four  hundred  seventy-five (c)(2) of the Internal
Revenue Code, (F) principally used in the ordinary course of the taxpay-
er's business  as  an  exchange  registered  as  a  national  securities
exchange  within the meaning of sections 3(a)(1) and 6(a) of the Securi-
ties Exchange Act of 1934 or a board of trade  as  defined  in  [section
1410(a)(1)  of the New York Not-for-Profit Corporation Law] SUBPARAGRAPH
ONE OF PARAGRAPH (A) OF SECTION FOURTEEN HUNDRED TEN OF THE NOT-FOR-PRO-
FIT CORPORATION LAW or as an entity that is wholly owned by one or  more
such  national securities exchanges or boards of trade and that provides
automation or technical services thereto, [or] (G) principally used as a
qualified film production facility including qualified  film  production
facilities  having a situs in an empire zone designated as such pursuant
to article eighteen-B of the general municipal law, where  the  taxpayer
is  providing  three  or  more services to any qualified film production
company using the facility, including such services as a studio lighting
grid, lighting and grip equipment, multi-line phone  service,  broadband
information  technology  access,  industrial  scale electrical capacity,
food services, security  services,  and  heating,  ventilation  and  air
conditioning,  OR  (H)  PRINCIPALLY  USED  IN THE ORDINARY COURSE OF ANY
TRADE OR BUSINESS OF THE TAXPAYER NOT OTHERWISE DESCRIBED IN CLAUSES (A)
THROUGH (G) OF THIS SUBPARAGRAPH.  For purposes of clauses (D), (E)  and
(F)  of  this  subparagraph, property purchased by a taxpayer affiliated
with a regulated broker, dealer, registered investment adviser, national
securities exchange or board of trade, is allowed a  credit  under  this
subdivision  if the property is used by its affiliated regulated broker,
dealer, registered investment adviser, national securities  exchange  or
board  of  trade  in  accordance  with this subdivision. For purposes of
determining if the property is principally used in qualifying uses,  the
uses  by  the taxpayer described in clauses (D) and (E) of this subpara-
graph may be aggregated. In addition, the  uses  by  the  taxpayer,  its
affiliated  regulated  broker, dealer, and registered investment adviser
under either or both of those clauses  may  be  aggregated.    Provided,
however,  a taxpayer shall not be allowed the credit provided by clauses

A. 4570                             3

(D), (E) and (F) of this subparagraph unless (I) eighty percent or  more
of  the  employees  performing  the administrative and support functions
resulting from or related to the qualifying uses of such  equipment  are
located  in  this  state  or  (II)  the average number of employees that
perform the administrative  and  support  functions  resulting  from  or
related to the qualifying uses of such equipment and are located in this
state  during  the taxable year for which the credit is claimed is equal
to or greater than ninety-five percent of the average number of  employ-
ees  that  perform  these functions and are located in this state during
the thirty-six months immediately preceding the year for which the cred-
it is claimed, or (III) the number of employees located  in  this  state
during  the  taxable year for which the credit is claimed is equal to or
greater than ninety percent of the number of employees located  in  this
state on December thirty-first, nineteen hundred ninety-eight or, if the
taxpayer  was  not  a calendar year taxpayer in nineteen hundred ninety-
eight, the last day of its first  taxable  year  ending  after  December
thirty-first,  nineteen  hundred  ninety-eight.  If the taxpayer becomes
subject to tax in this state after the taxable year beginning  in  nine-
teen  hundred ninety-eight, then the taxpayer is not required to satisfy
the employment test provided in the preceding sentence of this  subpara-
graph  for  its first taxable year. For purposes of clause (III) of this
subparagraph the employment test will be based on the number of  employ-
ees  located in this state on the last day of the first taxable year the
taxpayer is subject to tax in this state. If the uses  of  the  property
must be aggregated to determine whether the property is principally used
in  qualifying  uses, then either each affiliate using the property must
satisfy this employment test or this employment test must  be  satisfied
through the aggregation of the employees of the taxpayer, its affiliated
regulated  broker,  dealer,  and registered investment adviser using the
property. For purposes of this subdivision, the term "goods"  shall  not
include electricity.
  S  2. Subparagraph (A) of paragraph 2 of subsection (a) of section 606
of the tax law, as amended by chapter  637  of  the  laws  of  2008,  is
amended to read as follows:
  (A)  A  credit  shall be allowed under this subsection with respect to
tangible personal property and other tangible property, including build-
ings and structural components  of  buildings,  which  are:  depreciable
pursuant  to  section  one  hundred  sixty-seven of the internal revenue
code, have a useful life of four years or more, are acquired by purchase
as defined in section one  hundred  seventy-nine  (d)  of  the  internal
revenue code, have a situs in this state and are (i) principally used by
the  taxpayer  in  the production of goods by manufacturing, processing,
assembling, refining, mining, extracting, farming,  agriculture,  horti-
culture,  floriculture,  viticulture  or commercial fishing, (ii) indus-
trial waste treatment facilities or air  pollution  control  facilities,
used in the taxpayer's trade or business, (iii) research and development
property, (iv) principally used in the ordinary course of the taxpayer's
trade  or business as a broker or dealer in connection with the purchase
or sale (which shall include but not be limited to the issuance,  enter-
ing  into,  assumption, offset, assignment, termination, or transfer) of
stocks, bonds or other securities as defined  in  section  four  hundred
seventy-five  (c)(2)  of the Internal Revenue Code, or of commodities as
defined in section 475(e) of the Internal Revenue Code, (v)  principally
used  in  the  ordinary  course  of  the taxpayer's trade or business of
providing investment advisory services for a regulated investment compa-
ny as defined in section eight hundred fifty-one of the Internal Revenue

A. 4570                             4

Code, or lending, loan  arrangement  or  loan  origination  services  to
customers  in  connection with the purchase or sale (which shall include
but not be limited to the issuance, entering into,  assumption,  offset,
assignment,  termination,  or  transfer)  of  securities  as  defined in
section four hundred seventy-five (c)(2) of the Internal  Revenue  Code,
[or]  (vi)  principally  used  as  a  qualified film production facility
including qualified film production facilities  having  a  situs  in  an
empire  zone  designated  as  such pursuant to article eighteen-B of the
general municipal law, where the taxpayer is  providing  three  or  more
services  to  any  qualified film production company using the facility,
including such services as a studio lighting  grid,  lighting  and  grip
equipment,  multi-line  phone  service, broadband information technology
access, industrial scale electrical capacity,  food  services,  security
services,  and heating, ventilation and air conditioning, OR (VII) PRIN-
CIPALLY USED IN THE ORDINARY COURSE OF ANY  TRADE  OR  BUSINESS  OF  THE
TAXPAYER  NOT  OTHERWISE  DESCRIBED  IN CLAUSES (I) THROUGH (VI) OF THIS
SUBPARAGRAPH.  For purposes of clauses (iv) and  (v)  of  this  subpara-
graph,  property  purchased  by  a  taxpayer affiliated with a regulated
broker, dealer, or registered investment adviser  is  allowed  a  credit
under  this  subsection  if the property is used by its affiliated regu-
lated broker, dealer or registered investment adviser in accordance with
this subsection. For purposes of determining if the property is  princi-
pally  used  in  qualifying  uses, the uses by the taxpayer described in
clauses (iv) and (v) of this subparagraph may be  aggregated.  In  addi-
tion,  the uses by the taxpayer, its affiliated regulated broker, dealer
and registered investment adviser under either or both of those  clauses
may  be  aggregated.  Provided, however, a taxpayer shall not be allowed
the credit provided by clauses (iv) and (v) of this subparagraph  unless
(I)  eighty  percent or more of the employees performing the administra-
tive and support functions resulting from or related to  the  qualifying
uses  of  such  equipment are located in this state, or (II) the average
number of employees that perform the administrative  and  support  func-
tions resulting from or related to the qualifying uses of such equipment
and  are  located  in  this  state during the taxable year for which the
credit is claimed is equal to or greater than ninety-five percent of the
average number of employees that perform these functions and are located
in this state during the thirty-six  months  immediately  preceding  the
year  for  which the credit is claimed, or (III) the number of employees
located in this state during the taxable year for which  the  credit  is
claimed  is  equal  to  or  greater than ninety percent of the number of
employees located in  this  state  on  December  thirty-first,  nineteen
hundred ninety-eight or, if the taxpayer was not a calendar year taxpay-
er  in  nineteen hundred ninety-eight, the last day of its first taxable
year ending after December thirty-first, nineteen hundred  ninety-eight.
If  the  taxpayer becomes subject to tax in this state after the taxable
year beginning in nineteen hundred ninety-eight, then  the  taxpayer  is
not  required  to  satisfy the employment test provided in the preceding
sentence of this subparagraph  for  its  first  taxable  year.  For  the
purposes  of  clause (III) of this subparagraph the employment test will
be based on the number of employees located in this state  on  the  last
day  of  the  first  taxable year the taxpayer is subject to tax in this
state. If the uses of the  property  must  be  aggregated  to  determine
whether the property is principally used in qualifying uses, then either
each  affiliate  using the property must satisfy this employment test or
this employment test must be satisfied through the  aggregation  of  the
employees  of the taxpayer, its affiliated regulated broker, dealer, and

A. 4570                             5

registered investment adviser using the property. For purposes  of  this
subsection, the term "goods" shall not include electricity.
  S 3. This act shall take effect immediately and apply to taxable years
ending on or after January 1, 2013.

                                 PART B

  Section 1. Paragraph (a) of 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, is amended to read as follows:
  (a) A taxpayer that is a qualified emerging technology company  pursu-
ant  to the provisions of section thirty-one hundred two-e [(and specif-
ically 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 (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  subdivision
subject to the limitations in paragraph (f) of this subdivision.
  S  2. Paragraph (h) of 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,
is amended to read as follows:
  (h)  The credit allowed under this subdivision shall not be applicable
for taxable years beginning on or  after  January  first,  two  thousand
[twelve] FIFTEEN.
  S  3. Paragraph 1 of 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,  is
amended to read as follows:
  (1)  A taxpayer that is a qualified emerging technology company pursu-
ant to the provisions of section thirty-one hundred two-e [(and  specif-
ically 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 spec-
ified in paragraphs three, four, and five of this subsection, subject to
the limitations in paragraph six of this subsection.
  S  4. Paragraph 8 of 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,  is
amended to read as follows:
  (8)  The  credit allowed under this subsection shall not be applicable
for taxable years beginning on or  after  January  first,  two  thousand
[twelve] FIFTEEN.
  S  5.  This act shall take effect immediately, provided, however, that
sections one and three of this act shall apply to tax years beginning on
or after January 1, 2006.

                                 PART C

  Section 1. The general municipal  law  is  amended  by  adding  a  new
section 959-c to read as follows:
  S 959-C. CERTIFIED STARTUP BUSINESS ENTERPRISE. (A) CERTIFICATION. (I)
THE COMMISSIONER SHALL APPROVE APPLICATIONS FOR QUALIFICATION OF A BUSI-
NESS  ENTERPRISE AS A CERTIFIED STARTUP BUSINESS ENTERPRISE. AS A CONDI-
TION FOR APPROVAL OF SUCH APPLICATION, THE COMMISSIONER IS AUTHORIZED TO

A. 4570                             6

SPECIFY CERTAIN REQUIREMENTS TO BE SATISFIED AS A CONDITION FOR APPROVAL
OF A BUSINESS ENTERPRISE AS A CERTIFIED STARTUP BUSINESS  ENTERPRISE  AS
THE  COMMISSIONER DEEMS NECESSARY TO ENSURE THE QUALIFYING ANGEL INVEST-
MENT WILL MAKE A SUBSTANTIAL CONTRIBUTION TO THE ECONOMIC DEVELOPMENT OF
THIS  STATE,  INCLUDING  THE  USE  OF  A SYSTEM OF EVALUATION OF VARIOUS
APPLICANT BUSINESS ENTERPRISES IN A COMPETITIVE FASHION.
  (II) WITH RESPECT TO AN APPROVED APPLICATION FOR  QUALIFICATION  OF  A
BUSINESS  ENTERPRISE  AS  A  CERTIFIED  STARTUP BUSINESS ENTERPRISE, THE
COMMISSIONER SHALL ISSUE TO SUCH BUSINESS ENTERPRISE  A  CERTIFICATE  OF
QUALIFICATION  AS  A CERTIFIED STARTUP BUSINESS ENTERPRISE SETTING FORTH
THE EFFECTIVE DATE OF THE CERTIFICATION AND  THE  AMOUNT  OF  QUALIFYING
ANGEL INVESTMENT AWARDED TO SUCH BUSINESS ENTERPRISE, WHICH AMOUNT SHALL
BE  NO  LESS  THAN  ONE  HUNDRED  THOUSAND  DOLLARS AND NO MORE THAN TWO
MILLION DOLLARS.
  (III) FOR THE PERIOD JULY FIRST, TWO THOUSAND  THIRTEEN  THROUGH  JUNE
THIRTIETH,  TWO  THOUSAND  FOURTEEN,  THE COMMISSIONER MAY CERTIFY UP TO
TWENTY MILLION DOLLARS IN QUALIFYING ANGEL INVESTMENT.  FOR  THE  PERIOD
JULY  FIRST,  TWO THOUSAND FOURTEEN THROUGH JUNE THIRTIETH, TWO THOUSAND
FIFTEEN, THE COMMISSIONER MAY CERTIFY UP TO TWENTY  MILLION  DOLLARS  IN
QUALIFYING  ANGEL  INVESTMENT.  FOR  THE PERIOD JULY FIRST, TWO THOUSAND
FIFTEEN THROUGH JUNE THIRTIETH, TWO THOUSAND SIXTEEN,  THE  COMMISSIONER
MAY CERTIFY UP TO TWENTY MILLION DOLLARS IN QUALIFYING ANGEL INVESTMENT.
  (B)  DEFINITIONS.  AS  USED IN THIS SECTION, THE FOLLOWING TERMS SHALL
HAVE THE FOLLOWING MEANINGS:
  (I) "CERTIFIED STARTUP BUSINESS  ENTERPRISE"  SHALL  MEAN  A  BUSINESS
ENTERPRISE LOCATED IN NEW YORK STATE:
  (1) WITH LESS THAN FIVE MILLION DOLLARS IN ANNUAL REVENUES;
  (2)  WHOSE  PRIMARY  ACTIVITY  CONSISTS  OF A QUALIFYING TECHNOLOGY OR
INNOVATION ACTIVITY; AND
  (3) THAT HAS BEEN CERTIFIED AS A CERTIFIED STARTUP BUSINESS ENTERPRISE
BY THE COMMISSIONER.
  (II) "QUALIFYING TECHNOLOGY OR INNOVATION ACTIVITY" SHALL MEAN:
  (1) BIOTECHNOLOGIES, WHICH SHALL BE DEFINED AS TECHNOLOGIES  INVOLVING
THE  SCIENTIFIC  MANIPULATION  OF  LIVING  ORGANISMS,  ESPECIALLY AT THE
MOLECULAR AND/OR THE SUB-MOLECULAR GENETIC LEVEL,  TO  PRODUCE  PRODUCTS
CONDUCIVE  TO  IMPROVING  THE  LIVES  AND HEALTH OF PLANTS, ANIMALS, AND
HUMANS; AND THE ASSOCIATED SCIENTIFIC RESEARCH, PHARMACOLOGICAL, MECHAN-
ICAL, AND COMPUTATIONAL APPLICATIONS AND SERVICES CONNECTED  WITH  THESE
IMPROVEMENTS;
  (2)  INFORMATION AND COMMUNICATION TECHNOLOGIES, EQUIPMENT AND SYSTEMS
THAT INVOLVE ADVANCED  COMPUTER  SOFTWARE  AND  HARDWARE,  VISUALIZATION
TECHNOLOGIES, AND HUMAN INTERFACE TECHNOLOGIES;
  (3)  ADVANCED  MATERIALS  AND PROCESSING TECHNOLOGIES THAT INVOLVE THE
DEVELOPMENT, MODIFICATION, OR IMPROVEMENT OF ONE OR  MORE  MATERIALS  OR
METHODS  TO  PRODUCE  DEVICES  AND  STRUCTURES WITH IMPROVED PERFORMANCE
CHARACTERISTICS OR SPECIAL FUNCTIONAL ATTRIBUTES, OR TO ACTIVATE,  SPEED
UP, OR OTHERWISE ALTER CHEMICAL, BIOCHEMICAL, OR MEDICAL PROCESSES;
  (4)  ELECTRONIC AND PHOTONIC DEVICES AND COMPONENTS FOR USE IN PRODUC-
ING ELECTRONIC, OPTOELECTRONIC, MECHANICAL  EQUIPMENT  AND  PRODUCTS  OF
ELECTRONIC DISTRIBUTION WITH INTERACTIVE MEDIA CONTENT;
  (5)  ENERGY  EFFICIENCY,  RENEWABLE ENERGY AND ENVIRONMENTAL TECHNOLO-
GIES, PRODUCTS, DEVICES AND SERVICES;
  (6) SMALL SCALE SYSTEMS INTEGRATION AND PACKAGING; OR
  (7) MANUFACTURING;
  (III) "QUALIFYING ANGEL INVESTMENT" SHALL MEAN A CONTRIBUTION  TO  THE
CAPITAL  OF  A CERTIFIED STARTUP BUSINESS ENTERPRISE, PROVIDED THAT SUCH

A. 4570                             7

CONTRIBUTION TO CAPITAL IS MADE WITHIN TWELVE MONTHS AFTER THE EFFECTIVE
DATE OF THE CERTIFIED TECHNOLOGY VENTURE'S CERTIFICATE OF  QUALIFICATION
AS  A  CERTIFIED  TECHNOLOGY VENTURE AND SUCH CONTRIBUTION IS APPLIED BY
THE  CERTIFIED  STARTUP  BUSINESS  ENTERPRISE  AGAINST ITS ALLOCATION OF
QUALIFYING ANGEL INVESTMENT. TOGETHER WITH ALL  OTHER  QUALIFYING  ANGEL
INVESTMENTS  MADE TO A SINGLE CERTIFIED STARTUP BUSINESS ENTERPRISE, THE
TOTAL QUALIFYING ANGEL INVESTMENT MAY NOT EXCEED  TWO  MILLION  DOLLARS.
NOTHING HEREIN SHALL PROHIBIT A PERSON MAKING A QUALIFYING ANGEL INVEST-
MENT  FROM  MAKING ADDITIONAL CONTRIBUTIONS TO THE CAPITAL OF THE CERTI-
FIED STARTUP BUSINESS ENTERPRISE OR MAKING LOANS TO OR OTHER INVESTMENTS
IN THE CERTIFIED STARTUP BUSINESS ENTERPRISE,  PROVIDED,  HOWEVER,  THAT
SUCH  OTHER CONTRIBUTIONS, LOANS AND INVESTMENTS SHALL NOT BE TREATED AS
QUALIFYING ANGEL INVESTMENTS.
  S 2. Section 210 of the tax law is amended by adding a new subdivision
12-H to read as follows:
  12-H. ANGEL TAX CREDIT. (A) ALLOWANCE OF CREDIT. A TAXPAYER  THAT  HAS
MADE A QUALIFYING ANGEL INVESTMENT, AS SUCH TERM IS DEFINED IN PARAGRAPH
(III)  OF  SUBDIVISION  (B)  OF SECTION NINE HUNDRED FIFTY-NINE-C OF THE
GENERAL MUNICIPAL LAW, SHALL BE ALLOWED A CREDIT EQUAL TO FIFTY  PERCENT
OF THE AMOUNT OF SUCH QUALIFYING ANGEL INVESTMENT.
  (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.
  S  3. Section 606 of the tax law is amended by adding a new subsection
(vv) to read as follows:
  (VV) ANGEL TAX CREDIT. (1) ALLOWANCE OF CREDIT. A  TAXPAYER  THAT  HAS
MADE A QUALIFYING ANGEL INVESTMENT, AS SUCH TERM IS DEFINED IN PARAGRAPH
(III)  OF  SUBDIVISION  (B)  OF SECTION NINE HUNDRED FIFTY-NINE-C OF THE
GENERAL MUNICIPAL LAW, OR THAT IS A MEMBER OF  A  PARTNERSHIP  THAT  HAS
MADE  A  QUALIFYING ANGEL INVESTMENT, SHALL BE ALLOWED A CREDIT EQUAL TO
FIFTY PERCENT OF THE AMOUNT OF SUCH QUALIFYING ANGEL INVESTMENT  OR,  IN
THE  CASE OF A TAXPAYER WHO IS A MEMBER OF A PARTNERSHIP THAT HAS MADE A
QUALIFYING ANGEL INVESTMENT, A PORTION OF SUCH QUALIFYING ANGEL  INVEST-
MENT  EQUAL  TO THE PORTION OF ITEMS OF INCOME, GAIN, LOSS AND DEDUCTION
ASSOCIATED WITH THE QUALIFYING ANGEL INVESTMENT  PROPERLY  ALLOCABLE  TO
SUCH  TAXPAYER  UNDER  SECTION  704 OF THE INTERNAL REVENUE CODE FOR THE
TAXABLE YEAR.
  (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 4. Section 1456 of the tax law is amended by adding a new subsection
(z) to read as follows:
   (Z) ANGEL TAX CREDIT. (1) ALLOWANCE OF CREDIT. A  TAXPAYER  THAT  HAS
MADE A QUALIFYING ANGEL INVESTMENT, AS SUCH TERM IS DEFINED IN PARAGRAPH
(III)  OF  SUBDIVISION  (B)  OF SECTION NINE HUNDRED FIFTY-NINE-C OF THE

A. 4570                             8

GENERAL MUNICIPAL LAW, SHALL BE ALLOWED A CREDIT EQUAL TO FIFTY  PERCENT
OF THE AMOUNT OF SUCH QUALIFYING ANGEL INVESTMENT.
  (2)  APPLICATION  OF  CREDIT. THE CREDIT ALLOWED UNDER THIS SUBSECTION
FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO  LESS
THAN THE MINIMUM TAX FIXED BY SUBSECTION (B) OF SECTION FOURTEEN HUNDRED
FIFTY-FIVE  OF  THIS  ARTICLE.  HOWEVER, IF THE AMOUNT OF CREDIT ALLOWED
UNDER THIS SUBSECTION FOR ANY TAXABLE  YEAR  REDUCES  THE  TAX  TO  SUCH
AMOUNT,  THEN  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 5. Section 1511 of the tax law is amended by adding a  new  subdivi-
sion (cc) to read as follows:
  (CC)  ANGEL  TAX  CREDIT. (1) ALLOWANCE OF CREDIT. A TAXPAYER THAT HAS
MADE A QUALIFYING ANGEL INVESTMENT, AS SUCH TERM IS DEFINED IN PARAGRAPH
(III) OF SUBDIVISION (B) OF SECTION NINE  HUNDRED  FIFTY-NINE-C  OF  THE
GENERAL  MUNICIPAL LAW, SHALL BE ALLOWED A CREDIT EQUAL TO FIFTY PERCENT
OF THE AMOUNT OF SUCH QUALIFYING ANGEL INVESTMENT.
  (2) 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 MINIMUM TAX FIXED BY  PARAGRAPH  FOUR  OF  SUBDIVISION  (A)  OF
SECTION  FIFTEEN  HUNDRED  TWO  OF  THIS  ARTICLE  OR BY SECTION FIFTEEN
HUNDRED TWO-A OF THIS ARTICLE, WHICHEVER IS APPLICABLE. HOWEVER, IF  THE
AMOUNT  OF  CREDIT  ALLOWED  UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR
REDUCES THE TAX TO SUCH AMOUNT, THEN  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 6. This act shall take effect immediately.
  S 2. Severability. If any clause, sentence, paragraph, section or part
of  this act shall be adjudged by any court of competent jurisdiction to
be invalid and after exhaustion of  all  further  judicial  review,  the
judgment  shall not affect, impair, or invalidate the remainder thereof,
but shall be confined in its operation to the  clause,  sentence,  para-
graph,  section or part of this act directly involved in the controversy
in which the judgment shall have been rendered.
  S 3. This act shall take effect immediately  provided,  however,  that
the  applicable effective date of Parts A through C of this act shall be
as specifically set forth in the last section of such Parts.