Senate Bill S1472A

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

                                 1472--A

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 9, 2013
                               ___________

Introduced  by  Sen.  PARKER -- read twice and ordered printed, and when
  printed to be committed to the Committee on Investigations and Govern-
  ment Operations -- recommitted to the Committee on Investigations  and
  Government  Operations  in  accordance  with  Senate Rule 6, sec. 8 --
  committee discharged, bill amended, ordered reprinted as  amended  and
  recommitted to said committee

AN ACT to amend the tax law, in relation to providing for direct private
  assistance  to  emerging  technology  companies through the trading of
  their existing but unused research and development credits  and  their
  existing  but  unused net operating loss deductions to existing corpo-
  rations and partnerships in return for private assistance

  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 "Small New York Based High-Technology Business Investment Tax Credit
Act".
  S 2. The tax law is amended by adding a new section  212  to  read  as
follows:
  S  212. CORPORATION BUSINESS TAX BENEFIT CERTIFICATE TRANSFER PROGRAM.
1. (A) THE DEPARTMENT SHALL ESTABLISH A CORPORATION BUSINESS TAX BENEFIT
CERTIFICATE TRANSFER PROGRAM TO ALLOW NEW OR EXPANDING EMERGING TECHNOL-
OGY AND BIOTECHNOLOGY COMPANIES IN THIS STATE HAVING UNUSED  AMOUNTS  OF
RESEARCH  AND  DEVELOPMENT  TAX  CREDITS OTHERWISE ALLOWABLE PURSUANT TO
SUBPARAGRAPH (I) OF PARAGRAPH (B) OF SUBDIVISION TWELVE OF  SECTION  TWO
HUNDRED  TEN  OF  THIS ARTICLE, WHICH CANNOT BE APPLIED FOR THE CREDIT'S
TAX YEAR, AND UNUSED NET OPERATING LOSS CARRYOVERS PURSUANT TO PARAGRAPH
(F) OF SUBDIVISION NINE OF SECTION TWO HUNDRED EIGHT OF THIS ARTICLE  TO
SURRENDER  THOSE  TAX BENEFITS FOR USE BY OTHER CORPORATIONS ESTABLISHED
UNDER THE BUSINESS CORPORATION LAW AND SUBJECT TO THE PROVISIONS OF THIS
ARTICLE IN EXCHANGE FOR PRIVATE  FINANCIAL  ASSISTANCE  TO  BE  PROVIDED

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

                                                           LBD02888-02-4

S. 1472--A                          2

THOSE  TAXPAYERS  OR  EXPANDING  EMERGING  TECHNOLOGY  AND BIOTECHNOLOGY
COMPANIES. SUCH TAXPAYERS SHALL BE PROVIDED WITH A CORPORATION  BUSINESS
TAX BENEFIT CERTIFICATE TO BE DEVELOPED BY THE COMMISSIONER.
  (B) THE COMMISSIONER, IN COOPERATION WITH THE COMMISSIONER OF ECONOMIC
DEVELOPMENT,  SHALL  REVIEW AND APPROVE APPLICATIONS BY NEW OR EXPANDING
EMERGING TECHNOLOGY AND BIOTECHNOLOGY COMPANIES  IN  THIS  STATE  HAVING
UNUSED  BUT  OTHERWISE  ALLOWABLE CARRYOVERS OF RESEARCH AND DEVELOPMENT
TAX CREDITS AND OTHERWISE ALLOWABLE NET OPERATING LOSS CARRYOVERS PURSU-
ANT TO SUBPARAGRAPH (I)  OF  PARAGRAPH  (B)  OF  SUBDIVISION  TWELVE  OF
SECTION TWO HUNDRED TEN OF THIS ARTICLE AND PARAGRAPH (F) OF SUBDIVISION
NINE  OF SECTION TWO HUNDRED EIGHT, RESPECTIVELY, TO SURRENDER THOSE TAX
BENEFITS IN EXCHANGE FOR PRIVATE FINANCIAL ASSISTANCE TO BE  MADE  TO  A
CORPORATION FILING PURSUANT TO THIS ARTICLE, WHICH HAS OBTAINED A CORPO-
RATION  BUSINESS  TAX BENEFIT CERTIFICATE IN AN AMOUNT EQUAL TO AT LEAST
SEVENTY-FIVE PERCENT OF THE AMOUNT OF THE SURRENDERED TAX BENEFITS.
  (C) THE COMMISSIONER SHALL CALCULATE THE VALUE OF  THE  NET  OPERATING
LOSS  CARRYOVER  FOR  PURPOSES  OF  THE BENEFIT CERTIFICATE EQUAL TO THE
AMOUNT  OF  THE  CARRYOVER  TIMES  THE  APPLICABLE  BUSINESS  ALLOCATION
PERCENTAGE  AND  TAX  RATE  OF  THE EMERGING TECHNOLOGY OR BIOTECHNOLOGY
COMPANY.
  (D) THE COMMISSIONER, IN COOPERATION WITH THE COMMISSIONER OF ECONOMIC
DEVELOPMENT, SHALL REVIEW AND APPROVE APPLICATIONS BY TAXPAYERS PURSUANT
TO THE PROVISIONS OF THIS ARTICLE TO ACQUIRE  SURRENDERED  TAX  BENEFITS
APPROVED  PURSUANT  TO PARAGRAPH (B) OF THIS SUBDIVISION, WHICH SHALL BE
ISSUED IN THE FORM OF CORPORATION BUSINESS TAX BENEFIT TRANSFER  CERTIF-
ICATES,  IN  EXCHANGE FOR PRIVATE FINANCIAL ASSISTANCE TO BE MADE BY THE
TAXPAYER IN AN AMOUNT EQUAL TO AT  LEAST  SEVENTY-FIVE  PERCENT  OF  THE
AMOUNT  OF  THE  SURRENDERED  TAX  BENEFIT  OF AN EMERGING TECHNOLOGY OR
BIOTECHNOLOGY COMPANY IN THE STATE.  THE  PRIVATE  FINANCIAL  ASSISTANCE
SHALL  ASSIST IN FUNDING EXPENSES INCURRED IN CONNECTION WITH THE OPERA-
TION OF A NEW OR EXPANDING EMERGING TECHNOLOGY OR BIOTECHNOLOGY  COMPANY
IN THE STATE, INCLUDING BUT NOT LIMITED TO THE EXPENSES OF FIXED ASSETS,
SUCH AS THE CONSTRUCTION AND ACQUISITION AND DEVELOPMENT OF REAL ESTATE,
MATERIALS,   START-UP,   TENANT   FIT-OUT,  WORKING  CAPITAL,  SALARIES,
RESEARCH, AND DEVELOPMENT EXPENDITURES.
  (E) THE COMMISSIONER SHALL COORDINATE THE APPLICATIONS, IN CONJUNCTION
WITH THE DEPARTMENT OF ECONOMIC DEVELOPMENT, FOR SURRENDER AND  ACQUISI-
TION  OF  UNUSED  BUT  OTHERWISE ALLOWABLE TAX BENEFITS PURSUANT TO THIS
SECTION IN A MANNER THAT CAN BEST STIMULATE AND ENCOURAGE THE  EXTENSION
OF PRIVATE FINANCIAL ASSISTANCE TO NEW AND EXPANDING EMERGING TECHNOLOGY
AND  BIOTECHNOLOGY COMPANIES IN THIS STATE INTO A WRITTEN AGREEMENT WITH
SUCH COMPANY CONCERNING THE TERMS AND CONDITIONS OF THE  PRIVATE  FINAN-
CIAL ASSISTANCE MADE IN EXCHANGE FOR THE CERTIFICATE. THE WRITTEN AGREE-
MENT  MAY CONTAIN TERMS CONCERNING THE MAINTENANCE BY THE NEW OR EXPAND-
ING EMERGING TECHNOLOGY OR BIOTECHNOLOGY COMPANY OF A HEADQUARTERS OR  A
BASE OF OPERATION IN THIS STATE.
  2. (A) A TAXPAYER THAT HAS ACQUIRED A CORPORATION BUSINESS TAX BENEFIT
CERTIFICATE PURSUANT TO THE PROVISIONS OF PARAGRAPH (B) OF THIS SUBDIVI-
SION THAT INCLUDES THE RIGHT TO A NET OPERATING LOSS CARRYOVER DEDUCTION
SHALL  ATTACH THAT CERTIFICATE TO ANY RETURN THE TAXPAYER IS REQUIRED TO
FILE  AND  SHALL  OTHERWISE  APPLY  THE  NET  OPERATING  LOSS  CARRYOVER
DEDUCTION AS EVIDENCED BY THE CERTIFICATE ACCORDING TO THE PROVISIONS OF
PARAGRAPH  (B) OF SUBDIVISION ONE OF THIS SECTION AND ANY RULES OR REGU-
LATIONS THE COMMISSIONER MAY ADOPT TO CARRY OUT THE PROVISIONS  OF  THIS
SECTION.

S. 1472--A                          3

  (B)  A  NEW  OR EXPANDING EMERGING TECHNOLOGY OR BIOTECHNOLOGY COMPANY
THAT HAS SURRENDERED AN UNUSED NET OPERATING LOSS CARRYOVER PURSUANT  TO
THE  PROVISIONS  OF  PARAGRAPH  (F)  OF  SUBDIVISION NINE OF SECTION TWO
HUNDRED EIGHT OF THIS ARTICLE SHALL NOT BE ALLOWED A NET OPERATING  LOSS
CARRYOVER  DEDUCTION  BASED  UPON  THE  RIGHT  TO  SUCH  A DEDUCTION, AS
EVIDENCED BY SUCH CORPORATION  BUSINESS  TAX  BENEFIT  CERTIFICATE,  AND
SHALL  ATTACH  A  COPY  OF THE CERTIFICATE TO ANY RETURN THE TAXPAYER IS
REQUIRED TO FILE.
  3. (A) A TAXPAYER THAT HAS ACQUIRED A CORPORATION BUSINESS TAX BENEFIT
CERTIFICATE PURSUANT TO SUBDIVISION ONE OF THIS  SECTION  THAT  INCLUDES
THE RIGHT TO A RESEARCH AND DEVELOPMENT TAX CREDIT CARRYOVER PURSUANT TO
SUBPARAGRAPH  (I)  OF PARAGRAPH (B) OF SUBDIVISION TWELVE OF SECTION TWO
HUNDRED TEN OF THIS ARTICLE SHALL ATTACH THAT CERTIFICATE TO ANY  RETURN
THE  TAXPAYER  IS  REQUIRED TO FILE AND SHALL OTHERWISE APPLY THE CREDIT
CARRYOVER, AS EVIDENCED BY THE CERTIFICATE, ACCORDING TO THE  PROVISIONS
OF  PARAGRAPH  (B)  OF  SUBDIVISION ONE OF THIS SECTION AND ANY RULES OR
REGULATIONS THE COMMISSIONER MAY ADOPT TO CARRY OUT  THE  PROVISIONS  OF
THIS SECTION.
  (B)  A  NEW  OR EXPANDING TECHNOLOGY OR BIOTECHNOLOGY COMPANY THAT HAS
SURRENDERED AN UNUSED RESEARCH  AND  DEVELOPMENT  TAX  CREDIT  CARRYOVER
SHALL  NOT  BE  ALLOWED  A RESEARCH AND DEVELOPMENT TAX CREDIT CARRYOVER
BASED UPON THE RIGHT TO SUCH A CREDIT CARRYOVER,  AS  EVIDENCED  BY  THE
CORPORATION BUSINESS TAX BENEFIT CERTIFICATE, AND SHALL ATTACH A COPY OF
THE CERTIFICATE TO ANY RETURN THE TAXPAYER IS REQUIRED TO FILE.
  4.  FOR  THE  PURPOSES  OF  THIS SECTION, THE FOLLOWING TERMS HAVE THE
FOLLOWING MEANINGS:
  (A) "ADVANCED COMPUTING" MEANS A TECHNOLOGY USED IN THE DESIGNING  AND
DEVELOPING  OF COMPUTING HARDWARE AND SOFTWARE, INCLUDING INNOVATIONS IN
DESIGNING THE FULL SPECTRUM OF HARDWARE FROM  HAND-HELD  CALCULATORS  TO
SUPER COMPUTERS, AND PERIPHERAL EQUIPMENT.
  (B)  "ADVANCED  MATERIALS"  MEANS MATERIALS WITH ENGINEERED PROPERTIES
CREATED THROUGH THE DEVELOPMENT OF SPECIALIZED PROCESSING AND  SYNTHESIS
TECHNOLOGY,  INCLUDING  CERAMICS,  HIGH  VALUE-ADDED  METALS, ELECTRONIC
MATERIALS, COMPOSITES, POLYMERS, AND BIOMATERIALS.
  (C) "BIOTECHNOLOGY" MEANS THE CONTINUALLY EXPANDING BODY OF  FUNDAMEN-
TAL  KNOWLEDGE  ABOUT  THE FUNCTION OF BIOLOGICAL SYSTEMS FROM THE MACRO
LEVEL TO THE MOLECULAR AND SUBATOMIC LEVELS, AS WELL AS NOVEL  PRODUCTS,
SERVICES,  TECHNOLOGIES,  AND  SUB-TECHNOLOGIES DEVELOPED AS A RESULT OF
INSIGHTS GAINED FROM RESEARCH ADVANCES WHICH ADD TO THAT BODY OF  FUNDA-
MENTAL KNOWLEDGE.
  (D) "CONTROL", WITH RESPECT TO A CORPORATION, MEANS OWNERSHIP, DIRECT-
LY  OR  INDIRECTLY,  OF  STOCK  POSSESSING EIGHTY PERCENT OR MORE OF THE
TOTAL COMBINED VOTING POWER OF ALL CLASSES OF THE STOCK  OF  THE  CORPO-
RATION  ENTITLED  TO VOTE; AND "CONTROL", WITH RESPECT TO A TRUST, MEANS
OWNERSHIP, DIRECTLY OR INDIRECTLY, OF EIGHTY  PERCENT  OR  MORE  OF  THE
BENEFICIAL  INTEREST IN THE PRINCIPAL OR INCOME OF THE TRUST. THE OWNER-
SHIP OF STOCK IN A CORPORATION, OF A CAPITAL OR PROFITS  INTEREST  IN  A
PARTNERSHIP OR ASSOCIATION, OR OF A BENEFICIAL INTEREST IN A TRUST SHALL
BE DETERMINED IN ACCORDANCE WITH THE RULES FOR CONSTRUCTIVE OWNERSHIP OF
STOCK  PROVIDED IN SUBSECTION (C) OF SECTION 267 OF THE FEDERAL INTERNAL
REVENUE CODE OF 1986, 26  U.S.C.  S267,  OTHER  THAN  PARAGRAPH  (3)  OF
SUBSECTION (C) OF SUCH SECTION.
  (E)  "CONTROLLED  GROUP"  MEANS  ONE  OR  MORE  CHAINS OF CORPORATIONS
CONNECTED THROUGH STOCK OWNERSHIP WITH A COMMON  PARENT  CORPORATION  IF
STOCK  POSSESSING  AT  LEAST  EIGHTY  PERCENT OF THE VOTING POWER OF ALL
CLASSES OF STOCK OF EACH OF THE CORPORATIONS IS OWNED DIRECTLY OR  INDI-

S. 1472--A                          4

RECTLY  BY  ONE  OR  MORE OF THE CORPORATIONS AND THE COMMON PARENT OWNS
DIRECTLY STOCK POSSESSING AT LEAST EIGHTY PERCENT OF THE VOTING POWER OF
ALL CLASSES OF STOCK OF AT LEAST ONE OF THE OTHER CORPORATIONS.
  (F) "ELECTRONIC DEVICE TECHNOLOGY" MEANS A TECHNOLOGY INVOLVING MICRO-
ELECTRONICS,  SEMICONDUCTORS, ELECTRONIC EQUIPMENT, AND INSTRUMENTATION,
RADIO FREQUENCY, MICROWAVE, AND MILLIMETER ELECTRONICS, AND OPTICAL  AND
OPTIC-ELECTRICAL DEVICES, OR DATA AND DIGITAL COMMUNICATIONS AND IMAGING
DEVICES.
  (G)  "ENVIRONMENTAL  TECHNOLOGY"  MEANS  ASSESSMENT  AND PREVENTION OF
THREATS OR DAMAGE TO HUMAN  HEALTH  OR  THE  ENVIRONMENT,  ENVIRONMENTAL
CLEANUP, OR THE DEVELOPMENT OF ALTERNATIVE ENERGY SOURCES.
  (H)  "MEDICAL  DEVICE  TECHNOLOGY"  MEANS  A  TECHNOLOGY INVOLVING ANY
MEDICAL EQUIPMENT OR PRODUCT (OTHER THAN A PHARMACEUTICAL PRODUCT)  THAT
HAS  THERAPEUTIC  VALUE,  DIAGNOSTIC VALUE, OR BOTH, AND IS REGULATED BY
THE FEDERAL FOOD AND DRUG ADMINISTRATION.
  (I) "PARTNERSHIP" MEANS A SYNDICATE, GROUP, POOL,  JOINT  VENTURE,  OR
OTHER UNINCORPORATED ORGANIZATION THROUGH OR BY MEANS OF WHICH ANY BUSI-
NESS,  FINANCIAL OPERATION, OR VENTURE IS CARRIED ON, AND WHICH IS NOT A
TRUST OR ESTATE, A CORPORATION, OR A SOLE PROPRIETORSHIP.
  (J) "PILOT SCALE MANUFACTURING" MEANS DESIGN, CONSTRUCTION, AND  TEST-
ING  OF  PREPRODUCTION  PROTOTYPES  AND MODELS IN THE FIELDS OF ADVANCED
COMPUTING, ADVANCED MATERIALS, BIOTECHNOLOGY, ELECTRONIC DEVICE TECHNOL-
OGY, ENVIRONMENTAL TECHNOLOGY, AND MEDICAL DEVICE TECHNOLOGY, OTHER THAN
FOR COMMERCIAL SALE, EXCLUDING SALES OF PROTOTYPES OR SALES  FOR  MARKET
TESTING,  IF  TOTAL  GROSS  RECEIPTS  FROM  SUCH  SALES  OF THE PRODUCT,
SERVICE, OR PROCESS DO NOT EXCEED ONE MILLION DOLLARS.
  (K) "QUALIFIED INVESTMENT" MEANS THE NON-REFUNDABLE INVESTMENT AT RISK
IN A SMALL NEW YORK-BASED HIGH TECHNOLOGY BUSINESS BY A TAXPAYER THAT IS
NOT A RELATED PERSON OF THE SMALL NEW YORK BASED  HIGH-TECHNOLOGY  BUSI-
NESS,  THE  TRANSFER  OF  WHICH  IS  IN CONNECTION WITH A TRANSACTION IN
EXCHANGE FOR STOCK, INTEREST IN PARTNERSHIPS OR JOINT VENTURES, LICENSES
(EXCLUSIVE OR NON-EXCLUSIVE), RIGHT TO USE TECHNOLOGY, MARKETING RIGHTS,
WARRANTS, OPTIONS, OR ANY ITEM SIMILAR TO THOSE INCLUDED IN  THIS  PARA-
GRAPH,  INCLUDING BUT NOT LIMITED TO OPTIONS OR RIGHTS TO ACQUIRE ANY OF
THE ITEMS INCLUDED IN THIS PARAGRAPH.
  (L) "QUALIFIED RESEARCH EXPENSES" MEANS QUALIFIED  RESEARCH  EXPENSES,
AS  DEFINED  IN SECTION 41 OF THE FEDERAL INTERNAL REVENUE CODE OF 1986,
26 U.S.C. S 41, AS IN EFFECT ON JUNE THIRTIETH, NINETEEN  HUNDRED  NINE-
TY-TWO,  IN  THE  FIELDS  OF  ENVIRONMENTAL TECHNOLOGY OR MEDICAL DEVICE
TECHNOLOGY.
  (M) "RELATED PERSON" MEANS:
  (1) A CORPORATION, PARTNERSHIP, ASSOCIATION, OR TRUST BY THE TAXPAYER;
  (2) AN INDIVIDUAL, CORPORATION,  PARTNERSHIP,  ASSOCIATION,  OR  TRUST
THAT IS IN THE CONTROL OF THE TAXPAYER;
  (3) A CORPORATION, PARTNERSHIP, ASSOCIATION, OR TRUST CONTROLLED BY AN
INDIVIDUAL,  CORPORATION,  PARTNERSHIP, ASSOCIATION, OR TRUST THAT IS IN
THE CONTROL OF THE TAXPAYER; OR
  (4) A MEMBER OF THE SAME CONTROLLED GROUP AS A TAXPAYER.
  (N) "SMALL NEW YORK BASED HIGH-TECHNOLOGY  BUSINESS"  MEANS  A  CORPO-
RATION  DOING BUSINESS EMPLOYING OR OWNING CAPITAL OR PROPERTY, OR MAIN-
TAINING AN OFFICE, IN THIS STATE THAT HAS  QUALIFIED  RESEARCH  EXPENSES
PAID  OR  INCURRED  FOR  RESEARCH  EXPENSES  CONDUCTED  IN THIS STATE OR
CONDUCTS PILOT SCALE MANUFACTURING IN THIS STATE, AND HAS FEWER THAN TWO
HUNDRED TWENTY-FIVE EMPLOYEES, OF  WHOM  SEVENTY-FIVE  PERCENT  ARE  NEW
YORK-BASED EMPLOYEES FILLING A POSITION OR JOB IN THIS STATE.

S. 1472--A                          5

  (O)  "TAX  YEAR"  MEANS  THE  FISCAL  OR CALENDAR ACCOUNTING YEAR OF A
TAXPAYER.
  S  3.  The tax law is amended by adding a new section 606-a to read as
follows:
  S 606-A. NONCORPORATION TAX BENEFIT CERTIFICATE TRANSFER PROGRAM.  (A)
(1)  THE  DEPARTMENT  SHALL ESTABLISH A CORPORATION BUSINESS TAX BENEFIT
CERTIFICATE TRANSFER PROGRAM TO ALLOW NEW OR EXPANDING EMERGING TECHNOL-
OGY AND BIOTECHNOLOGY COMPANIES IN THIS STATE HAVING UNUSED  AMOUNTS  OF
RESEARCH  AND  DEVELOPMENT  TAX  CREDITS OTHERWISE ALLOWABLE PURSUANT TO
SUBPARAGRAPH (A) OF PARAGRAPH TWO  OF  SUBSECTION  (A)  OF  SECTION  SIX
HUNDRED  SIX  OF  THIS ARTICLE, WHICH CANNOT BE APPLIED FOR THE CREDIT'S
TAX YEAR, AND UNUSED NET OPERATING LOSS CARRYOVER PURSUANT TO SUBSECTION
(B) OF SECTION SIX HUNDRED SEVENTEEN AND SUBSECTION (B) OF  SECTION  SIX
HUNDRED  THIRTY-THREE OF THIS ARTICLE TO SURRENDER SUCH TAX BENEFITS FOR
USE BY OTHER ENTITIES SUBJECT TO  THE  PROVISIONS  OF  THIS  ARTICLE  IN
EXCHANGE  FOR PRIVATE FINANCIAL ASSISTANCE TO BE PROVIDED SUCH TAXPAYERS
OR EXPANDING  EMERGING  TECHNOLOGY  AND  BIOTECHNOLOGY  COMPANIES.  SUCH
TAXPAYERS  SHALL  BE PROVIDED WITH A NONCORPORATION BUSINESS TAX BENEFIT
CERTIFICATE TO BE DEVELOPED BY THE COMMISSIONER.
  (2) THE COMMISSIONER, IN COOPERATION  WITH  THE  COMMISSIONER  OF  THE
DEPARTMENT  OF  ECONOMIC  DEVELOPMENT, SHALL REVIEW AND APPROVE APPLICA-
TIONS BY NEW OR EXPANDING TECHNOLOGY AND BIOTECHNOLOGY COMPANIES IN THIS
STATE HAVING UNUSED BUT OTHERWISE ALLOWABLE CARRYOVER  OF  RESEARCH  AND
DEVELOPMENT  TAX  CREDITS  AND  OTHERWISE  ALLOWABLE  NET OPERATING LOSS
CARRYOVERS PURSUANT TO EITHER  SUBPARAGRAPH  (A)  OF  PARAGRAPH  TWO  OF
SUBSECTION  (A)  OF SECTION SIX HUNDRED SIX OR SUBSECTION (B) OF SECTION
SIX  HUNDRED  SEVENTEEN  OR  SUBSECTION  (B)  OF  SECTION  SIX   HUNDRED
THIRTY-THREE OF THIS ARTICLE, RESPECTIVELY, TO SURRENDER THOSE TAX BENE-
FITS  IN  EXCHANGE  FOR  PRIVATE  FINANCIAL  ASSISTANCE  TO BE MADE TO A
TAXPAYER FILING PURSUANT TO THIS ARTICLE WHO HAS  OBTAINED  A  NONCORPO-
RATION  BUSINESS  TAX BENEFIT CERTIFICATE IN AN AMOUNT EQUAL TO AT LEAST
SEVENTY-FIVE PERCENT OF THE AMOUNT OF THE SURRENDERED TAX BENEFITS.
  (3) THE COMMISSIONER SHALL CALCULATE THE VALUE OF  THE  NET  OPERATING
LOSS  CARRYOVER  FOR  PURPOSES  OF  THE BENEFIT CERTIFICATE EQUAL TO THE
AMOUNT  OF  THE  CARRYOVER  TIMES  THE  APPLICABLE  BUSINESS  ALLOCATION
PERCENTAGE  AND  TAX  RATE  OF  THE EMERGING TECHNOLOGY OR BIOTECHNOLOGY
COMPANY.
  (4) THE COMMISSIONER, IN COOPERATION  WITH  THE  COMMISSIONER  OF  THE
DEPARTMENT  OF  ECONOMIC  DEVELOPMENT, SHALL REVIEW AND APPROVE APPLICA-
TIONS BY TAXPAYERS SUBJECT TO THE PROVISIONS OF THIS ARTICLE TO  ACQUIRE
SURRENDERED  TAX  BENEFITS  APPROVED  PURSUANT  TO PARAGRAPH TWO OF THIS
SUBSECTION, WHICH SHALL BE ISSUED IN THE FORM OF NONCORPORATION BUSINESS
TAX BENEFIT TRANSFER CERTIFICATES, IN  EXCHANGE  FOR  PRIVATE  FINANCIAL
ASSISTANCE  TO  BE  MADE  BY THE TAXPAYER IN AN AMOUNT EQUAL TO AT LEAST
SEVENTY-FIVE PERCENT OF THE AMOUNT OF THE SURRENDERED TAX BENEFIT OF  AN
EMERGING  TECHNOLOGY  OR BIOTECHNOLOGY COMPANY IN THE STATE. THE PRIVATE
FINANCIAL ASSISTANCE  SHALL  ASSIST  IN  FUNDING  EXPENSES  INCURRED  IN
CONNECTION  WITH THE OPERATION OF A NEW OR EXPANDING EMERGING TECHNOLOGY
OR BIOTECHNOLOGY COMPANY IN THE STATE, INCLUDING BUT NOT LIMITED TO  THE
EXPENSES  OF  FIXED ASSETS, SUCH AS THE CONSTRUCTION AND ACQUISITION AND
DEVELOPMENT OF REAL ESTATE, MATERIALS, START-UP, TENANT FIT-OUT, WORKING
CAPITAL, SALARIES, RESEARCH, AND DEVELOPMENT EXPENDITURES.
  (5) THE COMMISSIONER SHALL COORDINATE THE APPLICATIONS, IN CONJUNCTION
WITH THE DEPARTMENT OF ECONOMIC DEVELOPMENT, FOR SURRENDER AND  ACQUISI-
TION  OF  UNUSED  BUT  OTHERWISE ALLOWABLE TAX BENEFITS PURSUANT TO THIS
SECTION IN A MANNER THAT CAN BEST STIMULATE AND ENCOURAGE THE  EXTENSION

S. 1472--A                          6

OF PRIVATE FINANCIAL ASSISTANCE TO NEW AND EXPANDING EMERGING TECHNOLOGY
AND  BIOTECHNOLOGY COMPANIES IN THIS STATE INTO A WRITTEN AGREEMENT WITH
SUCH COMPANY CONCERNING THE TERMS AND CONDITIONS OF THE  PRIVATE  FINAN-
CIAL ASSISTANCE MADE IN EXCHANGE FOR THE CERTIFICATE. THE WRITTEN AGREE-
MENT  MAY CONTAIN TERMS CONCERNING THE MAINTENANCE BY THE NEW OR EXPAND-
ING EMERGING TECHNOLOGY OR BIOTECHNOLOGY COMPANY OF A HEADQUARTERS OR  A
BASE OF OPERATION IN THIS STATE.
  (B)(1)  A  TAXPAYER  THAT  HAS  ACQUIRED A NONCORPORATION BUSINESS TAX
BENEFIT CERTIFICATE PURSUANT TO  THE  PROVISIONS  OF  PARAGRAPH  TWO  OF
SUBSECTION  (A) OF THIS SECTION THAT INCLUDES THE RIGHT TO A NET OPERAT-
ING LOSS CARRYOVER DEDUCTION SHALL ATTACH THAT CERTIFICATE TO ANY RETURN
THE TAXPAYER IS REQUIRED TO FILE AND SHALL OTHERWISE APPLY THE NET OPER-
ATING LOSS CARRYOVER DEDUCTION, AS EVIDENCED BY THE CERTIFICATE, ACCORD-
ING TO THE PROVISIONS OF PARAGRAPH TWO OF SUBSECTION (A) OF THIS SECTION
AND ANY RULES OR REGULATIONS THE COMMISSIONER MAY ADOPT TO CARRY OUT THE
PROVISIONS OF THIS SECTION.
  (2) A NEW OR EXPANDING EMERGING TECHNOLOGY  OR  BIOTECHNOLOGY  COMPANY
THAT  HAS SURRENDERED AN UNUSED NET OPERATING LOSS CARRYOVER PURSUANT TO
THE PROVISIONS OF SUBSECTION (B) OF SECTION SIX  HUNDRED  SEVENTEEN  AND
SUBSECTION (B) OF SECTION SIX HUNDRED THIRTY-THREE OF THIS ARTICLE SHALL
NOT  BE  ALLOWED A NET OPERATING LOSS CARRYOVER DEDUCTION BASED UPON THE
RIGHT TO SUCH A DEDUCTION, AS EVIDENCED BY SUCH NONCORPORATION  BUSINESS
TAX  BENEFIT  CERTIFICATE, AND SHALL ATTACH A COPY OF THE CERTIFICATE TO
ANY RETURN THE TAXPAYER IS REQUIRED TO FILE.
  (C) (1) A TAXPAYER THAT HAS ACQUIRED  A  NONCORPORATION  BUSINESS  TAX
BENEFIT  CERTIFICATE  PURSUANT  TO  SUBSECTION  (A) OF THIS SECTION THAT
INCLUDES THE RIGHT TO A RESEARCH AND DEVELOPMENT  TAX  CREDIT  CARRYOVER
SHALL  ATTACH THAT CERTIFICATE TO ANY RETURN THE TAXPAYER IS REQUIRED TO
FILE AND SHALL OTHERWISE APPLY THE CREDIT CARRYOVER, AS EVIDENCED BY THE
CERTIFICATE, ACCORDING TO THE PROVISIONS OF PARAGRAPH TWO OF  SUBSECTION
(A)  OF  THIS  SECTION AND ANY RULES OR REGULATIONS THE COMMISSIONER MAY
ADOPT TO CARRY OUT THE PROVISIONS OF THIS SECTION.
  (2) A NEW OR EXPANDING EMERGING TECHNOLOGY  OR  BIOTECHNOLOGY  COMPANY
THAT  HAS  SURRENDERED  AN  UNUSED  RESEARCH  AND DEVELOPMENT TAX CREDIT
CARRYOVER SHALL NOT BE ALLOWED A RESEARCH  AND  DEVELOPMENT  TAX  CREDIT
CARRYOVER  BASED UPON THE RIGHT TO SUCH A CREDIT CARRYOVER, AS EVIDENCED
BY THE NONCORPORATION BUSINESS TAX BENEFIT CERTIFICATE, AND SHALL ATTACH
A COPY OF THE CERTIFICATE TO ANY RETURN  THE  TAXPAYER  IS  REQUIRED  TO
FILE.
  (D)  FOR  THE PURPOSES OF THIS SECTION, THE FOLLOWING TERMS SHALL HAVE
THE FOLLOWING MEANINGS:
  (1) "ADVANCED COMPUTING" MEANS A  TECHNOLOGY  USED  IN  DESIGNING  AND
DEVELOPING  COMPUTING  HARDWARE  AND  SOFTWARE, INCLUDING INNOVATIONS IN
DESIGNING THE FULL SPECTRUM OF HARDWARE FROM  HAND-HELD  CALCULATORS  TO
SUPER COMPUTERS, AND PERIPHERAL EQUIPMENT.
  (2)  "ADVANCED  MATERIALS"  MEANS MATERIALS WITH ENGINEERED PROPERTIES
CREATED THROUGH THE DEVELOPMENT OF SPECIALIZED PROCESSING AND  SYNTHESIS
TECHNOLOGY,  INCLUDING  CERAMICS,  HIGH  VALUE-ADDED  METALS, ELECTRONIC
MATERIALS, COMPOSITES, POLYMERS, AND BIOMATERIALS.
  (3) "BIOTECHNOLOGY" MEANS THE CONTINUALLY EXPANDING BODY OF  FUNDAMEN-
TAL  KNOWLEDGE  ABOUT  THE FUNCTION OF BIOLOGICAL SYSTEMS FROM THE MACRO
LEVEL TO THE MOLECULAR AND SUBATOMIC LEVELS, AS WELL AS NOVEL  PRODUCTS,
SERVICES,  TECHNOLOGIES,  AND  SUB-TECHNOLOGIES DEVELOPED AS A RESULT OF
INSIGHTS GAINED FROM RESEARCH ADVANCES WHICH ADD TO THAT BODY OF  FUNDA-
MENTAL KNOWLEDGE.

S. 1472--A                          7

  (4) "CONTROL", WITH RESPECT TO A CORPORATION, MEANS OWNERSHIP, DIRECT-
LY  OR  INDIRECTLY,  OF  STOCK  POSSESSING EIGHTY PERCENT OR MORE OF THE
TOTAL COMBINED VOTING POWER OF ALL CLASSES OF THE STOCK  OF  THE  CORPO-
RATION  ENTITLED  TO VOTE; AND "CONTROL", WITH RESPECT TO A TRUST, MEANS
OWNERSHIP,  DIRECTLY  OR  INDIRECTLY,  OF  EIGHTY PERCENT OR MORE OF THE
BENEFICIAL INTEREST IN THE PRINCIPAL OR INCOME OF THE TRUST. THE  OWNER-
SHIP  OF  STOCK  IN A CORPORATION, OF A CAPITAL OR PROFITS INTEREST IN A
PARTNERSHIP OR ASSOCIATION, OR OF A BENEFICIAL INTEREST IN A TRUST SHALL
BE DETERMINED IN ACCORDANCE WITH THE RULES FOR CONSTRUCTIVE OWNERSHIP OF
STOCK PROVIDED IN SUBSECTION (C) OF SECTION 267 OF THE FEDERAL  INTERNAL
REVENUE  CODE  OF  1986,  26  U.S.C.  S 267, OTHER THAN PARAGRAPH (3) OF
SUBSECTION (C) OF SUCH SECTION.
  (5) "CONTROLLED GROUP"  MEANS  ONE  OR  MORE  CHAINS  OF  CORPORATIONS
CONNECTED  THROUGH  STOCK  OWNERSHIP WITH A COMMON PARENT CORPORATION IF
STOCK IS POSSESSING AT LEAST EIGHTY PERCENT OF THE VOTING POWER  OF  ALL
CLASSES  OF STOCK OF EACH OF THE CORPORATIONS IS OWNED DIRECTLY OR INDI-
RECTLY BY ONE OR MORE OF THE CORPORATIONS AND  THE  COMMON  PARENT  OWNS
DIRECTLY STOCK POSSESSING AT LEAST EIGHTY PERCENT OF THE VOTING POWER OF
ALL CLASSES OF STOCK OF AT LEAST ONE OF THE OTHER CORPORATIONS.
  (6) "ELECTRONIC DEVICE TECHNOLOGY" MEANS A TECHNOLOGY INVOLVING MICRO-
ELECTRONICS,  SEMICONDUCTORS, ELECTRONIC EQUIPMENT, AND INSTRUMENTATION,
RADIO FREQUENCY, MICROWAVE, AND MILLIMETER ELECTRONICS, AND OPTICAL  AND
OPTIC-ELECTRICAL DEVICES, OR DATA AND DIGITAL COMMUNICATIONS AND IMAGING
DEVICES.
  (7)  "ENVIRONMENTAL  TECHNOLOGY"  MEANS  ASSESSMENT  AND PREVENTION OF
THREATS OR DAMAGE TO HUMAN  HEALTH  OR  THE  ENVIRONMENT,  ENVIRONMENTAL
CLEANUP, OR THE DEVELOPMENT OF ALTERNATIVE ENERGY SOURCES.
  (8)  "MEDICAL  DEVICE  TECHNOLOGY"  MEANS  A  TECHNOLOGY INVOLVING ANY
MEDICAL EQUIPMENT OR PRODUCT (OTHER THAN A PHARMACEUTICAL PRODUCT)  THAT
HAS  THERAPEUTIC  VALUE,  DIAGNOSTIC VALUE, OR BOTH, AND IS REGULATED BY
THE FEDERAL FOOD AND DRUG ADMINISTRATION.
  (9) "PARTNERSHIP" MEANS A SYNDICATE, GROUP,  POOL,  JOINT  VENTURE  OR
OTHER UNINCORPORATED ORGANIZATION THROUGH OR BY MEANS OF WHICH ANY BUSI-
NESS,  FINANCIAL OPERATION, OR VENTURE IS CARRIED ON, AND WHICH IS NOT A
TRUST OR ESTATE, A CORPORATION, OR A SOLE PROPRIETORSHIP.
  (10) "PILOT SCALE MANUFACTURING" MEANS DESIGN, CONSTRUCTION, AND TEST-
ING OF PREPRODUCTION PROTOTYPES AND MODELS IN  THE  FIELDS  OF  ADVANCED
COMPUTING, ADVANCED MATERIALS, BIOTECHNOLOGY, ELECTRONIC DEVICE TECHNOL-
OGY, ENVIRONMENTAL TECHNOLOGY, AND MEDICAL DEVICE TECHNOLOGY, OTHER THAN
FOR  COMMERCIAL  SALE, EXCLUDING SALES OF PROTOTYPES OR SALES FOR MARKET
TESTING, IF TOTAL  GROSS  RECEIPTS  FROM  SUCH  SALES  OF  THE  PRODUCT,
SERVICE, OR PROCESS DO NOT EXCEED ONE MILLION DOLLARS.
  (11)  "QUALIFIED  INVESTMENT"  MEANS  THE NON-REFUNDABLE INVESTMENT AT
RISK IN A SMALL NEW YORK-BASED HIGH TECHNOLOGY BUSINESS  BY  A  TAXPAYER
THAT IS NOT A RELATED PERSON OF THE SMALL NEW YORK BASED HIGH-TECHNOLOGY
BUSINESS,  THE  TRANSFER OF WHICH IS IN CONNECTION WITH A TRANSACTION IN
EXCHANGE FOR STOCK, INTEREST IN PARTNERSHIPS OR JOINT VENTURES, LICENSES
(EXCLUSIVE  OR  NON-EXCLUSIVE),  RIGHTS  TO  USE  TECHNOLOGY,  MARKETING
RIGHTS, WARRANTS, OPTIONS, OR RIGHTS TO ACQUIRE ANY OF THE ITEMS SIMILAR
TO  THOSE  INCLUDED  IN  THIS  PARAGRAPH,  INCLUDING  BUT NOT LIMITED TO
OPTIONS OR RIGHTS TO ACQUIRE ANY OF THE ITEMS  INCLUDED  IN  THIS  PARA-
GRAPH.
  (12)  "QUALIFIED RESEARCH EXPENSES" MEANS QUALIFIED RESEARCH EXPENSES,
AS DEFINED IN SECTION 41 OF THE FEDERAL INTERNAL REVENUE CODE  OF  1986,
26  U.S.C.  S 41, AS IN EFFECT ON JUNE THIRTIETH, NINETEEN HUNDRED NINE-

S. 1472--A                          8

TY-TWO, IN THE FIELDS OF  ENVIRONMENTAL  TECHNOLOGY  OR  MEDICAL  DEVICE
TECHNOLOGY.
  (13) "RELATED PERSON" MEANS:
  (A) A CORPORATION, PARTNERSHIP, ASSOCIATION, OR TRUST BY THE TAXPAYER;
  (B)  AN  INDIVIDUAL,  CORPORATION,  PARTNERSHIP, ASSOCIATION, OR TRUST
THAT IS IN THE CONTROL OF THE TAXPAYER;
  (C) A CORPORATION, PARTNERSHIP, ASSOCIATION, OR TRUST CONTROLLED BY AN
INDIVIDUAL, CORPORATION, PARTNERSHIP, ASSOCIATION, OR TRUST THAT  IS  IN
THE CONTROL OF THE TAXPAYER; OR
  (D) A MEMBER OF THE SAME CONTROLLED GROUP AS THE TAXPAYER.
  (14)  "SMALL  NEW  YORK BASED HIGH-TECHNOLOGY BUSINESS" MEANS A CORPO-
RATION DOING BUSINESS EMPLOYING OR OWNING CAPITAL OR PROPERTY, OR  MAIN-
TAINING  AN  OFFICE,  IN THIS STATE THAT HAS QUALIFIED RESEARCH EXPENSES
PAID OR INCURRED FOR RESEARCH CONDUCTED IN THIS STATE OR CONDUCTS  PILOT
SCALE  MANUFACTURING IN THIS STATE, AND HAS FEWER THAN TWO HUNDRED TWEN-
TY-FIVE EMPLOYEES, OF  WHOM  SEVENTY-FIVE  PERCENT  ARE  NEW  YORK-BASED
EMPLOYEES FILLING A POSITION OR JOB IN THIS STATE.
  (15)  "TAX  YEAR"  MEANS  THE  FISCAL OR CALENDAR ACCOUNTING YEAR OF A
TAXPAYER.
  S 4. This act shall take effect immediately and shall apply to taxable
years which commence on or after January 1, 2015.