senate Bill S6359D

Signed By Governor
2013-2014 Legislative Session

Enacts into law major components of legislation necessary to implement the state fiscal plan for the 2014-2015 fiscal year

download bill text pdf

Archive: Last Bill Status - Signed by Governor


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed by Governor

do you support this bill?

Actions

view actions (19)
Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Mar 31, 2014 signed chap.59
delivered to governor
returned to senate
passed assembly
ordered to third reading rules cal.34
substituted for a8559d
referred to ways and means
delivered to assembly
passed senate
ordered to third reading cal.376
Mar 28, 2014 print number 6359d
amend (t) and recommit to finance
Mar 14, 2014 print number 6359c
amend and recommit to finance
Feb 21, 2014 print number 6359b
amend and recommit to finance
Feb 12, 2014 print number 6359a
amend (t) and recommit to finance
Jan 21, 2014 referred to finance

Votes

view votes

Bill Amendments

Original
A
B
C
D (Active)
Original
A
B
C
D (Active)

S6359 - Bill Details

See Assembly Version of this Bill:
A8559D
Law Section:
Budget Bills
Laws Affected:
Amd Various Laws, generally

S6359 - Bill Texts

view summary

Enacts into law major components of legislation necessary to implement the state fiscal plan for the 2014-2015 state fiscal year; relates to the reformation of the taxation on business corporations; allows direct payment of STAR savings; extends fees for the establishment of oil and gas unit of production value; modifies signature requirements on e-filed returns; extends the non-custodial parent earned income tax credit for two years; closes the resident trust loophole; repeals the additional minimum personal income tax; establishes an enhanced real property tax circuit breaker; modifies delivery of the family tax relief credit; extends the empire state commercial production tax credit; authorizes additional credits for the low income housing credit; establishes a twenty percent real property tax credit for manufacturers and eliminates the net income tax on upstate manufacturers; repeals the franchise tax on agriculture cooperatives; provides a refundable credit for telecommunications excise taxes on START-UP NY; enhances the youth works tax credit; extends the alternative fuels tax exemption; simplifies the distribution of motor vehicle fee receipts; relates to comprehensive estate tax reform; extends Monticello raceway video lottery terminal rates for one year; extends certain tax rates and certain simulcasting provisions; extends VLG vendors capital awards program; aligns mobility and personal income tax filings for the self-employed; relates to commercial gaming; provides a two-year property tax freeze through a refundable personal income tax credit; extends certain New York city tax exemptions; relates to a musical theatrical production credit; increases the sales tax exemption threshold amount for vending machines; increases film production credit benefits for films produced in certain counties; relates to the length of service awards; creates a third region for the prepayment of motor fuel taxes; establishes the workers with disabilities tax credit program; provides tax incentives to employers for employing individuals with developmental disabilities; allows a STAR lookback period for widows and widowers; relates to health insurance for jockeys.

view sponsor memo
BILL NUMBER:S6359

TITLE OF BILL: An act to amend the tax law, the general municipal
law, the urban development corporation act, the business corporation
law, the general associations law, and the administrative code of the
city of New York, in relation to reforming taxation of business
corporations; and to repeal various provisions of the tax law relating
thereto (Part A); to amend the real property tax law, in relation to
the STAR registration program (Part B); to amend chapter 540 of the
laws of 1992, amending the real property tax law relating to oil and
gas charges, in relation to the effective date of such chapter (Part
C); to amend the racing, pari-mutuel wagering and breeding law, in
relation to increasing racing regulatory fees (Part D); to amend the
tax law, in relation to modifying the signature requirement on e-filed
returns prepared by tax professionals (Part E); to amend the real
property tax law, in relation to cost of living adjustments for
Enhanced STAR (Part F); to amend part I of chapter 58 of the laws of
2006, relating to providing an enhanced earned income tax credit, in
relation to the effectiveness thereof (Part G); to amend the general
obligations law and the tax law, in relation to authorizing electronic
tax clearances for professional and business licenses (Part H); to
amend the tax law and the administrative code of the city of New York,
in relation to taxing residents who are grantors of exempt resident
trusts that qualify as non-grantor incomplete gift trusts on the
income from such trusts and taxing residents who are beneficiaries of
all other exempt resident trusts or nonresident trusts on the
distributions of accumulated income that they receive from such trusts
(Part I); to amend the tax law and the administrative code of the city
of New York, in relation to eliminating the personal income tax add-on
minimum tax; and to repeal certain provisions of such laws relating
thereto (Part J); to amend the tax law, in relation to adding an
enhanced real property tax circuit breaker; and to repeal paragraph 14
of subsection (e) of section 606 of the tax law, relating to certain
reports (Part K); to amend the tax law, in relation to providing a
credit for renters against the personal income tax (Part L); to amend
the tax law, in relation to the prepayment element of the family tax
relief credit (Part M); to amend the tax law, in relation to
eliminating the personal income tax filing requirement for residents
having no liability because income does not exceed the New York
standard deduction if they do not file a federal income tax return
(Part N); to amend the tax law, in relation to extending the empire
state commercial production tax credit (Part O); to amend the public
housing law, in relation to extending the credit against income tax
for persons or entities investing in low-income housing (Part P); to
amend the environmental conservation law, the tax law and the general
municipal law, in relation to eligibility for participation in the
brownfield cleanup program, and assignment of the brownfield
redevelopment tax credits; to amend part H of chapter 1 of the laws of
2003, amending the tax law relating to brownfield redevelopment tax
credits, remediated brownfield credit for real property taxes for
qualified sites and environmental remediation insurance credits, in
relation to tax credits for certain sites; to amend the environmental
conservation law, in relation to hazardous waste generator fees and
taxes; to amend the environmental conservation law, the public
authorities law and the state finance law, in relation to the
environmental restoration program; and to repeal certain provisions of
the environmental conservation law and the tax law relating thereto


(Part Q); to amend the tax law, in relation to reforming the
investment tax credit, reducing the tax rate for upstate manufacturers
and providing a tax credit for real property taxes to New York
manufacturers; to amend the economic development law, in relation to
the excelsior investment tax credit; and to repeal certain provisions
of the tax law relating to the financial services investment tax
credit (Part R); to amend the economic development law, the tax law,
the transportation law, the administrative code of the city of New
York and the New York state urban development corporation act, in
relation to repealing the franchise tax on farmers', fruit growers',
and other like agricultural corporations organized and operated on a
co-operative basis; and to repeal section 185 of the tax law relating
to franchise tax on farmers', fruit growers', and other like
agricultural corporations organized and operated on a co-operative
basis; to repeal sections 187-j, 187-k, 187-l, 187-m, 187-q, 187-r and
187-s of the tax law relating to certain tax credits; to repeal
paragraph 1 of subdivision (h) of section 15, paragraph 1 of
subdivision (g) of section 31, and certain other provisions of the tax
law, in relation to making conforming changes (Part S); to amend the
tax law, in relation to providing a credit for excise tax on
telecommunication services for businesses located in tax-free NY areas
(Part T); to amend the tax law, in relation to reducing the number of
hours of part-time work needed by employees for employer qualification
for the New York youth works tax credit; and to amend the labor law,
in relation to the New York youth works tax credit (Part U); to amend
chapter 109 of the laws of 2006 amending the tax law and other laws
relating to providing exemptions, reimbursements and credits from
various taxes for certain alternative fuels, in relation to extending
the alternative fuels tax exemptions for two years (Part V); to amend
chapter 63 of the laws of 2000, amending the tax law and other laws
relating to modifying the distribution of funds from the motor vehicle
fuel excise tax and the vehicle and traffic law, in relation to
simplifying the methodology for distribution of motor vehicle receipts
(Part W); to amend the tax law, in relation to the estate tax; to
repeal section 2 of chapter 1013 of the laws of 1962, amending the tax
law relating to imposing a tax on the transfer of estates of decedents
dying on or after April first, nineteen hundred sixty-three, relating
to an appendix of applicable internal revenue code provisions, and to
repeal article 26-B of the tax law, relating to the generation
skipping transfer tax (Part X); to amend the tax law and chapter 912
of the laws of 1920 relating to the regulation of boxing, sparring and
wrestling matches, in relation to making technical corrections
thereto; to repeal article 19 of the tax law relating to boxing and
wrestling exhibitions tax; and to repeal section 1820 of the tax law
relating to establishing misdemeanors for certain violations of
article 19 of such law (Part Y); to amend the tax law, in relation to
vendor fees paid to vendor tracks (Part Z); to amend the racing,
pari-mutuel wagering and breeding law, in relation to licenses for
simulcast facilities, sums relating to track simulcast, simulcast of
out-of-state thoroughbred races, simulcasting of races run by
out-of-state harness tracks and distributions of wagers; to amend
chapter 281 of the laws of 1994 amending the racing, pari-mutuel
wagering and breeding law and other laws relating to simulcasting and
chapter 346 of the laws of 1990 amending the racing, pari-mutuel
wagering and breeding law and other laws relating to simulcasting and
the imposition of certain taxes, in relation to extending certain
provisions thereof; and to amend the racing, pari-mutuel wagering and


breeding law, in relation to extending certain provisions thereof
(Part AA); to amend the tax law, in relation to capital awards to
vendor tracks (Part BB); to amend the tax law, the banking law, the
public authorities law, and the administrative code of the city of New
York, in relation to the stock transfer tax, and to repeal certain
provisions of the tax law, the state finance law and the
administrative code of the city of New York relating thereto (Part
CC); to amend the tax law, in relation to conforming the due dates for
the metropolitan commuter transportation mobility tax for taxpayers
with income from self-employment with the due dates for the personal
income tax (Part DD); to amend the state finance law, the upstate New
York gaming economic development act of 2013 and the tax law, in
relation to moneys appropriated or transferred from the commercial
gaming revenue fund (Part EE); and to amend the tax law, the education
law, the general municipal law, and the real property tax law, in
relation to a real property tax freeze (Part FF)

PURPOSE:

This bill contains provisions needed to implement the Revenue portion
of the 2014-15 Executive Budget.

This memorandum describes Parts A through FF of the 2014-15 Article
VII Revenue bill which are described wholly within the parts listed
below.

Part A - Corporate tax reform

Purpose:

This bill would establish a single modern system of taxation for
general business corporations and banking corporations by repealing
the separate provisions of the Tax Law for banking corporations (Tax
Law Article 32) and amending the business corporation tax under
Article 9-A to accommodate changes in the financial services industry
and make other modernization changes.

Statement in Support, Summary of Provisions, Existing Law, and Prior
Legislative History:

The State's current corporate franchise tax structure, which dates
back to the 1940's, is outdated, unduly complex and vulnerable to
aggressive tax avoidance techniques. It violates basic tax policy
principles by taxing similarly-situated taxpayers differently, and in
some instances it creates disincentives to increasing a corporation's
activities in New York. One significant example of the shortcoming of
the current tax structure is that it has not been revised to account
for dramatic changes in the financial services sector. New York
continues to tax banks and other financial corporations under
different articles of the Tax Law. Thus, a bank and a non-bank
financial institution would be taxed differently, even though they are
conducting the same activities. Further, many large financial services
firms provide bank and non-bank financial services within the same
company. This can result in confusion and complexity due to different
rules of taxation under Article 9-A and Article 32. Approximately 25
percent of the combined Article 9-A and Article 32 revenue is
collected on audit.


New York's current sourcing rules fail to acknowledge the shift to a
service-based economy. Companies that generate significant receipts
from services can incur greater tax liability if they increase their
activity in New York. This reform proposal would source a business's
receipts to the location of its customers. This assigns income to
various states based on where the customers are located and eliminates
factors that would increase tax if a company increased its activity in
New York. This removes a previous disincentive to locating in New
York.

Complexities within the tax system also complicate tax compliance.
This creates disruptions and uncertainty for businesses while
increasing administration costs for New York State and results in
extremely volatile tax collections that are difficult to forecast and
can have dramatic effects on the State's financial plan.

This reform proposal addresses the above issues by modernizing the tax
code to make it more reflective of the current business environment,
and creates clarity and certainty for the most commonly disputed
areas. This certainty, combined with the elimination of impediments to
businesses wishing to expand their New York activity, will make New
York's corporate tax system more competitive with other states.

Highlights of the reforms and structural changes made by the bill
include (1) the repeal of both Article 32 and the organization and
license taxes and maintenance fees in Tax Law sections 180 and 181 and
(2) the replacement of the entire net income base with a similar
business income base subject to a fully effective tax rate of 6.5
percent (effective January 1, 2016) as compared to the existing 7.1
percent rate.

Both the New York State Tax Relief Commission and the New York State
Tax Reform and Fairness Commission highlighted the need for New York
corporate tax reform and specifically identified the different rules
under which banks and other corporations are taxed.

This is a new bill.

Budget Implications:

Enactment of this bill is necessary to implement the 2014-2015
Executive Budget because it would reduce revenues by $205 million in
SFY 2015-16 and $346 million annually thereafter.

Effective Date:

This bill takes effect January 1, 2015 and applies to taxable years
beginning on or after January 1, 2015.

Part B - Allow direct payment of STAR tax savings in certain cases.

Purpose:

This bill would allow the Department of Taxation and Finance to pay
the STAR tax savings directly to eligible property owners who register
for STAR after receiving their 2014-15 school tax bills.


Statement in Support, Summary of Provisions, Existing Law, and Prior
Legislative History:

The STAR Registration Program was enacted as part of the 2013-14 State
Budget to eliminate inappropriate "Basic STAR" exemptions while
enabling qualified owners to receive their rightful tax relief. The
law permits late registrations under certain conditions, so it is
possible that a limited number of property owners may seek to register
after receiving their 2014-15 school tax bills. While there is a
mechanism in current law to restore a STAR exemption after a school
tax bill has been issued, it is a process that forces the property
owner to wait for a refund while local government and school district
personnel process the necessary paperwork. This proposal would allow
the Tax Department to directly reimburse these property owners without
delay, while sparing local officials the need to bear administrative
burdens in support of this State program.

Budget Implications:

Enactment of this bill is necessary to implement the 2014-15 Executive
Budget and to allow late registrants to be reimbursed promptly for the
value of their lost STAR exemptions.

Effective Date:

This bill takes effect immediately.

Part C - Extend fees for the establishment of oil and gas unit of
production values

Purpose:

This bill would extend fees for the establishment of oil and gas unit
of production values by the Department of Taxation and Finance (the
Department).

Statement in Support, Summary of Provisions, Existing Law, and Prior
Legislative History:

The Department establishes "unit of production values" which local
assessors must use when assessing oil and gas wells and related
facilities, pursuant to Article 5, Title 5 of the Real Property Tax
Law. This program, which has been in place since 1981, relieves local
assessors of the burden of attaining the necessary expertise to value
these properties, while assuring producers that their assessments will
be determined on a uniform, rational basis throughout the State.

In recognition of the benefit this program provides for the industry,
producers have been obliged since 1992 to pay fees to the State to
offset the administrative costs involved in developing these values.
The statute imposing those fees - § 593 of Real Property Tax Law - has
always been subject to a sunset clause, and has been repeatedly
renewed since enactment. This bill would extend the program until
2018.

Budget Implications:


Enactment of this bill is necessary to implement the 2014-15 Executive
Budget and allow the Department to offset related costs.

Effective Date:

This bill takes effect immediately.

Part D - Increase racing regulatory fee from 0.5 percent to 0.6
percent

Purpose:

This bill would increase the racing regulatory fee on thoroughbred,
harness, off-track pari-mutuel betting and simulcast racing from 0.5
percent to 0.6 percent.

Statement in Support, Summary of Provisions, Existing Law, and Prior
Legislative History:

Regulation of the horse racing industry is intended to be
self-financing-paid for entirely by the industry. However, the cost of
regulating the industry has consistently exceeded the revenues
collected by the industry. This bill ensures that assessments on the
industry are sufficient to meet the cost of regulation.

Budget Implications:

Enactment of this bill is necessary to implement the 2014-15 Executive
Budget and will generate an additional $1.6 million annually.

Effective Date:

This bill takes effect immediately.

Part E - Modify signature requirements on e-filed returns prepared by
tax professionals

Purpose:

This bill would modify the signature requirements on e-filed returns
prepared by tax professionals.

Statement in Support, Summary of Provisions, Existing Law, and Prior
Legislative History:

This bill reflects the recommendation of the New York State Tax Reform
and Fairness Commission that the signature requirement for e-filed
returns be modified It would allow taxpayers to use electronic
signatures when authorizing their tax preparers to e-file their tax
returns and related documents. This would make the process less
burdensome for tax professionals and serve to further reduce barriers
to electronic filing.

Budget Implications:

Enactment of this bill is necessary to implement the 2014-2015
Executive Budget. It would implement a tax simplification


recommendation of the Tax Reform and Fairness Commission and has no
impact on the State's Financial Plan.

Effective Date:

This bill takes effect immediately.

Part F - Eliminate the Income Threshold Inflation Adjustment For
Enhanced STAR Benefits

Purpose:

This bill eliminates the annual cost of living adjustment for the
income standard applicable to the Enhanced STAR exemption under the
STAR program.

Statement in Support, Summary of Provisions, Existing Law, and Prior
Legislative History:

This bill amends RPTL § 425(4) by eliminating the annual cost of
living adjustment made to the income standard for Enhanced STAR
eligibility beginning with the 2015-16 school year, effectively
freezing the income threshold at $81,900. Existing law requires that
the income threshold applicable for Enhanced STAR eligibility be
adjusted annually to account for a cost-of-living adjustment
percentage.

STAR was enacted in 1997 to offset rising property taxes for
homeowners and to provide additional targeted property tax relief to
senior citizens. Since that time, a number of program enhancements
have been made that contributed to increases in the current and
projected cost of the STAR program. The costs of the STAR program
increased approximately 32% between 2001-02 and 2012-13. The direct
costs of the STAR program, including reimbursements made under RPTL
1306-a and State Finance Law § 54-f, in 2012-13 were over $3.3
billion. Capping the growth of the direct costs to the State of the
program at current levels will limit spending at the State level and
is critical for a balanced State budget.

Budget Implications:

Eliminating the annual cost of living adjustment will reduce General
Fund spending by $3.1 million in SFY 2015-16.

Effective Date:

This bill takes effect immediately and applies to assessment rolls
completed in 2015 and thereafter.

Part G - Extend the Noncustodial Parent Earned Income Tax Credit for
Two Years

Purpose:

This bill would extend the noncustodial parent earned income tax
credit for two years, through tax year 2016.


Statement in Support, Summary of Provisions, Existing Law, and Prior
Legislative History:

The credit is available to noncustodial parents who pay child support
for a qualifying child with whom they do not reside. This credit
rewards noncustodial parents who are working, and it provides a
substantial work incentive for those not working or working
intermittently. The credit is intended to encourage low-income
noncustodial parents to comply with child support orders. It is also
intended to encourage low-income noncustodial parents to become more
involved in the economic and social well-being of their children.

The credit currently applies to taxable years beginning before January
1, 2015. This bill would extend the credit for two years through tax
year 2016.

Budget Implications:

Enactment of this bill is necessary to implement the 2014-2015
Executive Budget because it would decrease All Funds tax receipts by
$4 million in each of SFYs 2016-17 and 2017-18.

Effective Date:

This bill takes effect immediately.

Part H - Mandate for professional and business licenses electronic tax
clearance upon application or renewal

Purpose:

This bill would create a new program to aid in enforcing and
collecting past-due tax liabilities by preventing applicants from
receiving or renewing professional or business licenses if they owe
certain past-due tax liabilities.

Statement in Support, Summary of Provisions, Existing Law, and Prior
Legislative History:

Under the Governor's direction, the State has initiated one of the
most comprehensive one-stop electronic licensing initiatives in the
country. This bill would further the Governor's initiative by
requiring an electronic tax clearance when a professional or business
license is sought or renewed. In return for the privilege of receiving
such license, an applicant with fixed and final tax liabilities would
be required either to pay the past-due tax liabilities or to enter
into a payment agreement with the Department of Taxation and Finance.
The bill would also permit electronic sales tax registration
clearances for licenses related to business activities that require
such registrations.

The bill would build on the successful driver's license tax clearance
program enacted as part of the 2013-14 Budget and on the General
Obligations Law § 3-503 license clearance requirements related to
delinquent child support obligations. By using modern electronic
processing systems, there would be no inconvenience to applicants
without tax liabilities, because these liability checks would run


seamlessly in the background as the license application is processed.
If the applicant's tax clearance is refused, the government agency
processing the application would provide notice to the applicant to
contact the Tax Department.

Budget Implications:

Enactment of this bill is necessary to implement the 2014-2015
Executive Budget, because it would increase All Funds receipts by $3
million in SFY 2015-16 and annually thereafter.

Effective Date:

The bill would take effect on June 1, 2014, provided, however, that
the Department of Taxation and Finance and any government entity
electing to receive an electronic tax clearance from the Department of
Taxation and Finance may work to execute the necessary procedures and
technical changes to support the electronic tax clearance process as
described in sections one and two of this act before that date;
provided, further, that this effective date would not impact the
administration of any electronic tax clearance program authorized by
any other provision of law.

Part I - Close the resident trust loophole

Purpose:

This bill would amend the Tax Law to ensure that certain income earned
by trusts is properly subject to New York income tax.

Statement in Support, Summary of Provisions, Existing Law, and Prior
Legislative History:

This bill would amend the Tax Law to make two improvements to the
taxation of trusts. First, the bill would tax distributions of
accumulated trust income to New York beneficiaries of non-resident
trusts and exempt resident trusts. Second, the bill would eliminate a
loophole that allows incomplete gift, non-grantor trusts set up by New
York residents to completely avoid New York income tax. These two
amendments reflect the proposals included in the November 18, 2013
report made by the Trusts and Estates section of the New York State
Bar Association to the Tax Reform and Fairness Commission.

In general, from an income tax perspective, income that is earned by a
trust may be included in the income of the grantor, the trust, or the
beneficiaries of the trust. Under the Tax Law, however, the
accumulated income (i.e the income of a trust that is not distributed
to a beneficiary) of several types of trusts is not subject to any New
York tax at the grantor level, the trust level, or the beneficiary
level. The categories of trusts for which all or a portion of their
accumulated income is not currently subject to New York income tax
include:

(1) non-resident trusts (i .e. a trust whose grantor is not domiciled
in New York at the time the trust became irrevocable);


(2) exempt resident trusts (i.e. trusts that are exempt from New York
income taxation because three conditions in Tax Law § 605(b)(3) are
satisfied); and

(3) incomplete gift, non-grantor or "ING" trusts (i.e certain trusts
that are specifically structured (i) so that the settlor's transfer of
property to the trust is an incomplete gift and (ii) to avoid grantor
trust status under Sections 671 through 678 of the Internal Revenue
Code, Title 26, United States Code.

This bill would remedy this problem by (1) taxing New York
beneficiaries of non-resident trusts and exempt resident trusts on the
accumulated income of the trusts when the income is distributed to the
beneficiary and (2) including the income of an ING trust established
by a New York resident in the current income of its grantor. The bill
would also provide a credit for non-resident trust and exempt resident
trust beneficiaries for taxes paid to other jurisdictions, require
non-resident trusts and exempt resident trusts to file information
returns, and make conforming changes to the New York City
Administrative Code.

This bill would be effective immediately and be applicable to tax
years beginning on or after January 1, 2014 To mitigate transition
issues, however, the section excludes from tax. (1) distributions of
accumulated income by exempt resident trusts (except ING trusts) made
before June 1, 2014, and (2) income earned by ING trusts that are
liquidated on or before June 1, 2014.

Budget Implications:

Enactment of this bill is necessary to implement the 2014-15 Executive
Budget because it would increase tax revenues by $75 million in SFY
2014-15, $225 million in SFY 2015-16, and $150 million annually
thereafter.

Effective Date:

This bill takes effect immediately and applies to taxable years
beginning on or after January 1, 2014, provided that sections 1 and 6
do not apply to distributions occurring before June 1, 2014, while
sections 2 and 7 do not apply to income earned by trusts covered by
those section that are liquidated prior to June 1, 2014.

Part J - Repeal the additional minimum personal income tax Purpose
This bill would repeal the personal income tax "add-on" minimum tax.

Statement in Support, Summary of Provisions, Existing Law, and Prior
Legislative History:

This bill would implement the recommendation of the New York State Tax
Reform and Fairness Commission that the additional minimum personal
income tax be repealed. The Commission found that this tax pre-dates
the 1986 tax reforms and pertains to only 200 taxpayers with minimal
revenue generated.

New York has been penalized in tax rankings because, among other
things, provisions like the add-on minimum tax make the State's tax


code unnecessarily complex and burdensome This bill would repeal the
additional tax, thereby helping to streamline the tax code to further
the Commission's goal of making it less complex and burdensome.

This bill would also make conforming changes to New York City's add-on
minimum tax.

Budget Implications:

Enactment of this bill is necessary to implement the 2014-2015
Executive Budget. It would implement a tax simplification
recommendation of the Tax Reform and Fairness Commission and has
minimal impact on the State's Financial Plan.

Effective Date:

This bill takes effect immediately and applies to taxable years
beginning on or after January 1, 2014.

Part K - Establish the Residential Real Property Personal Income Tax
Credit

Purpose:

This bill would create a new enhanced property tax circuit break
credit for low- and middle-income homeowners.

Statement in Support, Summary of Provisions, Existing Law, and Prior
Legislative History:

New York homeowners pay some of the highest property tax bills in the
nation, whether measured in absolute terms or as a percentage of
income or home value. Property taxes have seriously burdened New
York's working families and senior citizens. While progress has been
made and should continue under the existing property tax cap, there is
also a need to help New York's overburdened homeowners based on
ability to pay.

This bill, a recommendation of the Tax Reduction Commission, would
create a new real property tax circuit breaker that offers larger
credit amounts for all taxing jurisdictions that stay within the
property tax cap. The credit is targeted to help low-income and middle
class New York homeowners with qualifying incomes up to $200,000. The
credit value rises with the size of the homeowner's property tax
burden. The bill would also keep the existing circuit breaker in place
so that New York homeowners currently benefiting from the circuit
breaker are not denied a benefit if their taxing jurisdictions do not
comply with the property tax cap.

Budget Implications:

Enactment of this bill is necessary to implement the 2014-2015
Executive Budget. It would implement a reform recommendation of the
Tax Reduction Commission and reduce All Funds receipts by a total of
$200 million in SFY 2015-16, by $525 million in SFY 2016-17, and by $1
billion annually thereafter.


Effective Date:

This bill takes effect immediately and applies to taxable years
beginning on or after January 1, 2014.

Part L - Establish a renter's personal income tax credit Purpose:
This bill would provide a credit against the personal income tax for
eligible renters.

Statement in Support, Summary of Provisions, Existing Law, and Prior
Legislative History:

This bill would provide a personal income tax credit for eligible low
and middle income taxpayers who rent their primary residences. This
credit may be taken in lieu of the current real property tax circuit
breaker credit for renters if the amount of this credit is higher and
the taxpayer qualifies for both credits.

The amount of credit would be based on the taxpayer's income level and
filing status A qualified taxpayer who is 65 years or older and has a
"single" filing status would be eligible for a base credit, and a
qualified taxpayer who files a joint return with a spouse who is
sixty-five years of age or older, or files as a head of household,
married individual filing a separate return or surviving spouse and
has at least one dependent, would be eligible for a base credit and an
additional amount based on the number of federal exemptions claimed by
such taxpayer The credit will be phased in for taxable years beginning
in 2014, with the initial credit set at one-half of the credit that
would be applicable for taxable years beginning in or after 2015.

Budget Implications:

Enactment of this bill is necessary to implement the 2014-2015
Executive Budget and financial plan. It would reduce All Funds
receipts by a total of $200 million in State Fiscal Year 2015-16 and
$400 million annually thereafter.

Effective Date:

This bill takes effect immediately.

Part M - Modify delivery of the family tax relief credit after Tax
Year 2014

Purpose:

This bill would eliminate the prepayment element of the family tax
relief credit in section 606 (vv) of the tax law for taxable years
beginning on or after January 1, 2015.

Summary of Provisions, Existing Law, Prior Legislative History, and
Statement in Support:

This bill would amend § 606(vv) of the Tax Law to eliminate the
prepayment of the family tax relief credit in taxable years beginning
on or after January 1, 2015 and provide that eligibility for the
credit will be based on the taxpayer's tax return for the current year


Existing law provides that the prepayment would be available in each
year that the credit is allowed (i.e., tax years 2014, 2015 and 2016).
Because of the prepayment, it was necessary to determine eligibility
from a taxpayer's return filed two years prior.

Budget Implications:

Enactment of this bill is necessary to implement the 2014-2015
Executive Budget because it would increase All Funds tax receipts by
$410 million in SFY 2015-16 and reduce All Funds tax receipts by $410
million in SFY 2017-18.

Effective Date:

This bill would take effect immediately and apply to taxable years
beginning on or after January 1, 2015.

Part N - Increase the personal income tax filing threshold to reduce
the number of taxpayers who need to file personal income tax returns

Purpose:

This bill would raise the threshold for filers by eliminating the
personal income tax filing requirement for residents having no tax
liability because the resident's income does not exceed the New York
standard deduction.

Statement in Support, Summary of Provisions, Existing Law, and Prior
Legislative History:

This bill would eliminate the requirement that a resident who has a
modified federal adjusted gross income in excess of $4,000 but less
than the New York standard deduction ($15,650 for married couples)
file a personal income tax return if he or she does not file a federal
personal income tax return. This bill would require only residents who
have modified federal adjusted gross income in excess of the New York
standard deduction to file a personal income tax return.

Raising the filing threshold to the current standard deduction levels
would eliminate filing for approximately 270,000 taxpayers who owe no
New York personal income tax and are not eligible for any refunds
(one-half of whom are senior citizens). The Internal Revenue Service
uses a similar standard.

Budget Implications:

Enactment of this bill would implement a tax simplification
recommendation of the Tax Reform and Fairness Commission and have no
impact on the State's Financial Plan.

Effective Date:

This bill takes effect immediately.

Part O - Extend the Empire State Commercial Production Tax Credit for
Two Years


Purpose:

This bill would extend the Empire State Commercial Production Tax
Credit for two years, until December 31, 2016.

Statement in Support, Summary of Provisions, Existing Law, and Prior
Legislative History:

The Empire State Commercial Production tax credit is available for
taxable years beginning on or after January 1, 2007 and expires on
December 31, 2014. In general, the credit is available to qualifying
taxpayers under Articles 9-A and 22 in an amount equal to 20 percent
of the qualifying production costs incurred in the actual filming or
recording of a qualified commercial in New York that exceed the
average of the previous years' costs for which the credit was applied,
plus 5 percent of costs if costs exceed $500,000 in the calendar year
in the Metropolitan Commuter Transportation District (MCTD) and above
$200,000 in the calendar year outside the MCTD. This bill would
extend the expiration of the tax credit by two years, until December
31, 2016.

Budget Implications:

Enactment of this bill is necessary to implement the 2014-2015
Executive Budget. It would decrease All Funds tax receipts by $7
million in each of SFYs 2016-17 and 2017-18.

Effective Date: This bill takes effect immediately.

Part P - Authorize additional credits of $8 million for the low-income
housing credit for each of the next two fiscal years

Purpose:

This bill would increase the aggregate amount of low income housing
tax credit the Commissioner of Housing and Community Renewal may
allocate from $48 million to $56 million for state fiscal year (SFY)
2014-15 and from $56 million to $64 million for SFY 2015-16.

Summary of Provisions, Existing Law, Prior Legislative History, and
Statement in Support:

Section one of the bill would amend § 22 of the Public Housing Law to
increase the aggregate amount of low income housing tax credit the
Commissioner may allocate from $48 million to $56 million in SFY
2014-15.

Section two of the bill would amend § 22 of the Public Housing Law to
increase the aggregate amount of low income housing tax credit the
Commissioner may allocate from $56 million to $64 million in SFY
2015-16.

Budget Implications:

Enactment of this bill is necessary to implement the 2014-2015
Executive Budget because it would decrease All Funds tax receipts by


$8 million in SFY 2015-16, $16 million annually through SFY 2024-25
and $8 million in SFY 2025-26.

Effective Date: This bill takes effect immediately, however, section
two would take effect on April 1, 2015

Part Q - Extend and Reform the Brownfield Cleanup Program

Purpose:

This bill would extend the brownfield cleanup program and tax credits
for 10 years and further reform the program.

Statement in Support, Summary of Provisions, Existing Law, and Prior
Legislative History:

The bill would:

* Continue the brownfield cleanup program (BCP) and tax credits for 10
years (through December 31, 2025) with needed reforms;

* Separate BCP eligibility from tangible property credit eligibility,
limiting eligibility for tangible property credits to:

a. properties vacant for at least 15 years or vacant and tax
delinquent for 10 years or more;

b. "upside down" properties (where the property value is less than
cleanup costs); and

c. priority economic development projects;

* Provide "bonus" credits for affordable housing, location in an
Environmental Zone, and conforming with a Brownfield Opportunity Area
(BOA) plan;

* Limit eligible site preparation costs to only those needed for
effective cleanup;

* Establish BCP EZ, a fast-track voluntary cleanup option that
provides liability relief without tax credits;

* Terminate sites that have been in the program since before June 2008
that do not complete cleanup by December 31, 2015, and sites in the
program from June 2008 through July 1, 2014 that do not complete
cleanup by December 31, 2017;

* Limit the tangible property tax credit to five consecutive tax years
either after the date of the issuance of the certificate of completion
or the start of the redevelopment of the site; and

* Repeal the insurance remediation tax credit and the real property
tax credit for new sites accepted into the program after July 1, 2014.

The bill would also exempt hazardous waste generated at certain sites
from fees and special assessments, and would authorize DEC to


undertake environmental restoration projects on behalf of a
municipality upon its request.

The BCP tax credits are scheduled to sunset on December 31, 2015. In
the ten years since it was established, the BCP has catalyzed the
cleanup of over 150 contaminated sites statewide, incentivizing
redevelopment. However, it has also resulted in the awarding of over
$800 million in tax credits without regard to the need for financial
assistance Amendments to the BCP program made in 2008 established a
cap on tangible (redevelopment) property tax credits; this bill would
eliminate the tangible tax credits for sites that do not need them to
encourage redevelopment.

The NYS Tax Reform and Fairness Commission recommended that the BCP be
amended to prevent developments that would have gone forward without
tax credits from taking advantage of the program. This bill would
implement the Commission's recommendation. The bill would focus tax
credits on sites and areas of the State, especially upstate, that need
them the most to foster redevelopment. It would also establish a
fast-track option without tax credits that would provide streamlined
state oversight of site cleanup. BCP-EZ, in addition to providing
developers with a fast-track option, would reduce State spending,
while allowing developers to obtain the post-clean-up liability
releases necessary to obtain financing for future site redevelopment.

Budget Implications:

Enactment of this bill is necessary to implement the 2014-2015
Executive Budget because it would maintain program continuity and
provide certainty to program participants Enactment of this bill would
have no impact on tax receipts during the Financial Plan period, but
would provide long term savings.

Effective Date:

This bill takes effect July 1, 2014.

Part R - Establish a 20 percent real property tax credit for
manufacturers; eliminate the net income tax on upstate manufacturers;
reform the investment tax credit; and repeal the financial services
investment tax credit

Purpose: This bill would create a new real property tax credit for
"qualified New York manufacturers", reduce the entire net income tax
rate for qualified upstate New York manufacturers, reform the
investment tax credit (ITC) and repeal the financial services ITC.

Statement in Support, Summary of Provisions, Existing Law, and Prior
Legislative History:

Providing tax relief to manufacturers in this State is necessary to
help existing New York manufacturers survive and attract new
manufacturers to the State. This bill incorporates the recommendations
of the New York State Tax Relief Commission by providing a real
property tax credit to qualified New York manufacturers and reducing
the entire net income tax rate for qualified upstate manufacturers.


The New York State Tax Reform and Fairness Commission recommended ITC
reform in order to more effectively target the State's investment.
The ITC would no longer be available for property used by companies
that do not qualify as manufacturers. In addition, the New York State
Tax Reform and Fairness Commission recommended that the financial
services ITC authorized under Articles 9-A, 22, 32 and 33 of the Tax
Law be eliminated because the credit is complex, frequently subject to
complicated recapture provisions, and provides benefits to an
extremely limited segment of the financial services industry.

Section 1 would add the definition of a "qualified New York
manufacturer" to the Tax Law. It is derived from the definition
currently in place for the reduced Article 9-A tax rates for
manufacturers, which defines a "qualified New York manufacturer" as a
taxpayer that is principally engaged in manufacturing (i.e., more than
50% of its gross receipts derived from the sale of manufactured goods)
and has a minimum amount of property used for manufacturing within the
state or employees engaged in manufacturing within the state.

Section 2 would create a new refundable real property tax credit for
qualified New York manufacturers under Article 9-A (corporate
franchise tax) equal to 20 percent of the real property tax qualified
New York manufacturers paid on property used for manufacturing during
the taxable year.

Sections 3 and 4 would make conforming changes to Article 22 (personal
income tax) for the new refundable real property tax credit for
qualified manufacturers.

Section 5 would reform the ITC under Article 9-A by restricting the
credit to qualified New York manufacturers and qualified New York
agricultural and mining businesses for property used to produce goods
for sale or research and development property. This section also
repeals the financial services ITC.

Section 6 would amend the ITC for taxpayers that lease tangible
personal property to reflect the repeal of the financial services ITC
and the disallowance of the ITC for a qualified film production
facility.

Sections 7 and 8 would exclude air pollution control facilities and
air or water pollution control facilities from receiving the ITC and
would repeal the rehabilitation for historic barns and retail
enterprise credits that are part of the investment tax credit.

Sections 9 through 13 would make conforming changes to Article 22
(personal income tax) for the reform of the ITC and repeal of the
financial services ITC.

Section 14 would repeal the ITC for Article 32 (bank tax) taxpayers.

Section 15 would repeal the ITC for Article 33 (insurance tax)
taxpayers.

Section 16 would reduce the entire net income tax rate from 5.9
percent to zero percent for qualified upstate New York manufacturers
defined as taxpayers that have a zero allocation percentage in the


Metropolitan Commuter Transportation District for purposes of the MTA
business tax surcharge.

Section 17 would amend the capital base definition under Article 9-A
to include the definition of a qualified New York manufacturer as
defined in Section 1 of the bill.

Section 18 would amend the alternative minimum tax definition under
Article 9-A to include the definition of a qualified New York
manufacturer as defined in Section 1 of the bill.

Section 19 would amend the fixed dollar minimum tax definition under
Article 9-A to include the definition of a qualified New York
manufacturer as defined in Section 1 of the bill.

Section 20 states that for the purposes of determining whether a
taxpayer is an eligible qualified New York manufacturer and able to
receive the associated tax benefits available for tax years 2012
through 2014, the taxpayer shall use the guidelines and criteria that
were in effect for December 31, 2013.

Section 21 would remove the Excelsior ITC component for taxpayers who
file under Article 32 or Article 33.

Section 22 contains a severability clause.

Section 23 provides for an effective date of January 1, 2014.

Budget Implications: Enactment of this bill is necessary to implement
the 2014-2015 Executive Budget. In particular:

* The real property tax credit for manufacturers would decrease All
Funds tax receipts by $136 million in each of SFYs 2015-16 through
2018-19.

* The reform of the ITC would increase All Funds tax receipts by $65
million in each of SFYs 2014-15 through 2018-19.

* The repeal of the financial services ITC would increase All Funds
tax receipts by $30 million in each of SFYs 2014-15 through 2018-19

* The reduction of the entire net income rate for qualified upstate
New York manufacturers would decrease All Funds tax receipts by $24
million in SFYs 201415 through 2015-16 and $25 million in SFYs 2016-17
through 2018-19.

Effective Date:

This bill takes effect immediately and would apply to taxable years
beginning on or after January 1, 2014.

Part S - Repeal the franchise tax on agriculture cooperatives

Purpose: This bill would repeal the State's Tax Law § 185 franchise
tax on farmers', fruit growers', and other like agricultural
corporations organized and operated on a co-operative basis.


Statement in Support, Summary of Provisions, Existing Law, and Prior
Legislative History:

The bill would repeal the franchise tax on agriculture cooperatives
and exempt those corporations from tax The bill would also make
conforming changes to the Tax Law and various other laws. Only 45
taxpayers pay this tax, and the median tax is $160 with one-third of
taxpayers only paying $10. Since SFY 2006-07, in only one year (SFY
2011-12) were receipts greater than the amount of refunds paid out.

Budget Implications:

Enactment of this bill is necessary to implement the 2014-2015
Executive Budget, because it would implement a tax simplification
recommendation of the Tax Reform and Fairness Commission and has no
impact on the State's Financial Plan.

Effective Date: The bill would take effect immediately and apply to
taxable years beginning on or after January 1, 2015.

Part T - Provide a refundable credit for the excise tax on
telecommunication services paid by START-UP NY companies.

Purpose:

This bill would provide a refundable credit for the excise tax on
telecommunication services paid by START-UP NY companies.

Statement in Support, Summary of Provisions, Existing Law, and Prior
Legislative History:

Section 186-e of the Tax Law imposes an excise tax on
telecommunication services that is customarily passed through by the
telecommunications provider to its customers. The bill would provide
that START-UP NY companies would be allowed a refundable credit equal
to the section 186-e tax that is passed through to such businesses.

Budget Implications:

Enactment of this bill is necessary to implement the 2014-2015
Executive Budget, because it would eliminate an inconsistency in the
current START-UP NY statute The cost of this bill is included in the
Financial Plan as part of the cost of the START-UP NY program.

Effective Date: This bill takes effect immediately and applies to
taxable years beginning on or after January 1, 2014.

Part U - Enhance the Youth Works Tax Credit

Purpose:

This bill would amend the Tax Law to allow employers to claim the New
York State Youth Works credit for certain employees who work ten hours
per week if the employees are enrolled in high school full time, and
to provide an additional tax credit to employers that employ such
youth for one additional year


Statement in Support, Summary of Provisions, Existing Law, and Prior
Legislative History:

Currently, employers can claim the New York State Youth Works credit
only for employees employed either full time or part-time (who worked
at least twenty hours per week) This bill amends the Tax Law to
conform to amendments to the Labor Law that were added by Chapter 536
of the Laws of 2013 which expanded coverage of the credit to include
employees who work at least ten hours per week while enrolled full
time in high school, for purposes of calculating the credit.

Additionally this bill would provide an additional $1,000 tax credit
for employers that retain youth in full-time status for one additional
year and an additional $500 for employers that retain youth in a
part-time status for one additional year.

Finally, this bill increases the allocation amounts under programs two
through five from $6 million to $10 million.

Budget Implications:

Enactment of this bill is necessary to implement the 2013-14 Executive
Budget because it would decrease All Funds tax receipts by $4 million
in each of SFYs 2015-16 through 2018-19.

Effective Date: This bill takes effect immediately and applies to
taxable years beginning on or after January 1, 2014.

Part V - Extend the alternative fuels tax exemptions for two years

Purpose:

This bill would extend the sunset from September 1, 2014 to September
1, 2016 for the tax exemptions for alternative fuels, including E85,
CNG, hydrogen, and B20.

Statement in Support, Summary of Provisions, Existing Law and Prior
Legislative History:

Extending the exemptions for alternative fuels would continue to
provide an incentive for the use of renewable fuels and is part of a
comprehensive strategy to reduce dependence on foreign oil and to
increase the use of clean energy fuels.

This bill would extend the sunset for the exemptions in the Tax Law
for alternative fuels from September 1, 2014 to September 1, 2016.
Unless this sunset is extended, the Tax Law will no longer allow full
exemptions for E85, CNG, and hydrogen, and partial exemption for B20
from the motor fuel taxes (Article 12-A), the petroleum business taxes
(Article 13-A), fuel use taxes (Article 21-A) and State and local
sales and compensating use taxes (Articles 28 and 29).

Budget Implications:

Enactment of this bill is necessary to implement the 2014-2015
Executive Budget because it would reduce All Funds sales and use,


petroleum business, and motor fuel taxes by a total of $8 million in
SFY 2014-15, $16 million in SFY 2015-16 and $8 million in SFY 2016-17.

Effective Date:

This bill takes effect immediately.

Part W - Simplify the distribution of motor vehicle fee receipts

Purpose: This bill would replace all current Department of Motor
Vehicles General Fund (MVGF) transfers with a simplified structure.

Summary of Provisions, Existing Law, Prior Legislative History, and
Statement in Support:

Section one of the bill would amend § 15 of Part V of chapter 61 of
the laws of 2005 by ending the current MVGF structure. A GF transfer
is also created that in each quarter accomplishes the following:

* The Dedicated Highway Bridge Trust Fund (DHBTF) will receive
$16,498,255 (annual amount is $65,993,020);

* The Mass Transportation Trust Fund (MTTF) will receive $15,665,245
(annual amount is $62,660,980).

Section two of the bill would amend § 503 of the Vehicle and Traffic
Law to end the current transfer of the first $40.7 million of the
Driver Responsibility Act (DRA) receipts to the General Fund.
Instead, all revenues from the DRA will be directed to the DHBTF. The
DHBTF transfer in section one was reduced to reflect this additional
amount.

Current law requires an annual transfer of $169,354,000 from the MVGF
to the Dedicated Funds ($106,693,020 to the DHBTF and $62,660,980 to
the MTTF). This transfer occurs on a monthly basis from non-dedicated
motor vehicle receipts until the transfer amount has been met.

Current law also requires that the first $40.7 million of the Driver
Responsibility Act receipts collected each year be directed to the
MVGF

This bill would replace the identification of specific motor vehicle
fee revenue streams as they flow into the GF with DRA revenue going
directly onto a dedicated fund and a simple GF transfer to the correct
dedicated funds.

Budget Implications:

This bill is revenue neutral and there is no impact on overall revenue
for the DHBTF, MTTF or General Fund.

Effective Date: This bill takes effect immediately.

Part X - Comprehensive estate tax reform

Purpose:


This bill would amend the estate tax to: (1) increase the exclusion
threshold to the amount of the current federal unified credit over 5
years; (2) decrease the top estate tax rate, and (3) require the
add-back of certain gifts and incorporate applicable Internal Revenue
Code (IRC) provisions. The bill would also repeal the generation
skipping transfer (GST) tax in Tax Law Article 26-B.

Statement in Support, Summary of Provisions, Existing Law and Prior
Legislative History:

New York's estate tax currently conforms to the IRC with all
amendments through July 1, 1998, except that the exclusion amount is
fixed at $1 million The estate tax is commonly known as a "pick-up"
tax, because the tax is equal to the federal credit for state estate
taxes, as it existed on July 22, 1998.

This tax is woefully out of date. It is tied to a federal law that no
longer exists in practical effect, because the IRC has undergone
significant amendments over the last 15 years that have not been
adopted by New York For example, the credit for state estate taxes -
the base of New York's estate tax - no longer exists in federal law.
Moreover, when the current State exclusion amount of $1 million was
set, it was not indexed to inflation or tied to the periodic increases
in the federal estate tax exclusion amount The federal estate tax
exclusion amount has been raised to $5.25 million and indexed to
inflation, leaving New York significantly out of sync. New York is one
of only 15 states with an estate tax and only two states currently
have a lower exemption.

Consistent with Governor Cuomo's Tax Relief Commission Report, this
bill would increase the New York exclusion amount to the federal
amount of $5.25 million over four years, with the exclusion indexed to
inflation thereafter. Many estates of middle class individuals
(including small business owners and family farmers) will no longer be
subject to the tax as a result of increasing the exclusion amount. The
bill would also phase down the top tax rate from 16 percent to 10
percent by State Fiscal Year 201718. This will address an incentive
for wealthy New Yorkers to leave the State. It would also require
certain gifts made after April 1, 2014 to be included in a decedent's
New York gross estate, closing a loophole by preventing deathbed gifts
from escaping the estate tax.

The bill would also repeal the GST tax in Article 26-B of the Tax Law,
as recommended by Governor Cuomo's Tax Reform and Fairness Commission
Currently, federal law imposes estate, gift and GST taxes as part of a
comprehensive scheme for the taxation of wealth transfers. Federal law
also provides for a unified credit that is applied to each of these
taxes so that all such wealth transfers receive equivalent tax
treatment. New York's gift tax was repealed, effective January 1,
2000. The current GST is based on a federal credit for state GST taxes
that expired in 2004 Moreover, that federal credit, and therefore, New
York's GST tax, applied only to certain specific types of
generation-skipping transfers (i.e., distributions and terminations of
trusts that occurred at the same time and as the result of the death
of an individual) Because the federal GST tax already provides an
effective disincentive to wealth transfers to grandchildren and later


generations, New York's tax is largely unnecessary to prevent estate
tax avoidance.

The current GST tax affects a few dozen taxpayers each year, yields
minimal annual revenue, and frequently causes taxpayer confusion.
Repealing this tax would result in minimal revenue loss and provide
taxpayer relief.

A significant portion of the bill creates an appendix to the Tax Law
of all of the IRC provisions, as amended through January 1, 2014,
which are relevant to the estate tax. The current appendix, which was
enacted by § 2 of Chapter 1013 of the laws of 1962, and periodically
amended, is based on the 1998 version of the IRC. This bill would
repeal the outdated appendix in Chapter 1013, and replace it with a
new appendix of current IRC provisions located in the consolidated
law.

Budget Implications:

Enactment of this bill is necessary to implement the 2014-2015
Executive Budget. It would reduce revenues by $33 million in SFY
2014-15, $175 million in SFY 2015-16, $371 million in SFY 2016-17,
$612 million in SFY 2017-18 and $757 million in SFY 2018-19.

Effective Date:

This bill would take effect on April 1, 2014 and would apply to
estates of decedents dying on or after that date.

Part Y - Repeal the Boxing and Wrestling Exhibitions Tax

Purpose:

This bill would repeal Article 19 of the Tax Law, which imposes the
State's Boxing and Wrestling Exhibitions Tax

Statement in Support, Summary of Provisions, Existing Law, and Prior
Legislative History:

This bill would repeal Article 19 of the Tax Law, which imposes the
State's Boxing and Wrestling Exhibitions Tax on a promoter's gross
receipts from ticket sales to attend the event and on the promoter's
sale of broadcast rights to the event, at the rate of three percent.
The bill would also repeal section 1820 of the Tax Law, which imposes
misdemeanor penalties for willful failure to comply with provisions of
Article 19.

The effect of repealing the Article 19 tax is that State and local
sales taxes on admission charges would arise on the charge for tickets
sold to boxing and wrestling events held in this State, regardless of
where the ticket is sold. Tax Law § 1105(f)(1) imposes sales tax on
admission charges including admissions to sporting events, but
excludes from sales tax admission charges to boxing, sparring, or
wrestling matches or exhibitions which are taxed by another law of the
State. By repealing the Article 19 tax, the State and local sales tax
on admission charges to such events will automatically apply, because
the exclusion condition is no longer met.


The replacement of the boxing and wrestling tax with the sales tax on
admissions to boxing and wrestling bouts was recommended by the New
York State Tax Reform and Fairness Commission to create more
consistent tax treatment between boxing and wrestling events and other
sporting events.

The bill would also make conforming amendments to Chapter 912 of the
Laws of 1920, which authorized the State Athletic Commission to
administer boxing and wrestling events.

Budget Implications:

Enactment of this bill is necessary to implement the 2014-2015
Executive Budget because it would implement a tax simplification
recommendation of the Tax Reform and Fairness Commission and has no
impact on the State's Financial Plan.

Effective Date:

The bill would take effect September 1, 2014. The bill would apply to
sales of tickets to events occurring on or after the effective date,
whether or not the admission was paid prior to that date, unless the
tickets were actually sold and delivered to the purchaser prior to
that date.

Part Z - Extend Monticello Raceway Video Lottery Terminal rates for
one year

Purpose:

This bill would extend for one year the current distribution of video
lottery gaming revenue at Monticello Raceway (Monticello).

Statement in Support, Summary of Provisions, Existing Law, and Prior
Legislative History:

This bill would extend for one year the current commission rate paid
to Monticello as a video lottery agent. In 2008, Monticello was given
a higher commission rate for a five-year period in exchange for opting
out of participation in a capital award program. Thus, the five-year
rate sunset was applied to coincide with the five-year period other
facilities were provided for approval of capital expenditures eligible
for reimbursement through the program. The capital award program was
extended for a sixth year (to 2014) by chapter 454 of the Laws of 2012
and is proposed to be extended to 2015 by the 2014-2015 Executive
Budget. Since the expiration of Monticello's rate would result in loss
of the enhanced commission, but would not provide for participation in
the capital award program, this bill would extend Monticello's rate
for an additional year to maintain the original framework of
Monticello's rate structure and keep its duration consistent with the
capital award program.

Section 1 of the bill amends Section 1612(b)(1)(ii)(F) of the Tax Law
to extend from six to seven years the forty-one percent vendor fee
paid to a vendor track located in Sullivan County and within sixty
miles from any gaming facility in a contiguous state.


Section 2 of the bill provides for an immediate effective date that
shall be deemed in effect on and after April 1, 2014.

Budget Implications: Enactment of this bill is necessary to implement
the 2013-14 Executive Budget. It would decrease All Funds revenue by
$3 million in SFY 2014-15.

Effective Date: This bill takes effect after April 1, 2014.

Part AA - Extend certain tax rates and certain simulcasting provisions
for one year

Purpose:

This bill would extend for one additional year various provisions of
the Racing, PariMutuel Wagering and Breeding (Racing) Law which expire
during the 2014-15 fiscal year.

Summary of Provisions, Existing Law, Prior Legislative History, and
Statement in Support:

Section 1 would amend Racing Law § 1003(a) to extend the June 30, 2014
expiration date for in-home simulcasting.

Section 2 would amend Racing Law § 1007(3)(d) to extend the current
percentage of total pools allocated to purses that a track located in
Westchester County receives from a franchised corporation, which
currently are scheduled to expire on June 30, 2014.

Section 3 would amend the opening paragraph of Racing Law § 1014, to
continue the provisions allowing simulcasting of out-of-state
thoroughbred races on any day the Saratoga thoroughbred track is
operating, which currently are scheduled to expire on June 30, 2014.

Section 4 would amend Racing Law § 1015(1) to extend the provisions
governing the simulcasting of races conducted at out-of-state harness
tracks, which currently are scheduled to expire on June 30, 2014.

Section 5 would amend the opening paragraph of Racing Law § 1016(1) to
continue the provisions governing the simulcasting of out-of-state
thoroughbred races on any day the Saratoga thoroughbred track is
closed, which currently are scheduled to expire on June 30, 2014.

Section 6 would amend the opening paragraph of section 1018 of the
racing, pari-mutuel wagering and breeding law to extend the current
distribution of revenue from out-of-state simulcasting during the
Saratoga meet, which expired on September 8, 2013.

Section 7 would amend § 32 of chapter 281 of the Laws of 1994 to
extend the current amount of off-track betting wagers on New York
Racing Association, Inc. (NYRA) pools dedicated to purse enhancement,
which currently expire on June 30, 2014.

Section 8 would amend § 54 of chapter 346 of the Laws of 1990 to
continue binding arbitration for disagreements. These provisions
currently expire on July 1, 2014.


Section 9 would amend Racing Law § 238(1)(a) to continue the current
distribution of revenue from on-track wagering on NYRA races, which
currently is scheduled to expire on December 31, 2014.

Extending these provisions would maintain the pari-mutuel betting and
simulcasting structure that is currently in place in New York State.
The provisions extended by sections one through six of this bill were
first enacted in 1994 and section seven was enacted in 1990. These
provisions were extended numerous times since their original
enactment, and most recently in 2013.

Budget Implications:

Enactment of this bill is necessary to implement the 2014-2015
Executive Budget because it maintains the current pari-mutuel betting
structure in New York State.

Effective Date:

This bill takes effect immediately.

Part BB - Extend the Video Lottery Gaming (VLG) vendor's capital
awards program for one year

Purpose:

This bill would extend for one year the deadline to receive approval
and to complete capital projects that are reimbursed through the Video
Lottery Gaming (VLG) vendor's capital award program.

Summary of Provisions, Existing Law, Prior Legislative History, and
Statement in Support:

This bill would extend by one year, until April 1, 2015, the deadline
to receive approval for capital projects to be reimbursed through the
VLG vendor's capital award program. The bill also extends by one year,
until April 1, 2017, the deadline to complete these projects. For
certain vendor tracks located west of State Route 14, these deadlines
are extended to April 1, 2019 for approvals and to April 1, 2021 for
completion.

Budget Implications:

Enactment of this bill is necessary to implement the 2014-2015
Executive Budget because it maintains the current VLG revenue stream.

Effective Date: This bill takes effect immediately.

Part CC - Repeal Article 12 of the Tax Law

Purpose: This bill would repeal Article 12 of the Tax Law and make
conforming changes to other provisions of law that reference it.

Statement in Support, Summary of Provisions, Existing Law, and Prior
Legislative History:


Article 12 of the Tax Law imposes a tax on all sales and deliveries or
transfers of shares or certificates of stock With the creation of the
Municipal Assistance Corporation (MAC) to provide financial assistance
to New York City, these revenues were used as additional security for
MAC bonds In 1981, a 100% rebate of the tax was instituted, but the
tax itself was kept in place to continue backing the MAC bonds. The
MAC bonds were retired in 2008, which means the backing of these
revenues is no longer needed for this purpose.

This bill would repeal Article 12 and also would repeal related funds
(State Finance Law sections 92-B and 92-I, which is the Incentive
Fund). The remaining sections of the bill make conforming changes to
the Tax Law, Banking Law, Public Authorities Law, State Finance Law,
and the Administrative Code of the City of New York.

This act would take effect June 1, 2014, however, the repeal of
Incentive Fund would not take effect until two years after the
effective date of this act, and a taxpayer's right to claim a rebate
would be preserved for those two years. This would allow taxpayers,
who may have paid the tax before its repeal, the full statutory two
years currently. allowed to file for a rebate of the tax paid.

Budget Implications:

Enactment of this bill is necessary to implement the 2014-2015
Executive Budget because it would implement a tax simplification
recommendation of the Tax Reform and Fairness Commission and has no
impact on the State's Financial Plan.

Effective Date:

The bill would take effect on June 1, 2014. However, the repeal of the
Incentive Fund in section 10 of the bill would not take effect until
two years from the date this act takes effect.

Part DD - Align mobility and personal income tax filings for the
self-employed

Purpose:

This bill would allow self-employed individuals who are subject to the
Metropolitan Commuter Transportation Mobility Tax ("MCTMT") to file
their MCTMT returns at the same time as their personal income tax
returns.

Statement in Support, Summary of Provisions, Existing Law, and Prior
Legislative History:

This is a new bill recommended by the New York State Tax Reform and
Fairness Commission. It would change the due dates for filing returns
and making estimated tax payments for self-employed individuals
subject to the MCTMT. The bill would uncouple the due date for
estimated MCTMT payments for self-employed individuals from the date
for estimated MCTMT payments for employers (i e., April 30, July 31,
October 31, January 31). Instead, such payments would be due on the
same date as quarterly estimated personal income tax payments (i.e.,
April 15, June 15, September 15, January 15). Taxpayers would be


allowed to file combined returns for their personal income tax and
MCTMT, and the Tax Department would be authorized to pursue joint
assessments and actions for the two taxes. The bill also would change
the MCTMT return due date from April 30 to April 15, to conform to the
personal income tax due date.

Allowing self-employed individuals to file their MCTMT returns in
conjunction with their personal income tax returns, and to make their
quarterly estimated MCTMT payments with their quarterly estimated
personal income tax payments, would simplify tax compliance for these
taxpayers.

Budget Implications:

Enactment of this bill is necessary to implement the 2014-2015
Executive Budget. It would implement a tax simplification
recommendation of the Tax Reform and Fairness Commission and has no
impact on the State's Financial Plan.

Effective Date:

This bill takes effect immediately and applies to taxable years
beginning January 1, 2015.

Part EE - Make technical amendments to the commercial gaming law

Purpose: This bill would allow for the distribution of moneys in the
Commercial Gaming Revenue Fund for support of education to be made in
the year received. It also makes technical changes to the Upstate New
York Gaming and Economic Development Act of 2013.

Statement in Support, Summary of Provisions, Existing Law, and Prior
Legislative History:

This bill would allow revenue from commercial gaming dedicated to
support education to be distributed following monthly transfers to
cover a shortfall, if any, in the Video Lottery Education Fund. Under
current law, commercial gaming revenue dedicated to support education
may not be distributed until the fiscal year following receipt of the
revenue.

Section one of the bill would amend State Finance Law § 97-nnnn(4) to
require transfers to the Video Lottery Education Fund to be made on a
monthly basis, and allows revenue to be distributed to support
education in the year revenue is received.

Section two of the bill would amend State Finance Law § 97-nnnn(5) to
make technical corrections to law references.

Section three of the bill would amend section 52 of Chapter 174 of the
Laws of 2013 to make technical corrections to clarify the effective
dates of certain provisions of Upstate New York Gaming and Economic
Development Act of 2013.

Section four of the bill would amend State Finance Law § 99-h(3-a) to
clarify that payments of regional county aid equal 10 percent of
exclusivity payments received by the State.


Section five of the bill would amend Tax Law § 1617-a(g) to extend the
term of video lottery gaming licenses issued before July 30, 2013
until the applicant's next birthday following June 30, 2014.

Section six of the bill provides the effective dates.

Budget Implications:

Enactment of this bill is necessary to implement the 2014-2015
Executive Budget, because it would allow revenue from commercial
gaming dedicated to support education to be used in the year received.

Effective Date:

This bill would take effect immediately, provided, however, that
section one would take effect on April 1, 2015 and section three would
be deemed to have taken effect on the same date as Chapter 174 of the
Laws of 2014.

Part FF - Provide a two-year property tax freeze through a refundable
personal income tax credit

Purpose:

This bill would create a refundable personal income tax credit for
homeowners which would effectively hold property taxes on their
primary residences constant for two years.

Statement in Support, Summary of Provisions, Existing Law, and Prior
Legislative History:

New York homeowners are subject to some of the highest property tax
bills in the nation, whether measured in absolute terms or as a
percentage of income or home value. Property taxes have seriously
burdened New York's working families and senior citizens and hindered
job growth. While progress has been made and should continue under the
property tax cap legislation, there is a need to further reduce the
property tax burden.

This bill effectively freezes property taxes on the primary residences
of homeowners with annual incomes at or less than $500,000 in local
governments and school districts that stay within the cap for the next
two years. This will be effective for school districts starting with
the 2014-15 school year and for local governments in fiscal years
beginning in 2015.

In order for homeowners in their jurisdiction to receive the tax
credit in the second year, school districts and local governments must
continue to stay within the tax cap and must work together to develop
and implement plans for sharing or consolidating services that, when
implemented, will achieve real savings for taxpayers.

Budget Implications:

Enactment of this bill is necessary to implement the 2014-2015
Executive Budget because it would reduce All Funds receipts by a total


of $400 million in SFY 2014-15, $976 million in SFY 2015-16, and $475
million in SFY 2016-17.

Effective Date: This bill takes effect immediately and applies to
taxable years beginning on or after January 1, 2014.

view full text
download pdf
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

    S. 6359                                                  A. 8559

                      S E N A T E - A S S E M B L Y

                            January 21, 2014
                               ___________

IN  SENATE -- A BUDGET BILL, submitted by the Governor pursuant to arti-
  cle seven of the Constitution -- read twice and ordered  printed,  and
  when printed to be committed to the Committee on Finance

IN  ASSEMBLY  --  A  BUDGET  BILL, submitted by the Governor pursuant to
  article seven of the Constitution -- read once  and  referred  to  the
  Committee on Ways and Means

AN ACT to amend the tax law, the general municipal law, the urban devel-
  opment  corporation  act,  the  business  corporation law, the general
  associations law, and the administrative code of the city of New York,
  in relation to reforming taxation of  business  corporations;  and  to
  repeal various provisions of the tax law relating thereto (Part A); to
  amend  the real property tax law, in relation to the STAR registration
  program (Part B); to amend chapter 540 of the laws of  1992,  amending
  the real property tax law relating to oil and gas charges, in relation
  to  the  effective date of such chapter (Part C); to amend the racing,
  pari-mutuel wagering and  breeding  law,  in  relation  to  increasing
  racing  regulatory fees (Part D); to amend the tax law, in relation to
  modifying the signature requirement on e-filed returns prepared by tax
  professionals (Part E);  to  amend  the  real  property  tax  law,  in
  relation  to cost of living adjustments for Enhanced STAR (Part F); to
  amend part I of chapter 58 of the laws of 2006, relating to  providing
  an enhanced earned income tax credit, in relation to the effectiveness
  thereof  (Part  G);  to  amend the general obligations law and the tax
  law, in relation to authorizing electronic tax clearances for  profes-
  sional  and  business  licenses (Part H); to amend the tax law and the
  administrative code of the city of New York,  in  relation  to  taxing
  residents  who  are grantors of exempt resident trusts that qualify as
  non-grantor incomplete gift trusts on the income from such trusts  and
  taxing  residents  who  are beneficiaries of all other exempt resident
  trusts or nonresident  trusts  on  the  distributions  of  accumulated
  income  that  they receive from such trusts (Part I); to amend the tax
  law and the administrative code of the city of New York,  in  relation
  to  eliminating  the  personal  income  tax add-on minimum tax; and to
  repeal certain provisions of such laws relating thereto (Part  J);  to
  amend the tax law, in relation to adding an enhanced real property tax
  circuit  breaker;  and  to  repeal  paragraph  14 of subsection (e) of

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD12674-01-4

S. 6359                             2                            A. 8559

  section 606 of the tax law, relating to certain reports (Part  K);  to
  amend  the  tax  law,  in  relation  to providing a credit for renters
  against the personal income tax (Part L); to amend  the  tax  law,  in
  relation  to  the  prepayment  element of the family tax relief credit
  (Part M); to amend  the  tax  law,  in  relation  to  eliminating  the
  personal income tax filing requirement for residents having no liabil-
  ity  because income does not exceed the New York standard deduction if
  they do not file a federal income tax return (Part N);  to  amend  the
  tax  law,  in  relation  to  extending  the  empire  state  commercial
  production tax credit (Part O); to amend the public  housing  law,  in
  relation  to  extending  the  credit against income tax for persons or
  entities investing in low-income housing (Part P); to amend the  envi-
  ronmental conservation law, the tax law and the general municipal law,
  in relation to eligibility for participation in the brownfield cleanup
  program,  and  assignment of the brownfield redevelopment tax credits;
  to amend part H of chapter 1 of the laws of 2003, amending the tax law
  relating to brownfield redevelopment tax  credits,  remediated  brown-
  field  credit for real property taxes for qualified sites and environ-
  mental remediation insurance credits, in relation to tax  credits  for
  certain  sites;  to  amend  the  environmental  conservation  law,  in
  relation to hazardous waste generator fees and  taxes;  to  amend  the
  environmental  conservation  law,  the  public authorities law and the
  state finance  law,  in  relation  to  the  environmental  restoration
  program; and to repeal certain provisions of the environmental conser-
  vation law and the tax law relating thereto (Part Q); to amend the tax
  law,  in relation to reforming the investment tax credit, reducing the
  tax rate for upstate manufacturers and providing a tax credit for real
  property taxes to New York manufacturers; to amend the economic devel-
  opment law, in relation to the excelsior investment tax credit; and to
  repeal certain provisions of the tax law  relating  to  the  financial
  services  investment tax credit (Part R); to amend the economic devel-
  opment law, the tax law, the transportation  law,  the  administrative
  code  of the city of New York and the New York state urban development
  corporation act, in relation to repealing the franchise tax  on  farm-
  ers',  fruit growers', and other like agricultural corporations organ-
  ized and operated on a co-operative basis; and to repeal  section  185
  of  the tax law relating to franchise tax on farmers', fruit growers',
  and other like agricultural corporations organized and operated  on  a
  co-operative  basis;  to  repeal  sections 187-j, 187-k, 187-l, 187-m,
  187-q, 187-r and 187-s of the tax law relating to certain tax credits;
  to repeal paragraph 1 of subdivision (h) of section 15, paragraph 1 of
  subdivision (g) of section 31, and certain other provisions of the tax
  law, in relation to making conforming changes (Part S); to  amend  the
  tax  law, in relation to providing a credit for excise tax on telecom-
  munication services for businesses located in tax-free NY areas  (Part
  T);  to amend the tax law, in relation to reducing the number of hours
  of part-time work needed by employees for employer  qualification  for
  the  New  York  youth works tax credit; and to amend the labor law, in
  relation to the New York youth works tax credit  (Part  U);  to  amend
  chapter  109  of  the laws of 2006 amending the tax law and other laws
  relating to providing  exemptions,  reimbursements  and  credits  from
  various  taxes for certain alternative fuels, in relation to extending
  the alternative fuels tax exemptions for two years (Part V); to  amend
  chapter  63  of  the laws of 2000, amending the tax law and other laws
  relating to modifying the distribution of funds from the motor vehicle
  fuel excise tax and the  vehicle  and  traffic  law,  in  relation  to

S. 6359                             3                            A. 8559

  simplifying the methodology for distribution of motor vehicle receipts
  (Part  W);  to  amend  the  tax law, in relation to the estate tax; to
  repeal section 2 of chapter 1013 of the laws of 1962, amending the tax
  law relating to imposing a tax on the transfer of estates of decedents
  dying  on or after April first, nineteen hundred sixty-three, relating
  to an appendix of applicable internal revenue code provisions, and  to
  repeal  article  26-B of the tax law, relating to the generation skip-
  ping transfer tax (Part X); to amend the tax law and  chapter  912  of
  the  laws  of  1920 relating to the regulation of boxing, sparring and
  wrestling matches, in relation to making technical corrections  there-
  to; to repeal article 19 of the tax law relating to boxing and wrestl-
  ing  exhibitions tax; and to repeal section 1820 of the tax law relat-
  ing to establishing misdemeanors for certain violations of article  19
  of such law (Part Y); to amend the tax law, in relation to vendor fees
  paid  to  vendor  tracks  (Part  Z);  to amend the racing, pari-mutuel
  wagering and breeding law,  in  relation  to  licenses  for  simulcast
  facilities,  sums  relating  to  track simulcast, simulcast of out-of-
  state thoroughbred races, simulcasting of races  run  by  out-of-state
  harness  tracks  and  distributions of wagers; to amend chapter 281 of
  the laws of 1994 amending the racing, pari-mutuel wagering and  breed-
  ing law and other laws relating to simulcasting and chapter 346 of the
  laws  of  1990  amending the racing, pari-mutuel wagering and breeding
  law and other laws relating to  simulcasting  and  the  imposition  of
  certain  taxes,  in  relation to extending certain provisions thereof;
  and to amend the racing, pari-mutuel wagering  and  breeding  law,  in
  relation  to  extending certain provisions thereof (Part AA); to amend
  the tax law, in relation to capital awards to vendor tracks (Part BB);
  to amend the tax law, the banking law, the public authorities law, and
  the administrative code of the city of New York, in  relation  to  the
  stock  transfer  tax, and to repeal certain provisions of the tax law,
  the state finance law and the administrative code of the city  of  New
  York  relating thereto (Part CC); to amend the tax law, in relation to
  conforming the due dates for the metropolitan commuter  transportation
  mobility  tax  for taxpayers with income from self-employment with the
  due dates for the personal income tax (Part DD); to  amend  the  state
  finance  law,  the upstate New York gaming economic development act of
  2013 and the tax law, in relation to  moneys  appropriated  or  trans-
  ferred from the commercial gaming revenue fund (Part EE); and to amend
  the  tax  law,  the  education law, the general municipal law, and the
  real property tax law, in relation to a real property tax freeze (Part
  FF)

  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 major components of legislation
which are necessary to implement the state fiscal plan for the 2014-2015
state fiscal year. Each component is  wholly  contained  within  a  Part
identified as Parts A through FF. 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

S. 6359                             4                            A. 8559

Part  in  which  it  is  found. Section three of this act sets forth the
general effective date of this act.

                                 PART A

  Section 1. Article 32 of the tax law is REPEALED.
  S 2. Section 180 of the tax law is REPEALED.
  S 3. Section 181 of the tax law is REPEALED.
  S  4.  Section 208 of the tax law, as added by chapter 415 of the laws
of 1944, subdivision 1 as amended by chapter 576 of the  laws  of  1994,
subdivision  1-A as amended by chapter 166 of the laws of 1991, subdivi-
sion 1-B as added by section 45 of part A and paragraph (k) of  subdivi-
sion  9  as  added by section 46 of part A of chapter 389 of the laws of
1997, subdivision 3, the opening paragraph, subparagraphs 6  and  11  of
paragraph (b), and the opening paragraph of paragraph (g) of subdivision
9  as  amended and subdivision 8-B and subparagraph 3-a of paragraph (b)
of subdivision 9 as added by chapter 817 of the laws of  1987,  subdivi-
sion  4  as  amended by section 1, subdivision 6 as amended by section 2
and subparagraph 2 of paragraph (a)  of  subdivision  9  as  amended  by
section  7  of part M of chapter 407 of the laws of 1999, subdivisions 5
and 7, paragraph (a) of subdivision 8-B, subparagraph  10  of  paragraph
(b)  and  paragraph  (j)  of  subdivision 9 as amended, paragraph (d) of
subdivision 8-B and paragraph (c-1) of subdivision 9 as added and  para-
graphs  (e)  and  (f) of subdivision 8-B as relettered by chapter 170 of
the laws of 1994, subdivisions 8 and 10 as amended by chapter 133 of the
laws of 1945, subdivision 8-A as added and subparagraph 1  of  paragraph
(a)  of  subdivision  9  as  amended by chapter 778 of the laws of 1972,
paragraph (b) of subdivision 8-A and paragraph (i) of subdivision  9  as
amended  by chapter 779 of the laws of 1972, subdivision 9 as amended by
chapter 713 of the laws of 1961,  paragraph  (a)  of  subdivision  9  as
amended by chapter 203 of the laws of 1962, subparagraphs 5, 9 and 10 of
paragraph  (a) and subparagraphs 8 and 9 of paragraph (b) of subdivision
9 as amended by chapter 61 of the laws of  1989  and  paragraph  (f)  of
subdivision  9  as separately amended by sections 278 and 347 of chapter
61 of the laws of 1989, clause (i) of subparagraph 5 of paragraph (a) of
subdivision 9 as amended by section 2 and subparagraph 20  of  paragraph
(b)  of  subdivision  9 as added by section 3 of part C of chapter 25 of
the laws of 2009, subparagraph 6 of paragraph (a) of  subdivision  9  as
added  by  chapter  895 of the laws of 1975 and as renumbered by chapter
613 of the laws of 1976, subparagraph 7 of paragraph (a) of  subdivision
9  as  added  by chapter 33 of the laws of 1978, subparagraph 8 of para-
graph (a) and subparagraph 7  of  paragraph  (b)  of  subdivision  9  as
amended by chapter 639 of the laws of 1986, subparagraph 11 of paragraph
(a) of subdivision 9 as added by chapter 15 of the laws of 1983, subpar-
agraph  12  of  paragraph  (a),  subparagraph  4-a  of paragraph (b) and
subparagraph 2 of paragraph (h) of subdivision 9 as amended and subpara-
graph 13 of paragraph (a) of subdivision 9 as added by  chapter  760  of
the  laws  of 1992, subparagraph 14 of paragraph (a) of subdivision 9 as
added by section 101 and paragraphs (l) and  (m)  of  subdivision  9  as
added  by  section  102  of  part  A  of chapter 56 of the laws of 1998,
subparagraph 15 of paragraph (a) of subdivision 9 as amended by  section
1 of part ZZ of chapter 63 of the laws of 2003, subparagraph 16 of para-
graph  (a)  of  subdivision 9 as added by section 1 of part K3, subpara-
graph 16 of paragraph (b) of subdivision 9 as added by section 2 of part
K3, subparagraph 17 of paragraph  (b)  of  subdivision  9  as  added  by
section  2  of part O3, and paragraphs (o), (p) and (q) of subdivision 9

S. 6359                             5                            A. 8559

as added by section 3 of part O3 of chapter 62  of  the  laws  of  2003,
subparagraph  18 of paragraph (a) of subdivision 9 as added by section 3
of part C and paragraph (o) of subdivision 9 as amended by section 2  of
part  E  of  chapter 59 of the laws of 2013, subparagraph 3 of paragraph
(b) of subdivision 9 as amended by chapter 895  of  the  laws  of  1975,
subparagraph  4  of paragraph (b) and subparagraph 4 of paragraph (f) of
subdivision 9 as amended by chapter 190 of the laws  of  1990,  subpara-
graph  15  of  paragraph (b) of subdivision 9 as added by chapter 309 of
the laws of 1996, subparagraph 18 of paragraph (b) of subdivision  9  as
added by section 21 of part H of chapter 1 of the laws of 2003, subpara-
graph 19 of paragraph (b) of subdivision 9 as added by section 1 of part
HH1  of  chapter  57  of the laws of 2008, paragraphs (c-2) and (c-3) of
subdivision 9 as added by section 10 of part Y of chapter 63 of the laws
of 2000, paragraph (g) of subdivision 9 as added by chapter 178  of  the
laws  of  1965, subparagraph 1 and clauses (B) and (C) of subparagraph 3
of paragraph (g) of subdivision 9 as amended by chapter 613 of the  laws
of  1976, clause (A) of subparagraph 1 of paragraph (g) of subdivision 9
as separately amended by chapters 675 and  836  of  the  laws  of  1977,
clause  (B)  of  subparagraph 1, clause (A) of subparagraph 2 and clause
(A) of subparagraph 3 of paragraph (g) of subdivision 9  as  amended  by
chapter  675 of the laws of 1977, item 1 of clause (B) of subparagraph 1
of paragraph (g) of subdivision 9 as amended by chapter 972 of the  laws
of  1984, clause (B) of subparagraph 2 of paragraph (g) of subdivision 9
as amended by chapter 365 of the laws of 1979, clause  (C)  of  subpara-
graph  2 of paragraph (g) of subdivision 9 as amended by chapter 1005 of
the laws of 1970, paragraph (h) of subdivision 9 as amended  by  chapter
606  of  the  laws  of  1984, paragraph (n) of subdivision 9 as added by
section 1 of part O of chapter 85 of the laws of 2002, subdivision 12 as
added by chapter 828 of the laws of 1977, subdivisions 13, 14, and 15 as
added by section 1 of LBD number 74021-03-4 and subdivision 19 as  added
by chapter 681 of the laws of 1997, is amended to read as follows:
  S 208. Definitions. As used in this article:
  1. The term "corporation" includes (a) an association within the mean-
ing  of  paragraph  three  of  subsection  (a)  of section seventy-seven
hundred one of the internal revenue code (including a limited  liability
company), (b) a joint-stock company or association, (c) a publicly trad-
ed  partnership  treated  as  a corporation for purposes of the internal
revenue code pursuant to section seventy-seven hundred four thereof  and
(d)  any business conducted by a trustee or trustees wherein interest or
ownership is evidenced  by  certificate  or  other  written  instrument.
"DISC"  and  "former DISC" mean any corporation which meets the require-
ments of subsection (a) of section nine hundred ninety-two of the inter-
nal revenue code[;].
  1-A. The term "New York S corporation"  means,  with  respect  to  any
taxable  year, a corporation subject to tax under this article for which
an election is in effect pursuant  to  subsection  (a)  of  section  six
hundred  sixty  of  this  chapter  for such year, any such year shall be
denominated a "New York S year", and such election shall be  denominated
a  "New  York S election". The term "New York C corporation" means, with
respect to any taxable year, a corporation subject  to  tax  under  this
article  which  is not a New York S corporation, and any such year shall
be denominated a "New York C year". The term  "termination  year"  means
any  taxable  year of a corporation during which the New York S election
terminates on a day other than the first day of such year.  The  portion
of  the  taxable  year ending before the first day for which such termi-
nation is effective shall be denominated the "S  short  year",  and  the

S. 6359                             6                            A. 8559

portion  of  such  year beginning on such first day shall be denominated
the "C short year". The term "New York S  termination  year"  means  any
termination  year  which  is  not also an S termination year for federal
purposes.
  1-B. The term "QSSS" means a corporation which is a qualified subchap-
ter  S  subsidiary  as defined in subparagraph (B) of paragraph three of
subsection (b) of section thirteen hundred  sixty-one  of  the  internal
revenue  code. The term "exempt QSSS" means a QSSS exempt from tax under
this article as provided in paragraph (k) of subdivision  nine  of  this
section,  or a QSSS described in subclause (i) of clause (B) of subpara-
graph two of paragraph (k) of subdivision nine of this section,  wherein
the parent corporation of the QSSS is subject to tax under this article,
and  the  assets,  liabilities,  income  and  deductions of the QSSS are
treated as the assets, liabilities, income and deductions of the  parent
corporation. Where a QSSS is an exempt QSSS, then for all purposes under
this article:
  (a)  the  assets,  liabilities, income, deductions, property, payroll,
receipts, capital, credits, and all other tax attributes and elements of
economic activity of the QSSS shall be deemed to be those of the  parent
corporation,
  (b)  the stocks, bonds and other securities issued by, and any indebt-
edness from, the QSSS shall not be [subsidiary,] investment or  business
capital of the parent corporation,
  (c)  transactions between the parent corporation and the QSSS, includ-
ing the payment of interest and  dividends,  shall  not  be  taken  into
account, and
  (d)  general  executive  officers  of  the  QSSS shall be deemed to be
general executive officers of the parent corporation.
  2. The term "taxpayer" means any corporation subject to tax under this
article[;].
  3. The term "subsidiary" means  a  corporation  of  which  over  fifty
percent  of  the number of shares of stock entitling the holders thereof
to vote for the election of  directors  or  trustees  is  owned  by  the
taxpayer[;].
  4.  The  term  ["subsidiary capital" means investments in the stock of
subsidiaries  and  any  indebtedness  from  subsidiaries,  exclusive  of
accounts receivable acquired in the ordinary course of trade or business
for  services  rendered or for sales of property held primarily for sale
to customers, whether or not evidenced by written instrument,  on  which
interest  is  not claimed and deducted by the subsidiary for purposes of
taxation under article nine-A, thirty-two or thirty-three of this  chap-
ter,  provided,  however,  that,  in the discretion of the commissioner,
there shall be deducted from subsidiary capital  any  liabilities  which
are  directly  or indirectly attributable to subsidiary capital] "STOCK"
MEANS A DIRECT INTEREST IN A CORPORATION THAT IS TREATED AS  EQUITY  FOR
FEDERAL INCOME TAX PURPOSES.
  5.  (A)  The  term  "investment capital" means investments in stocks[,
bonds and other securities, corporate and governmental,] THAT  ARE  HELD
BY  THE  TAXPAYER  FOR MORE THAN SIX CONSECUTIVE MONTHS BUT ARE not held
for sale to customers in the regular course of business,  [exclusive  of
subsidiary  capital] OR, IF THE TAXPAYER MAKES THE ELECTION PROVIDED FOR
IN SUBPARAGRAPH ONE OF PARAGRAPH (A) OF SUBDIVISION FIVE OF SECTION  TWO
HUNDRED  TEN-A  OF THIS ARTICLE, ARE NOT QUALIFIED FINANCIAL INSTRUMENTS
AS DESCRIBED IN SUBDIVISION FIVE OF SECTION TWO HUNDRED  TEN-A  OF  THIS
ARTICLE.  STOCK  IN  A CORPORATION THAT IS CONDUCTING A UNITARY BUSINESS
WITH THE TAXPAYER, STOCK IN A CORPORATION THAT IS INCLUDED IN A COMBINED

S. 6359                             7                            A. 8559

REPORT WITH THE TAXPAYER PURSUANT TO THE COMMONLY OWNED  GROUP  ELECTION
IN  SUBDIVISION  FIVE  OF SECTION TWO HUNDRED TEN-C OF THIS ARTICLE, and
stock  issued  by  the  taxpayer[,  provided,  however,  that,  in   the
discretion  of  the commissioner, there] SHALL NOT CONSTITUTE INVESTMENT
CAPITAL. FOR PURPOSES OF THIS  SUBDIVISION,  IF  THE  TAXPAYER  OWNS  OR
CONTROLS,  DIRECTLY OR INDIRECTLY, LESS THAN TWENTY PERCENT OF THE STOCK
OF A CORPORATION THAT ENTITLES THE  HOLDERS  THEREOF  TO  VOTE  FOR  THE
ELECTION OF TRUSTEES  OR DIRECTORS, THAT CORPORATION WILL BE PRESUMED TO
BE  CONDUCTING  A  BUSINESS THAT IS NOT UNITARY WITH THE BUSINESS OF THE
TAXPAYER.
  (B) THERE shall be deducted from investment  capital  any  liabilities
which  are  directly  or indirectly attributable to investment capital[;
and provided, further, that investment]. IF THE AMOUNT OF THOSE  LIABIL-
ITIES EXCEEDS THE AMOUNT OF INVESTMENT CAPITAL, THE AMOUNT OF INVESTMENT
CAPITAL WILL BE ZERO.
  (C)  INVESTMENT  capital  shall  not  include any such investments the
income from which is excluded from entire net  income  pursuant  to  the
provisions  of  paragraph (c-1) of subdivision nine of this section, and
that investment capital shall be computed without regard to  liabilities
directly or indirectly attributable to such investments, but only if air
carriers  organized  in  the  United States and operating in the foreign
country or countries in which the taxpayer has its major base  of  oper-
ations  and  in which it is organized, resident or headquartered (if not
in the same country as its major base of operations) are not subject  to
any  tax based on or measured by capital imposed by such foreign country
or countries or any political subdivision  thereof,  or  if  taxed,  are
provided  an exemption, equivalent to that provided for herein, from any
tax based on or measured by capital imposed by such foreign  country  or
countries  and  from  any  such tax imposed by any political subdivision
thereof[;].
  (D) IF A TAXPAYER ACQUIRES STOCK DURING THE SECOND HALF OF ITS TAXABLE
YEAR AND OWNS THAT STOCK ON THE LAST DAY OF THE TAXABLE YEAR, IT WILL BE
PRESUMED THAT THE TAXPAYER HELD THAT STOCK FOR MORE THAN SIX CONSECUTIVE
MONTHS DURING THE TAXABLE YEAR. HOWEVER, IF THE  TAXPAYER  DOES  NOT  IN
FACT  HOLD THAT STOCK FOR MORE THAN SIX CONSECUTIVE MONTHS, THE TAXPAYER
MUST INCREASE ITS TOTAL BUSINESS CAPITAL IN THE  IMMEDIATELY  SUCCEEDING
TAXABLE  YEAR  BY  THE  AMOUNT  INCLUDED  IN INVESTMENT CAPITAL FOR THAT
STOCK, NET OF ANY LIABILITIES ATTRIBUTABLE TO  THAT  STOCK  COMPUTED  AS
PROVIDED IN PARAGRAPH (B) OF THIS SUBDIVISION.
  (E)  WHEN  INCOME  OR  GAIN  FROM  A DEBT OBLIGATION OR OTHER SECURITY
CANNOT BE  APPORTIONED  TO  THE  STATE  USING  THE  BUSINESS  ALLOCATION
PERCENTAGE  AS  A RESULT OF UNITED STATES CONSTITUTIONAL PRINCIPLES, THE
DEBT OBLIGATION OR OTHER SECURITY WILL BE INCLUDED IN  INVESTMENT  CAPI-
TAL.
  6.  (A)  The  term "investment income" means income, including capital
gains in excess of capital  losses,  from  investment  capital,  to  the
extent  included  in  computing  entire  net  income, less, [(a)] in the
discretion of the commissioner, any  INTEREST  deductions  allowable  in
computing  entire  net income which are directly or indirectly attribut-
able to investment capital or investment income[, and (b)  such  portion
of  any  net  operating loss deduction allowable in computing entire net
income, as the investment income, before such deduction, bears to entire
net income, before such deduction,] provided, however, that in  no  case
shall  investment  income  exceed  entire net income[;]. IF THE TAXPAYER
ATTRIBUTES INTEREST DEDUCTIONS  TO  INVESTMENT  INCOME  AND  THE  AMOUNT
SUBTRACTED  EXCEEDS  INVESTMENT  INCOME,  THE  EXCESS  OF  THE  INTEREST

S. 6359                             8                            A. 8559

DEDUCTIONS OVER INVESTMENT INCOME MUST  BE  ADDED  BACK  TO  ENTIRE  NET
INCOME.
  (B)  IN LIEU OF SUBTRACTING FROM INVESTMENT INCOME THE AMOUNT OF THOSE
INTEREST DEDUCTIONS, THE TAXPAYER MAY ELECT TO REDUCE ITS TOTAL  INVEST-
MENT  INCOME  BY FORTY PERCENT. IF THE TAXPAYER MAKES THIS ELECTION, THE
TAXPAYER MUST ALSO MAKE THE ELECTIONS PROVIDED FOR IN PARAGRAPHS (B) AND
(C) OF SUBDIVISION SIX-A OF THIS SECTION. A TAXPAYER WHICH DOES NOT MAKE
THIS ELECTION BECAUSE IT HAS NO INVESTMENT CAPITAL WILL NOT BE PRECLUDED
FROM MAKING THOSE OTHER ELECTIONS.
  6-A. (A) THE TERM "OTHER  EXEMPT  INCOME"  MEANS  THE  SUM  OF  EXEMPT
SUBPART F INCOME AND EXEMPT UNITARY CORPORATION DIVIDENDS.
  (B)  "EXEMPT SUBPART F INCOME" MEANS THE INCOME, AS DEFINED IN SECTION
952 OF THE INTERNAL REVENUE CODE, RECEIVED FROM A  CORPORATION  THAT  IS
CONDUCTING A UNITARY BUSINESS WITH THE TAXPAYER BUT IS NOT INCLUDED IN A
COMBINED  REPORT  WITH  THE  TAXPAYER,  LESS,  IN  THE DISCRETION OF THE
COMMISSIONER, ANY INTEREST DEDUCTIONS DIRECTLY OR  INDIRECTLY  ATTRIBUT-
ABLE  TO  THAT INCOME.  IN LIEU OF SUBTRACTING FROM ITS EXEMPT SUBPART F
INCOME THE AMOUNT OF THOSE INTEREST DEDUCTIONS, THE TAXPAYER  MAY  ELECT
TO  REDUCE  ITS  TOTAL  EXEMPT SUBPART F INCOME BY FORTY PERCENT. IF THE
TAXPAYER MAKES THIS ELECTION, THE TAXPAYER MUST ALSO MAKE THE  ELECTIONS
PROVIDED  FOR  IN  PARAGRAPH  (B) OF SUBDIVISION SIX OF THIS SECTION AND
PARAGRAPH (C) OF THIS SUBDIVISION.  A TAXPAYER WHICH DOES NOT MAKE  THIS
ELECTION BECAUSE IT HAS NO EXEMPT SUBPART F INCOME WILL NOT BE PRECLUDED
FROM MAKING THOSE OTHER ELECTIONS.
  (C)  "EXEMPT UNITARY CORPORATION DIVIDENDS" MEANS THOSE DIVIDENDS FROM
A CORPORATION THAT IS CONDUCTING A UNITARY BUSINESS  WITH  THE  TAXPAYER
BUT IS NOT INCLUDED IN A COMBINED REPORT WITH THE TAXPAYER, LESS, IN THE
DISCRETION  OF  THE  COMMISSIONER,  ANY  INTEREST DEDUCTIONS DIRECTLY OR
INDIRECTLY ATTRIBUTABLE TO SUCH INCOME.   IN LIEU  OF  SUBTRACTING  FROM
THIS  DIVIDEND  INCOME THOSE INTEREST DEDUCTIONS, THE TAXPAYER MAY ELECT
TO REDUCE THE TOTAL AMOUNT OF THIS DIVIDEND INCOME BY FORTY PERCENT.  IF
THE  TAXPAYER  MAKES  THIS  ELECTION,  THE  TAXPAYER  MUST ALSO MAKE THE
ELECTIONS PROVIDED FOR IN PARAGRAPH  (B)  OF  SUBDIVISION  SIX  OF  THIS
SECTION AND PARAGRAPH (B) OF THIS SUBDIVISION. A TAXPAYER WHICH DOES NOT
MAKE THIS ELECTION BECAUSE IT HAS NOT RECEIVED ANY EXEMPT UNITARY CORPO-
RATION   DIVIDENDS  WILL  NOT  BE  PRECLUDED  FROM  MAKING  THOSE  OTHER
ELECTIONS.
  (D) IF THE TAXPAYER ATTRIBUTES INTEREST  DEDUCTIONS  TO  OTHER  EXEMPT
INCOME AND THE AMOUNT SUBTRACTED EXCEEDS OTHER EXEMPT INCOME, THE EXCESS
OF  THE  INTEREST DEDUCTIONS OVER OTHER EXEMPT INCOME MUST BE ADDED BACK
TO ENTIRE NET INCOME. IN NO CASE SHALL OTHER EXEMPT INCOME EXCEED ENTIRE
NET INCOME.
  7. (a) The term  "business  capital"  means  all  assets,  other  than
[subsidiary capital,] investment capital and stock issued by the taxpay-
er,  less liabilities not deducted from [subsidiary or] investment capi-
tal [except that cash on hand and on deposit shall be treated as invest-
ment capital  or  as  business  capital  as  the  taxpayer  may  elect].
BUSINESS  CAPITAL  SHALL INCLUDE ONLY THOSE ASSETS THE INCOME OR EXPENSE
OF WHICH ARE PROPERLY REFLECTED (OR WOULD HAVE BEEN  PROPERLY  REFLECTED
IF  NOT  FULLY  DEPRECIATED  OR EXPENSED OR DEPRECIATED OR EXPENSED TO A
NOMINAL AMOUNT) IN THE COMPUTATION OF ENTIRE NET INCOME FOR THE  TAXABLE
YEAR.
  (b)  Provided, however, "business capital" shall not include assets to
the extent employed for  the  purpose  of  generating  income  which  is
excluded  from entire net income pursuant to the provisions of paragraph
(c-1) of subdivision nine of this section and shall be computed  without

S. 6359                             9                            A. 8559

regard  to  liabilities  directly  or  indirectly  attributable  to such
assets, but only if air carriers organized  in  the  United  States  and
operating  in the foreign country or countries in which the taxpayer has
its  major  base of operations and in which it is organized, resident or
headquartered (if not in the same country as its  major  base  of  oper-
ations)  are  not  subject  to  any  tax based on or measured by capital
imposed by such foreign country or countries or any  political  subdivi-
sion thereof, or if taxed, are provided an exemption, equivalent to that
provided  for  herein,  from  any  tax  based  on or measured by capital
imposed by such foreign country or  countries  and  from  any  such  tax
imposed by any political subdivision thereof[;].
  8. The term "business income" means entire net income minus investment
income[;]  AND OTHER EXEMPT INCOME. IN NO EVENT SHALL THE SUM OF INVEST-
MENT INCOME AND OTHER EXEMPT INCOME EXCEED ENTIRE  NET  INCOME.  IF  THE
TAXPAYER  MAKES  THE  ELECTION PROVIDED FOR IN SUBPARAGRAPH ONE OF PARA-
GRAPH (A) OF SUBDIVISION FIVE OF SECTION TWO HUNDRED TEN-A OF THIS ARTI-
CLE, THEN ALL INCOME FROM QUALIFIED FINANCIAL INSTRUMENTS SHALL  CONSTI-
TUTE BUSINESS INCOME.
  8-A.  Provided, however, that with respect to a DISC or a former DISC,
the following provisions shall apply:
  (a) investments in the stocks, bonds or other securities of a DISC  or
any  indebtedness from a DISC shall not be treated as [either subsidiary
capital or] investment capital under [subdivisions four or]  SUBDIVISION
five of this section,
  (b)  any amounts deemed distributed from a DISC or a former DISC which
are taxable as dividends pursuant to  subsection  (b)  of  section  nine
hundred  ninety-five  of  the  internal revenue code of nineteen hundred
fifty-four shall be treated as business income, except any such  amounts
from  a  former  DISC attributable to amounts includible in a taxpayer's
entire net income for a prior taxable year  under  subparagraph  (B)  of
paragraph (i) of subdivision nine of this section shall be excluded from
entire net income,
  (c)  any gain recognized for federal income tax purposes on the dispo-
sition of stock in a DISC, and any gain recognized on the disposition of
stock in a former DISC, includible in gross income as a dividend  pursu-
ant  to subsection (c) of section nine hundred ninety-five of the inter-
nal revenue code of nineteen hundred fifty-four,  shall  be  treated  as
business income, and
  (d)  except  as  provided in paragraph (i) of subdivision nine of this
section, any actual distribution from a DISC or a former DISC  shall  be
treated  as  business  income  except  an  actual distribution which for
federal income tax purposes is treated as made out  of  "other  earnings
and  profits"  under  section  nine  hundred  ninety-six of the internal
revenue code of nineteen hundred fifty-four, in which case  such  actual
distribution  shall  be treated as [either subsidiary income or] invest-
ment income under this article.
  [8-B. (a) The term "minimum taxable income" shall mean the entire  net
income of the taxpayer for the taxable year:
  (1) increased by the amount of the federal items of tax preference set
forth  in  section  fifty-seven  of  the internal revenue code (with the
modifications set forth in paragraph (b)  of  this  subdivision),  which
items  of  tax preference shall have the same meaning and be computed in
the same manner as under section fifty-seven  of  the  internal  revenue
code,
  (2) determined with the federal adjustments described in paragraph (c)
of  this  subdivision, which adjustments shall have the same meaning and

S. 6359                            10                            A. 8559

be computed in the same manner as under sections  fifty-six  and  fifty-
eight of the internal revenue code,
  (3)  increased  by  the net operating loss deduction otherwise allowed
under paragraph (f) of subdivision nine of this section, and
  (4) reduced, for taxable years beginning after nineteen hundred  nine-
ty-three, by the alternative net operating loss deduction, as defined in
paragraph (d) of this subdivision.
  (b)  The federal items of tax preference referred to hereinabove shall
be modified by deducting "tax-exempt interest" and "accelerated depreci-
ation or amortization on certain property placed in service before Janu-
ary  1,  1987",  as  determined  under  paragraphs  five  and  seven  of
subsection (a) of section fifty-seven of the internal revenue code.
  (c) The adjustments referred to hereinabove shall be:
  (1) "Depreciation" as determined under paragraph one of subsection (a)
of  section fifty-six of the internal revenue code. For purposes of this
subparagraph, the depreciation item  of  adjustment  provided  for  here
shall  not include any amount attributable to property for which the tax
benefits of the accelerated cost recovery system are not available under
this article by reason of subparagraph ten of paragraph (b) of  subdivi-
sion nine of this section;
  (2)  "Mining  exploration  and  development costs" as determined under
paragraph two of subsection (a) of section  fifty-six  of  the  internal
revenue code;
  (3)  "Treatment  of  certain  long-term contracts" as determined under
paragraph three of subsection (a) of section fifty-six of  the  internal
revenue code;
  (4)  "Installment sales of certain property" as determined under para-
graph six of subsection (a) of section fifty-six of the internal revenue
code;
  (5) "Circulation expenditures of personal holding companies" as deter-
mined under subparagraph (C) of  paragraph  two  of  subsection  (b)  of
section fifty-six of the internal revenue code;
  (6)  "Merchant  marine capital construction funds" as determined under
paragraph two of subsection (c) of section  fifty-six  of  the  internal
revenue code;
  (7)  "Disallowance  of  passive  activity  loss"  as  determined under
subsection (b) of section fifty-eight of the internal revenue code; and
  (8) "Adjusted basis", as it appears in paragraph seven  of  subsection
(a)  of  section  fifty-six  of  the  internal revenue code, but without
taking  into  account  the  references  therein  to  paragraph  five  of
subsection (a) of section fifty-six of the internal revenue code.
  (d)  The term "alternative net operating loss deduction" means the net
operating loss deduction allowed for the taxable  year  under  paragraph
(f) of subdivision nine of this section, except as provided herein.
  (1)(A)  The  net  operating loss for any year beginning after nineteen
hundred eighty-nine which is  included  in  determining  such  deduction
shall be determined with the adjustments provided in subparagraph two of
paragraph  (a) of this subdivision, and shall be reduced by the items of
tax preference determined under subparagraph one  of  paragraph  (a)  of
this  subdivision,  attributable to such year. An item of tax preference
shall be taken into account only to the extent such item  increased  the
amount  of  the  net operating loss for the taxable year under paragraph
(f) of subdivision nine of this section.
  (B) In the case of loss years beginning before nineteen hundred  nine-
ty,  the  amount  of the net operating loss which may be carried over to
taxable years beginning after  nineteen  hundred  eighty-nine  shall  be

S. 6359                            11                            A. 8559

equal  to an amount which may be carried from the loss year to the first
taxable year of the taxpayer beginning after  nineteen  hundred  eighty-
nine.
  (2)  In  determining  the amount of such deduction, loss carryforwards
and carrybacks shall, subject to the provisions of subparagraph five  of
paragraph  (f)  of  subdivision nine of this section, be computed in the
manner set forth in paragraph two  of  subsection  (b)  of  section  one
hundred  seventy-two  of the internal revenue code, except that, for the
reference therein to taxable income,  there  shall  be  substituted  the
phrase  "ninety  percent  of  minimum  taxable income determined without
regard to the alternative net operating loss deduction".
  (3) The amount of such deduction shall not exceed  ninety  percent  of
minimum  taxable  income  determined  without  regard to such deduction,
provided, however, the term "ninety percent" shall be  read  as  "forty-
five  percent"  with  respect  to  taxable  years  beginning in nineteen
hundred ninety-four.
  (e) The tax commission may, whenever necessary in  order  to  properly
reflect  the  minimum taxable income of any taxpayer, determine the year
or period in which any item of income or deduction  shall  be  included,
without regard to the method of accounting employed by the taxpayer.
  (f) If the period covered by a report under this article is other than
the  period  covered by the report to the United States treasury depart-
ment, the minimum taxable income shall be appropriately modified  pursu-
ant to regulations promulgated by the tax commission.]
  9. The term "entire net income" means total net income from all sourc-
es,  which  shall  be  presumably  the same as the entire taxable income
[(but not alternative minimum taxable income)], WHICH, EXCEPT AS HEREIN-
AFTER PROVIDED IN THIS SUBDIVISION,
  (i) [which] the taxpayer is required to report to  the  United  States
treasury department, or
  (ii)  [which]  the  taxpayer would have been required to report to the
United States treasury department if it had not made an  election  under
subchapter s of chapter one of the internal revenue code, or
  (iii)  [which]  the  taxpayer,  in  the case of a corporation which is
exempt from federal income tax (other than the tax on unrelated business
taxable income imposed under section 511 of the internal  revenue  code)
but which is subject to tax under this article, would have been required
to  report  to  the  United  States  treasury  department  but  for such
exemption, [except as hereinafter provided, and subject to any modifica-
tion required by paragraphs (d) and (e) of subdivision three of  section
two hundred ten of this article] OR
  (IV)  IN THE CASE OF A CORPORATION ORGANIZED UNDER THE LAWS OF A COUN-
TRY OTHER THAN THE UNITED STATES,  IS  EFFECTIVELY  CONNECTED  WITH  THE
CONDUCT  OF  A  TRADE OR BUSINESS WITHIN THE UNITED STATES AS DETERMINED
UNDER SECTION 882 OF THE INTERNAL REVENUE CODE,
  (a) Entire net income shall not include:
  [(1) income, gains and losses from subsidiary  capital  which  do  not
include  the  amount of a recovery in respect of any war loss except for
such amounts from a former DISC which are  treated  as  business  income
under subdivision eight-A of this section,
  (2)  fifty  percent of dividends (A) other than from subsidiaries, and
(B) other than amounts treated  as  business  income  under  subdivision
eight-A  of  this  section,  on  shares  of  stock  which conform to the
requirements of subsection (c) of section two hundred forty-six  of  the
internal revenue code.]
  (3) bona fide gifts,

S. 6359                            12                            A. 8559

  (4) income and deductions with respect to amounts received from school
districts and from corporations and associations, organized and operated
exclusively  for  religious, charitable or educational purposes, no part
of the net earnings of which inures to the benefit of any private share-
holder or individual, for the operation of school buses,
  (5)  (i)  any  refund  or  credit of a tax imposed under this article,
article twenty-three, or FORMER article thirty-two of this chapter,  for
which  tax  no  exclusion  or  deduction  was allowed in determining the
taxpayer's entire net income under this article,  article  twenty-three,
or  FORMER article thirty-two of this chapter for any prior year, (ii) a
refund or credit of general corporation tax allowed by subdivision elev-
en of section 11-604 of the administrative code of the city of New York,
or (iii) any refund or credit  of  a  tax  imposed  under  sections  one
hundred  eighty-three,  one  hundred eighty-three-a, one hundred eighty-
four or one hundred eighty-four-a of this chapter, and
  (6) any amount treated as dividends pursuant to section  seventy-eight
of the internal revenue code and not [otherwise deductible under subpar-
agraphs  one  and  two of this paragraph] TREATED AS OTHER EXEMPT INCOME
UNDER SUBDIVISION SIX-A OF THIS SECTION;
  (7) that portion of wages and salaries paid or incurred for the  taxa-
ble year for which a deduction is not allowed pursuant to the provisions
of section two hundred eighty-C of the internal revenue code.
  [(8)  in the case of a taxpayer who is separately or as a partner of a
partnership doing an insurance business as a  member  of  the  New  York
insurance  exchange described in section six thousand two hundred one of
the insurance law, any item of income, gain, loss or deduction  of  such
business  which  is  the  taxpayer's  distributive or pro rata share for
federal income tax purposes or which the taxpayer is  required  to  take
into account separately for federal income tax purposes.]
  (9)  for taxable years beginning after December thirty-first, nineteen
hundred eighty-one, except with respect to property which is a qualified
mass commuting vehicle described in subparagraph (D) of paragraph  eight
of  subsection  (f)  of  section one hundred sixty-eight of the internal
revenue code (relating to qualified mass commuting vehicles) and proper-
ty of a taxpayer principally engaged in the conduct of  aviation  (other
than  air  freight  forwarders acting as principal and like indirect air
carriers) which is placed in service before taxable years  beginning  in
nineteen  hundred  eighty-nine,  any  amount  which  is  included in the
taxpayer's federal taxable income solely as a result of an election made
pursuant to the provisions of such paragraph eight as it was  in  effect
for  agreements  entered  into  prior to January first, nineteen hundred
eighty-four;
  (10) for taxable years beginning after December thirty-first, nineteen
hundred eighty-one, except with respect to property which is a qualified
mass commuting vehicle described in subparagraph (D) of paragraph  eight
of  subsection  (f)  of  section one hundred sixty-eight of the internal
revenue code (relating to qualified mass commuting vehicles) and proper-
ty of a taxpayer principally engaged in the conduct of  aviation  (other
than  air  freight  forwarders acting as principal and like indirect air
carriers) which is placed in service before taxable years  beginning  in
nineteen  hundred  eighty-nine, any amount which the taxpayer could have
excluded from federal taxable  income  had  it  not  made  the  election
provided  for in such paragraph eight as it was in effect for agreements
entered into prior to January first, nineteen hundred eighty-four;
  (11) the amount deductible pursuant to paragraph (j) of this  subdivi-
sion; and

S. 6359                            13                            A. 8559

  (12)  upon  the disposition of property to which paragraph (j) of this
subdivision applies, the amount, if any, by which the aggregate  of  the
amounts  described in subparagraph ten of paragraph (b) of this subdivi-
sion attributable to such property exceeds the aggregate of the  amounts
described  in  paragraph  (j)  of  this subdivision attributable to such
property; and
  [(13) if the added tax provided for in either (i)  former  subdivision
two  of section one hundred eighty-two of this chapter (relating to real
estate corporations) or (ii) former subdivision  one-a  of  section  two
hundred  nine of this chapter (relating to real estate corporations) has
been imposed upon the taxpayer,  any  income  which  has  been  used  in
computing such tax.]
  (14)  The  amount  deductible  pursuant to paragraph [(l)] (I) of this
subsection.
  [(15) In the case of an attorney-in-fact,  with  respect  to  which  a
mutual  insurance  company,  which  is  an  interinsurer or a reciprocal
insurer and is subject to tax under subdivision (a) of  section  fifteen
hundred  ten  of  this chapter, has made the election provided for under
section eight hundred thirty-five  of  the  Internal  Revenue  Code,  an
amount  equal  to the excess, if any, of the amounts paid or incurred by
such interinsurer or reciprocal insurer  in  the  taxable  year  to  the
attorney-in-fact  over  the  deduction  allowed  to such interinsurer or
reciprocal insurer with respect to amounts paid or incurred in the taxa-
ble year to the attorney-in-fact under subsection (b)  of  such  section
eight hundred thirty-five of the Internal Revenue Code.]
  (16) In the case of a taxpayer subject to the modification provided by
subparagraph  sixteen  of  paragraph (b) of this subdivision, the amount
required to be recaptured pursuant to subsection (d) of section  179  of
the  internal  revenue  code  with  respect  to property upon which such
modification was based.
  (17) FOR TAXABLE YEARS  BEGINNING  AFTER  DECEMBER  THIRTY-FIRST,  TWO
THOUSAND  TWO, THE AMOUNT DEDUCTIBLE PURSUANT TO PARAGRAPH (N-1) OF THIS
SUBDIVISION.
  (18) the amount of income or gain included in federal  taxable  income
of  a taxpayer that is a partner in a qualified entity or is a qualified
entity that is located both within and without a New  York  state  inno-
vation  hot  spot, to the extent that the income or gain is attributable
to the operations of a qualified entity at or as part of  the  New  York
state  innovation  hot  spot as provided in section thirty-eight of this
chapter.
  (19) THE AMOUNT COMPUTED PURSUANT TO PARAGRAPH  (R)  OR  (S)  OF  THIS
SUBDIVISION, BUT NOT BOTH SUCH AMOUNTS.
  (b)  Entire  net  income  shall  be  determined without the exclusion,
deduction or credit of:
  (1) [the amount of any specific exemption or credit allowed in any law
of the United States imposing any tax on or measured by  the  income  of
corporations,] IN THE CASE OF A CORPORATION ORGANIZED UNDER THE LAW OF A
COUNTRY  OTHER THAN THE UNITED STATES, EXCEPT AS TREATED AS OTHER EXEMPT
INCOME UNDER SUBDIVISION SIX-A OF THIS SECTION,  (I)  ANY  PART  OF  ANY
INCOME  FROM  DIVIDENDS  OR INTEREST ON ANY KIND OF STOCK, SECURITIES OR
INDEBTEDNESS,  BUT  ONLY  IF  SUCH  INCOME  IS  TREATED  AS  EFFECTIVELY
CONNECTED  WITH  THE CONDUCT OF A TRADE OR BUSINESS IN THE UNITED STATES
PURSUANT TO SECTION 864 OF THE INTERNAL REVENUE CODE,  (II)  ANY  INCOME
EXEMPT  FROM  FEDERAL  TAXABLE INCOME UNDER ANY TREATY OBLIGATION OF THE
UNITED STATES, BUT ONLY IF SUCH INCOME WOULD BE TREATED  AS  EFFECTIVELY
CONNECTED  IN  ABSENCE OF SUCH EXEMPTION PROVIDED THAT SUCH TREATY OBLI-

S. 6359                            14                            A. 8559

GATION DOES NOT PRECLUDE THE TAXATION OF SUCH  INCOME  BY  A  STATE,  OR
(III) ANY INCOME WHICH WOULD BE TREATED AS EFFECTIVELY CONNECTED IF SUCH
INCOME WERE NOT EXCLUDED FROM GROSS INCOME PURSUANT TO SUBSECTION (A) OF
SECTION 103 OF THE INTERNAL REVENUE CODE;
  (2)  any  part of any income from dividends or interest on any kind of
stock, securities or indebtedness, [except as provided  in  clauses  (1)
and  (2)  of  paragraph (a) hereof] TREATED AS OTHER EXEMPT INCOME UNDER
SUBDIVISION SIX-A OF THIS SECTION,
  (3) taxes on or measured by profits or income paid or accrued  to  the
United States, any of its possessions or to any foreign country, includ-
ing  taxes  in  lieu  of  any of the foregoing taxes otherwise generally
imposed by any foreign country  or  by  any  possession  of  the  United
States,
  (3-a)  taxes  on  or  measured  by profits or income, or which include
profits or income as a measure, paid or accrued to any  other  state  of
the  United  States,  or  any  political  subdivision thereof, or to the
District of Columbia, including taxes expressly in lieu of  any  of  the
foregoing  taxes  otherwise  generally imposed by any other state of the
United States, or any political subdivision thereof, or the District  of
Columbia;
  (4)  taxes  imposed  under  this  article and article thirty-two AS IN
EFFECT ON DECEMBER THIRTY-FIRST, TWO THOUSAND FOURTEEN and sections  one
hundred  eighty-three,  one  hundred eighty-three-a, one hundred eighty-
four and one hundred eighty-four-a of this chapter,
  (4-a)(A) [the entire amount allowable as an exclusion or deduction for
stock transfer taxes imposed by article twelve of this chapter in deter-
mining the entire taxable income  which  the  taxpayer  is  required  to
report  to  the United States treasury department but only to the extent
that such taxes are incurred and paid  in  market  making  transactions,
(B)]  in those instances where a credit for the special additional mort-
gage recording tax credit is allowed under [paragraph (a)  of]  subdivi-
sion  [seventeen]  NINE of section two hundred [ten] TEN-B of this arti-
cle, the amount allowed as an exclusion or  deduction  for  the  special
additional  mortgage  recording  tax  imposed  by  subdivision  one-a of
section two hundred fifty-three  of  this  chapter  in  determining  the
entire  taxable  income  which the taxpayer is required to report to the
United States treasury department,  and  [(C)]  (B)  unless  the  credit
allowed  pursuant to subdivision [seventeen] NINE of section two hundred
[ten] TEN-B of this article is reflected in the computation of the  gain
or  loss so as to result in an increase in such gain or decrease of such
loss, for federal income tax purposes, from the sale or  other  disposi-
tion  of the property with respect to which the special additional mort-
gage recording tax imposed pursuant to subdivision one-a of section  two
hundred  fifty-three of this chapter was paid, the amount of the special
additional mortgage  recording  tax  imposed  by  subdivision  one-a  of
section two hundred fifty-three of this chapter which was paid and which
is  reflected  in  the computation of the basis of the property so as to
result in a decrease in such gain or increase in such loss  for  federal
income  tax  purposes from the sale or other disposition of the property
with respect to which such tax was paid.
  (6) [in the discretion of the tax commission, any amount  of  interest
directly  or  indirectly  and  any  other  amount directly or indirectly
attributable as a carrying charge or otherwise to subsidiary capital  or
to  income,  gains or losses from subsidiary capital] ANY AMOUNT ALLOWED
AS A DEDUCTION FOR THE TAXABLE YEAR UNDER SECTION 172  OF  THE  INTERNAL

S. 6359                            15                            A. 8559

REVENUE  CODE,  INCLUDING  CARRYOVERS  OF  DEDUCTIONS FROM PRIOR TAXABLE
YEARS.
  [(7)  in the case of a taxpayer who is separately or as a partner of a
partnership doing an insurance business as a  member  of  the  New  York
insurance  exchange described in section six thousand two hundred one of
the insurance law, such taxpayer's distributive or pro rata share of the
allocated entire  net  income  of  such  business  as  determined  under
sections fifteen hundred three and fifteen hundred four of this chapter,
provided  however,  in  the  event such allocated entire net income is a
loss, such taxpayer's distributive or pro rata share of such loss  shall
not  be  subtracted  from federal taxable income in computing entire net
income under this subdivision.]
  (8) for taxable years beginning after December thirty-first,  nineteen
hundred eighty-one, except with respect to property which is a qualified
mass  commuting vehicle described in subparagraph (D) of paragraph eight
of subsection (f) of section one hundred  sixty-eight  of  the  internal
revenue code (relating to qualified mass commuting vehicles) and proper-
ty  of  a taxpayer principally engaged in the conduct of aviation (other
than air freight forwarders acting as principal and  like  indirect  air
carriers)  which  is placed in service before taxable years beginning in
nineteen hundred eighty-nine, any amount which the taxpayer claimed as a
deduction in computing its federal taxable income solely as a result  of
an  election  made pursuant to the provisions of such paragraph eight as
it was in effect for agreements entered into  prior  to  January  first,
nineteen hundred eighty-four;
  (9)  for taxable years beginning after December thirty-first, nineteen
hundred eighty-one, except with respect to property which is a qualified
mass commuting vehicle described in subparagraph (D) of paragraph  eight
of  subsection  (f)  of  section one hundred sixty-eight of the internal
revenue code (relating to qualified mass commuting vehicles) and proper-
ty of a taxpayer principally engaged in the conduct of  aviation  (other
than  air  freight  forwarders acting as principal and like indirect air
carriers) which is placed in service before taxable years  beginning  in
nineteen  hundred  eighty-nine, any amount which the taxpayer would have
been required to include in  the  computation  of  its  federal  taxable
income had it not made the election permitted pursuant to such paragraph
eight  as  it was in effect for agreements entered into prior to January
first, nineteen hundred eighty-four;
  (10) in the case of property placed in service in taxable years begin-
ning before nineteen hundred ninety-four, for  taxable  years  beginning
after  December  thirty-first,  nineteen hundred eighty-one, except with
respect to property subject to the provisions  of  section  two  hundred
eighty-F   of  the  internal  revenue  code,  property  subject  to  the
provisions of section one hundred sixty-eight of  the  internal  revenue
code which is placed in service in this state in taxable years beginning
after  December  thirty-first, nineteen hundred eighty-four and property
of a taxpayer principally engaged in the conduct of aviation (other than
air freight forwarders acting as principal and like indirect air  carri-
ers)  which is placed in service before taxable years beginning in nine-
teen  hundred  [eight-nine]  EIGHTY-NINE,  the  amount  allowable  as  a
deduction determined under section one hundred sixty-eight of the inter-
nal revenue code;
  (11)  upon  the disposition of property to which paragraph (j) of this
subdivision applies, the amount, if any, by which the aggregate  of  the
amounts  described  in  such paragraph (j) attributable to such property

S. 6359                            16                            A. 8559

exceeds the aggregate of the amounts described in  subparagraph  ten  of
this paragraph attributable to such property.
  (15)  Real  property taxes paid on qualified agricultural property and
deducted in determining federal taxable income, to  the  extent  of  the
amount of the agricultural property tax credit allowed under subdivision
[twenty-two] ELEVEN of section two hundred [ten] TEN-B of this article.
  (16)  In  the  case  of  a taxpayer which is not an eligible farmer as
defined in paragraph (b) of subdivision [twenty-two] ELEVEN  of  section
two  hundred  [ten]  TEN-B  of this article, the amount of any deduction
claimed pursuant to section  179  of  the  internal  revenue  code  with
respect  to  a sport utility vehicle which is not a passenger automobile
as defined in paragraph 5 of subsection  (d)  of  section  280F  of  the
internal revenue code.
  (17)  for  taxable  years  beginning  after December thirty-first, two
thousand two, in the case of qualified property described  in  paragraph
two  of  subsection k of section 168 of the internal revenue code, other
than qualified resurgence zone property described in  paragraph  (q)  of
this subdivision, and other than qualified New York Liberty Zone proper-
ty  described  in  paragraph two of subsection b of section 1400L of the
internal revenue code (without regard to clause (i) of subparagraph  (C)
of  such paragraph), which was placed in service on or after June first,
two thousand three, the amount allowable as a  deduction  under  section
167 of the internal revenue code.
  (18) Premiums paid for environmental remediation insurance, as defined
in  section  twenty-three  of  this chapter, and deducted in determining
federal taxable income, to the extent of the amount of the environmental
remediation insurance credit allowed under such section twenty-three and
subdivision [thirty-five] NINETEEN of section two hundred [ten] TEN-B of
this article.
  (19) The amount of any  deduction  allowed  pursuant  to  section  one
hundred ninety-nine of the internal revenue code.
  (20) The amount of any federal deduction for taxes imposed under arti-
cle twenty-three of this chapter.
  [(c)  Entire  net  income  shall include income within and without the
United States;]
  (c-1)(1) Notwithstanding any other provision of this article,  in  the
case  of a taxpayer which is a foreign air carrier holding a foreign air
carrier permit issued by the United States department of  transportation
pursuant  to  section  four  hundred  two of the federal aviation act of
nineteen hundred fifty-eight, as amended, and which is  qualified  under
subparagraph two of this paragraph, entire net income shall not include,
and  shall  be  computed  without  the deduction of, amounts directly or
indirectly attributable to, (i) any income  derived  from  the  interna-
tional  operation  of  aircraft  as  described  in  and  subject  to the
provisions of section eight hundred eighty-three of the internal revenue
code, (ii) income without the United States which is  derived  from  the
operation  of aircraft, and (iii) income without the United States which
is of a type described in  subdivision  (a)  of  section  eight  hundred
eighty-one  of  the internal revenue code except that it is derived from
sources without the United  States.  Entire  net  income  shall  include
income  described in clauses (i), (ii) and (iii) of this subparagraph in
the case of taxpayers not described in the previous sentence.
  (2) A taxpayer is qualified under this subparagraph  if  air  carriers
organized  in  the United States and operating in the foreign country or
countries in which the taxpayer has its major base of operations and  in
which  it  is  organized,  resident or headquartered (if not in the same

S. 6359                            17                            A. 8559

country as its major base of operations) are not subject to  any  income
tax  or  other tax based on or measured by income or receipts imposed by
such foreign country or countries or any political subdivision  thereof,
or  if  so  subject to such tax, are provided an exemption from such tax
equivalent to that provided for herein.
  (c-2) Adjustments by qualified public utilities. (1) In the case of  a
taxpayer which is a qualified public utility, entire net income shall be
computed with the adjustments set forth in this paragraph.
  (2)  Definitions.  (A)  Qualified  public utility. The term "qualified
public utility" means a taxpayer which: (i)  on  December  thirty-first,
nineteen  hundred ninety-nine, was subject to the ratemaking supervision
of the state department of public service, and (ii) for the year  ending
on  December  thirty-first, nineteen hundred ninety-nine, was subject to
tax under former section one hundred eighty-six of this chapter.
  (B) Transition property. The term "transition property" means property
placed in service by the taxpayer before January  first,  two  thousand,
for  which a depreciation deduction is allowed under section one hundred
sixty-seven of the internal revenue code.
  (3) Federal depreciation disallowed. With respect to transition  prop-
erty,  the  deduction  for  federal income tax purposes for depreciation
shall not be allowed.
  (4) New York depreciation. With  respect  to  transition  property,  a
deduction  shall  be  allowed  for the depreciation expense shown on the
books and records of the taxpayer for the taxable year and determined in
accordance with generally accepted accounting principles.
  (5) Regulatory assets. A deduction shall be allowed for amounts recog-
nized as expense on the books and records of the taxpayer for the  taxa-
ble  year,  which  amounts were recognized as expense for federal income
tax purposes in a taxable year ending  on  or  before  December  thirty-
first,  nineteen  hundred ninety-nine, where: (A) such amounts represent
expenditures which, when made, were charged to a deferred debit  account
or  similar  asset account on the books and records of the taxpayer, and
where (B) the recognition of expense on the books  and  records  of  the
taxpayer  is  matched by revenue stemming from a procedure or adjustment
allowing the recovery of such expenditures, and where (C)  such  revenue
is recognized for federal income tax purposes in the taxable year.
  (6)  Basis for gain or loss. (A) Recognition transactions. (i) General
rule - book basis. Except as provided in subclause (ii) of this  clause,
where  transition property is sold or otherwise disposed of in the taxa-
ble year in a transaction of the type requiring recognition of  gain  or
loss  for  federal  income  tax  purposes, the basis for determining the
amount of such gain or loss under this article shall be the cost of  the
property less the accumulated depreciation on the property determined on
the  books  and  records  of  the  taxpayer in accordance with generally
accepted accounting principles.
  (ii) Qualified gain - New York basis.  Where  a  sale  or  disposition
described in subclause (i) of this clause results in recognition of gain
for  federal  income tax purposes, and where either (I) such recognition
occurs in a taxable year ending after nineteen hundred  ninety-nine  and
before  two  thousand ten, or (II) such recognition is with respect to a
nuclear electric generating facility,  the  basis  for  determining  the
amount of such gain under this article shall be the cost of the property
less  the aggregate of the New York depreciation deductions on the prop-
erty determined under subparagraph four of this paragraph.
  (iii) No conversion of gain to loss.  In  the  event  that  the  basis
determined  under subclause (ii) of this clause results in determination

S. 6359                            18                            A. 8559

of a loss on the sale or disposition of the property, no  gain  or  loss
shall  be  recognized  under  this  article with respect to such sale or
disposition.
  (B)  Nonrecognition transactions. (i) Carryover basis. (I) where tran-
sition property is disposed of ("original disposition") in a transaction
of a type requiring deferral of recognition of gain or loss for  federal
income tax purposes, and where (II) there is a subsequent recognition of
gain  or loss for federal income tax purposes ("clause B gain or loss"),
the amount of which is determined by reference, in whole or in part,  to
the  basis  of  such transition property ("underlying transition proper-
ty"), then (III) the amount of such clause B gain  or  loss  under  this
article shall be adjusted as provided in subclause (ii) or (iii) of this
clause.
  (ii)  General  rule  -  book  basis  adjustment. Except as provided in
subclause (iii) of this clause, the amount of clause  B  gain  shall  be
reduced,  or  the  amount  of  clause B loss increased, by the amount by
which the book basis of the underlying transition property on  the  date
of  original  disposition  (determined using the provisions of subclause
(i) of clause (A) of this subparagraph) exceeds the federal  income  tax
basis of such property on such date.
  (iii)  Qualified gain - New York basis adjustment. Where clause B gain
either (I) occurs in a taxable year ending after nineteen hundred  nine-
ty-nine and before two thousand ten, or (II) is with respect to a nucle-
ar  electric  generating  facility,  the  amount of such gain under this
article shall be reduced, but not below zero, by the amount by which the
New York basis of the underlying transition  property  on  the  date  of
original  disposition (determined using the provisions of subclause (ii)
of clause (A) of this subparagraph) exceeds the federal income tax basis
of such property on such date.
  (iv) Application to replacement  property  and  transferee  taxpayers.
This  clause  shall apply whether the clause B gain or loss: (I) is with
respect to either transition property or depreciable property the  basis
of  which  is determined by reference to transition property, or (II) is
recognized by either a qualified public utility or by a  taxpayer  which
is  a  transferee of transition property (whether or not such transferee
is a qualified public utility, notwithstanding subparagraph one of  this
paragraph).
  (c-3)  Depreciation adjustments by qualified power producers and pipe-
line companies. (1) In the case of  a  qualified  taxpayer,  entire  net
income  shall be computed with the depreciation adjustments set forth in
this paragraph.
  (2) Definitions. (A) Qualified taxpayer. The term "qualified taxpayer"
means a qualified power producer or a qualified pipeline.
  (B) Qualified power producer.  The  term  "qualified  power  producer"
means  a  taxpayer which: (i) on December thirty-first, nineteen hundred
ninety-nine, was not subject to the ratemaking supervision of the  state
department  of  public service, and (ii) for the year ending on December
thirty-first, nineteen hundred ninety-nine, was  subject  to  tax  under
former  section one hundred eighty-six of this chapter on account of its
being principally engaged in the business of supplying electricity.
  (C) Qualified pipeline. The term "qualified pipeline" means a taxpayer
which: (i) on December thirty-first, nineteen hundred  ninety-nine,  was
subject to the ratemaking supervision of either the federal energy regu-
latory  commission  or  the state department of public service, and (ii)
for the year ending on December thirty-first, nineteen  hundred  ninety-
nine, was subject to tax under sections one hundred eighty-three and one

S. 6359                            19                            A. 8559

hundred  eighty-four of this chapter on account of its being principally
engaged in the business of pipeline transmission.
  (D) Transition property. The term "transition property" means property
placed  in  service  by  a  qualified taxpayer before January first, two
thousand, for which a depreciation deduction is  allowed  under  section
one hundred sixty-seven of the internal revenue code.
  (3)  Federal depreciation disallowed. With respect to transition prop-
erty, the deduction for federal income  tax  purposes  for  depreciation
shall not be allowed.
  (4)  New  York  depreciation.  With  respect to transition property, a
deduction shall be allowed for  the  depreciation  expense  computed  as
provided  in this subparagraph. (A) All transition property shown on the
books and records of the taxpayer on January first, two  thousand  shall
be  treated  as  a  single asset placed in service on such date. The New
York basis for purposes of computing the depreciation deduction on  such
single  asset  shall  be  the net book value of such transition property
determined on the first day of the federal taxable year  ending  in  two
thousand  (or  on  the  date  any such property is placed in service, if
later) adjusted as provided in clause (B) of this subparagraph.
  (B) If transition property is sold or otherwise disposed of,  the  New
York basis of the single asset shall be reduced on the date of such sale
or  disposition  by the amount of the adjusted federal tax basis of such
property on such date.
  (C) The New York depreciation deduction allowed for any  taxable  year
with  respect to such single asset shall be computed using the straight-
line method, a twenty-year life, and a salvage value of zero.
  (D) For purposes of this subparagraph, the term "net book value" means
cost reduced by accumulated depreciation shown on the books and  records
of the taxpayer and determined, in the case of a qualified power produc-
er,  in accordance with generally accepted accounting principles; and in
the case of a qualified pipeline,  in  accordance  with  the  taxpayer's
regulatory  reports  filed with the federal energy regulatory commission
or state department of public service.
  (d) The [tax commission] COMMISSIONER may, whenever necessary in order
properly to reflect the entire net income of any taxpayer, determine the
year or period in which  any  item  of  income  or  deduction  shall  be
included,  without  regard  to  the method of accounting employed by the
taxpayer[;].
  (e) The entire net income of any bridge commission created by  act  of
congress  to  construct  a bridge across an international boundary means
its gross income less the expense of maintaining and operating its prop-
erties, the annual interest upon its bonds and  other  obligations,  and
the  annual  charge  for  the retirement of such bonds or obligations at
maturity[;].
  [(f) A net operating loss deduction shall be allowed  which  shall  be
presumably  the  same  as the net operating loss deduction allowed under
section one hundred seventy-two of the internal revenue code,  or  which
would  have  been allowed if the taxpayer had not made an election under
subchapter s of chapter one of the internal revenue code, except that in
every instance where such deduction is allowed under this article:
  (1) any net operating loss  included  in  determining  such  deduction
shall  be  adjusted to reflect the inclusions and exclusions from entire
net income required by paragraphs (a), (b) and (g) hereof,
  (2) such deduction shall not include any net operating loss  sustained
during  any  taxable  year  beginning  prior  to January first, nineteen

S. 6359                            20                            A. 8559

hundred sixty-one, or during any taxable year in which the taxpayer  was
not subject to the tax imposed by this article,
  (3) such deduction shall not exceed the deduction for the taxable year
allowed  under  section  one hundred seventy-two of the internal revenue
code, or the deduction for  the  taxable  year  which  would  have  been
allowed  if  the taxpayer had not made an election under subchapter s of
chapter one of the internal revenue code,
  (4) in the case of a New York S corporation, such deduction shall  not
include  any  net  operating  loss sustained during a New York C year or
during a New York S year beginning prior to nineteen hundred ninety, and
in the case of a New  York  C  corporation,  such  deduction  shall  not
include  any  net  operating  loss  sustained  during a New York S year,
provided, however, a New York S year shall be treated as a taxable  year
for  purposes  of determining the number of taxable years to which a net
operating loss may be carried back or carried forward, and
  (5) the net operating loss deduction allowed under section one hundred
seventy-two of the internal revenue code  shall  for  purposes  of  this
paragraph  be  determined  as  if  the  taxpayer  had elected under such
section to relinquish the entire carryback period with  respect  to  net
operating  losses, except with respect to the first ten thousand dollars
of each of such losses, sustained during taxable years ending after June
thirtieth, nineteen hundred eighty-nine.
  (g) For taxable years commencing  prior  to  January  first,  nineteen
hundred eighty-seven, at the election of the taxpayer, a deduction shall
be allowed for expenditures paid or incurred during the taxable year for
the  construction,  reconstruction,  erection  or  improvement of either
industrial waste treatment facilities or air pollution  control  facili-
ties,  or,  with  respect to taxable years beginning on or after January
first, nineteen hundred seventy-seven and before January first, nineteen
hundred eighty-one, industrial waste treatment controlled process facil-
ities or air pollution controlled process facilities.
  (1) (A) (1) The term "industrial  waste  treatment  facilities"  shall
mean  facilities  for  the treatment, neutralization or stabilization of
industrial waste and other wastes (as the terms "industrial  waste"  and
"other  wastes"  are  defined  in  section  17-0105 of the environmental
conservation law) from a point immediately preceding the point  of  such
treatment,  neutralization  or  stabilization  to the point of disposal,
including the necessary pumping and transmitting facilities.
  (2) The term "industrial waste treatment controlled process  facility"
shall mean such portion of the cost of an industrial production facility
designed  for  the  purpose  of  obviating the need for industrial waste
treatment facilities as defined in item one  of  this  clause  as  shall
exceed the cost of an industrial production facility of equal production
capacity  which  if constructed would require industrial waste treatment
facilities to meet emission standards in compliance with the  provisions
of the environmental conservation law and the codes, rules, regulations,
permits  or orders issued pursuant thereto but only to the extent of the
cost of such industrial waste treatment facilities.
  (B) (1) The term "air pollution control facilities" shall mean facili-
ties which remove, reduce, or render less noxious air contaminants emit-
ted from an air contamination source (as the terms "air contaminant" and
"air contamination source" are defined in section 19-0107 of  the  envi-
ronmental conservation law) from a point immediately preceding the point
of  such  removal,  reduction  or rendering to the point of discharge of
air, meeting emission standards as  established  by  the  department  of
environmental  conservation, but excluding such facilities installed for

S. 6359                            21                            A. 8559

the primary purpose of salvaging materials which are usable in the manu-
facturing process or are marketable and excluding those facilities which
rely for their efficacy on dilution, dispersion or assimilation  of  air
contaminants  in the ambient air after emission. Such term shall further
include flue gas desulfurization equipment and attendant sludge disposal
facilities, fluidized bed boilers, precombustion coal  cleaning  facili-
ties  or  other  facilities that conform with this subdivision and which
comply with the provisions of the state acid deposition control act  set
forth  in  title nine of article nineteen of the environmental conserva-
tion law.
  (2) The term "air pollution controlled process  facility"  shall  mean
such  portion  of the cost of an industrial production facility designed
for the purpose of obviating the need for air pollution control  facili-
ties  as  defined in item one of this clause as shall exceed the cost of
an industrial production facility of equal productive capacity which  if
constructed  would  require  air  pollution  control facilities to inert
emission standards as established pursuant to  title  three  of  article
nineteen of the environmental conservation law but only to the extent of
the cost of such air pollution control facilities.
  (2) However, such deduction shall be allowed only
  (A)  with  respect to tangible property which is depreciable, pursuant
to section one hundred sixty-seven of the internal revenue code,  having
a  situs in this state and used in the taxpayer's trade or business, the
construction, reconstruction, erection or improvement of which,  in  the
case  of industrial waste treatment facilities, is initiated on or after
January first, nineteen hundred sixty-five or which, in the case of  air
pollution  control  facilities,  is initiated on or after January first,
nineteen hundred sixty-six, or which in the  case  of  industrial  waste
treatment  controlled  process  facilities  or  air pollution controlled
process facilities is initiated on and  after  January  first,  nineteen
hundred seventy-seven, and
  (B) on condition that such facilities have been certified by the state
commissioner  of  environmental conservation or his designated represen-
tative, pursuant to section 19-0309 of  the  environmental  conservation
law,  as  complying  with  applicable  provisions  of  the environmental
conservation law, the public health law, the  state  sanitary  code  and
codes,  rules,  regulations,  permits or orders issued pursuant thereto,
and
  (C) on condition that entire net income for the taxable year  and  all
succeeding  taxable  years  be  computed without any deductions for such
expenditures or for depreciation or amortization of  the  same  property
other  than  the deductions allowed by this paragraph (g), except to the
extent that the basis of the property may  be  attributable  to  factors
other than such expenditures, or in case a deduction is allowable pursu-
ant to this paragraph for only a part of such expenditures, on condition
that  any  deduction  allowed  for  federal income tax purposes for such
expenditures or for depreciation or amortization of the same property be
proportionately reduced in computing entire net income for  the  taxable
year and all succeeding taxable years, and
  (D)  where  the  election provided for in paragraph (d) of subdivision
three of section two hundred ten of this chapter has not been  exercised
in respect to the same property.
  (3)  (A)  If  expenditures in respect to an industrial waste treatment
facility, an air pollution control facility, an industrial waste  treat-
ment  controlled process facility or an air pollution controlled process
facility have been deducted as provided herein and if within  ten  years

S. 6359                            22                            A. 8559

from  the  end  of  the taxable year in which such deduction was allowed
such property or any part thereof is used for  the  primary  purpose  of
salvaging materials which are usable in the manufacturing process or are
marketable,  the  taxpayer shall report such change of use in its report
for the first taxable year during which it occurs, and the  tax  commis-
sion  may  recompute  the  tax  for  the  year  or  years for which such
deduction was allowed and any  carryback  or  carryover  year,  and  may
assess  any  additional tax resulting from such recomputation within the
time fixed by paragraph nine of subsection (c) of  section  ten  hundred
eighty-three of this chapter.
  (B) If a deduction is allowed as herein provided for expenditures paid
or  incurred during any taxable year on the basis of a temporary certif-
icate of compliance issued pursuant to  the  environmental  conservation
law  and  if  the  taxpayer  fails  to obtain a permanent certificate of
compliance upon completion of the facilities with respect to which  such
temporary certificate was issued, the taxpayer shall report such failure
in  its  report  for  the  taxable year during which such facilities are
completed, and the tax commission may recompute the tax for the year  or
years  for  which such deduction was allowed and any carryback or carry-
over year, and may assess any additional  tax  resulting  from  in  such
recomputation  within the time fixed by paragraph nine of subsection (c)
of section ten hundred eighty-three.
  (C) If a deduction is allowed as herein provided for expenditures paid
or incurred during any taxable year  in  respect  to  an  air  pollution
control  facility  on  the  basis  of a certificate of compliance issued
pursuant to the environmental conservation law and  the  certificate  is
revoked pursuant to subdivision three of section 19-0309 of the environ-
mental  conservation  law,  the tax commission may recompute the tax for
the year or years for which the facility is not or was not in compliance
with the applicable provisions of the  environmental  conservation  law,
the  state sanitary code or codes, rules, regulations, permits or orders
promulgated pursuant thereto, and for which a deduction was allowed,  as
well  as for any carryback or carryover year to which such deduction was
carried, and may assess any additional tax resulting from such  recompu-
tation  within  the  time  fixed  by paragraph nine of subsection (c) of
section ten hundred eighty-three.
  (4) In any taxable year when property is sold  or  otherwise  disposed
of,  with respect to which a deduction has been allowed pursuant to this
paragraph, such deduction shall be  disregarded  in  computing  gain  or
loss,  and  the  gain  or  loss on the sale or other disposition of such
property shall be the gain or loss  entering  into  the  computation  of
entire  taxable  income  which the taxpayer is required to report to the
United States treasury department for such taxable year.]
  (h) If the period covered by a report under this article is other than
the period covered by the report to the United States  treasury  depart-
ment,
  (1)  except  as provided in subparagraph two hereof, entire net income
shall be determined by multiplying the taxable income reported  to  such
department  (as  adjusted pursuant to the provisions of this article) by
the number of calendar months or major  parts  thereof  covered  by  the
report  under this article and dividing by the number of calendar months
or major parts thereof covered by the report to such department.  If  it
shall  appear that such method of determining entire net income does not
properly reflect the taxpayer's income during the period covered by  the
report  under  this  article, the [tax commission] COMMISSIONER shall be
authorized in its discretion to determine such entire net income  solely

S. 6359                            23                            A. 8559

on  the  basis of the taxpayer's income during the period covered by its
report under this article[;].
  (2)  [in]  IN  the  case  of  a  New York S termination year, an equal
portion of entire net income shall be assigned to each day of such year.
The portion of such entire net income thereby assigned to  the  S  short
year  and  the  C short year shall be included in the respective reports
for the S short year and the C short year under this  article.  However,
where paragraph three of subsection (s) of section six hundred twelve of
this  chapter applies, the portion of such entire net income assigned to
the S short year and the C short year shall be determined  under  normal
tax accounting rules.
  (i)  With respect to a DISC which during any taxable year or reporting
year (1) received more than five percent of its  gross  sales  from  the
sale  of  inventory or other property which it purchased from its stock-
holders, (2) received more than five percent of its gross  rentals  from
the  rental of property which it purchased or rented from its stockhold-
ers or (3) received more than five percent of its total  receipts  other
than  sales  and rentals from its stockholders, the following provisions
shall apply.
  (A) For any taxable year in which sub-paragraph (B) of this  paragraph
is  in  effect  and  not rendered invalid, a DISC meeting the above test
shall be exempt from all taxes imposed by this article.
  (B) Supplemental to the provisions of subdivision five of section  two
hundred  eleven  of this article, any taxpayer required to compute a tax
under this article, which during the taxable year being reported  was  a
stockholder  in  any DISC meeting the test prescribed in this paragraph,
shall for any taxable year ending after December thirty-first,  nineteen
hundred  seventy-one  adjust each item of its receipts, expenses, assets
and liabilities, as otherwise computed under  this  article,  by  adding
thereto  its  attributable share of each such DISC's receipts, expenses,
assets and liabilities as reportable by each such  DISC  to  the  United
States Treasury Department for its annual reporting period ending during
the  current  taxable year of such taxpayer; provided, however, (1) that
all transactions between the taxpayer and each such DISC shall be elimi-
nated from  the  taxpayer's  adjusted  receipts,  expenses,  assets  and
liabilities;  (2)  that  the  taxpayer's  entire net income as otherwise
computed under this section, shall be reduced by subtracting the  amount
of  the  deemed  distribution  of current income, if any, from each such
DISC already included in the entire  net  income  of  such  taxpayer  by
virtue  of  having  been  included in its entire taxable income for that
taxable year as reported to the United States Treasury  Department;  and
(3)  that  in  the  event this paragraph should be rendered invalid, all
DISC's and their stockholders taxable hereunder shall be  taxed  instead
under the remaining portions of this article.
  (j)  in the case of property placed in service in taxable years begin-
ning before nineteen hundred ninety-four, for  taxable  years  beginning
after  December  thirty-first,  nineteen hundred eighty-one, except with
respect to property subject to the provisions  of  section  two  hundred
eighty-F  of  the  internal  revenue  code  and  property subject to the
provisions of section one hundred sixty-eight of  the  internal  revenue
code which is placed in service in this state in taxable years beginning
after  December thirty-first, nineteen hundred eighty-four, and provided
a deduction has not been excluded from entire  net  income  pursuant  to
subparagraph  eight  of  paragraph  (b)  of this subdivision, a taxpayer
shall be allowed with respect  to  property  which  is  subject  to  the
provisions  of  section  one hundred sixty-eight of the internal revenue

S. 6359                            24                            A. 8559

code the depreciation deduction  allowable  under  section  one  hundred
sixty-seven  of  the  internal  revenue  code as such section would have
applied to property placed in service on December thirty-first, nineteen
hundred eighty. This paragraph shall not apply to property of a taxpayer
principally  engaged  in the conduct of aviation (other than air freight
forwarders acting as principal and like indirect air carriers) which  is
placed  in  service  before  taxable years beginning in nineteen hundred
eighty-nine.
  (k) QSSS. (1) New York S corporation. In the case  of  a  New  York  S
corporation  which  is the parent of a qualified subchapter S subsidiary
(QSSS) with respect to a taxable year:
  (A) where the QSSS is not an excluded corporation,
  (i) in determining the entire net income of such  parent  corporation,
all  assets,  liabilities,  income  and  deductions of the QSSS shall be
treated as assets, liabilities, income  and  deductions  of  the  parent
corporation, and
  (ii)  the QSSS shall be exempt from all taxes imposed by this article,
and
  (B) where the QSSS is an excluded corporation, the entire  net  income
of  the  parent  corporation  shall be determined as if the federal QSSS
election had not been made.
  (2) New York C corporation. In the case of a New  York  C  corporation
which is the parent of a QSSS with respect to a taxable year:
  (A) where the QSSS is a taxpayer,
  (i)  in  determining the entire net income of such parent corporation,
all assets, liabilities, income and deductions  of  the  QSSS  shall  be
treated  as  assets,  liabilities,  income  and deductions of the parent
corporation, and
  (ii) the QSSS shall be exempt from all taxes imposed by this  article,
and
  (B) where the QSSS is not a taxpayer,
  (i) if the QSSS is not an excluded corporation, the parent corporation
may  make  a QSSS inclusion election to include all assets, liabilities,
income and deductions of the QSSS as  assets,  liabilities,  income  and
deductions of the parent corporation, and
  (ii) in the absence of such election, or where the QSSS is an excluded
corporation,  the  entire  net income of the parent corporation shall be
determined as if the federal QSSS election had not been made.
  (3) Non-New York S corporation not excluded.  In  the  case  of  an  S
corporation which is not a taxpayer and not an excluded corporation, and
which  is  the parent of a QSSS which is a taxpayer, the shareholders of
the parent corporation shall be entitled to make the New York S election
under subsection (a) of section six hundred sixty of this chapter.
  (A) For any taxable year for which such election  is  in  effect,  the
parent  corporation  shall be subject to tax under this article as a New
York S corporation, and the provisions of clause (A) of subparagraph one
of this paragraph shall apply.
  (B) For any taxable year for which such election is not in effect, the
QSSS shall be a New York C corporation, and the entire net income of the
QSSS shall be determined as if the federal QSSS election  had  not  been
made. For purposes of such determination, the taxable year of the parent
corporation  shall  constitute  the taxable year of the QSSS, excluding,
however, any portion of such year during which the QSSS is not a taxpay-
er.
  (4) S corporation excluded. In the case of an S corporation  which  is
an  excluded  corporation  and  which is the parent of a QSSS which is a

S. 6359                            25                            A. 8559

taxpayer, the QSSS shall be a New York C corporation and the  provisions
of clause (B) of subparagraph three of this paragraph shall apply.
  (5)  Excluded  corporation.  The  term  "excluded corporation" means a
corporation subject to  tax  under  sections  one  hundred  eighty-three
through  one  hundred  eighty-six, inclusive, or article [thirty-two or]
thirty-three of this chapter, or a foreign corporation  not  taxable  by
this  state which, if it were taxable, would be subject to tax under any
of such sections or [articles] ARTICLE.
  (6) Taxpayer. For purposes of  this  paragraph,  the  term  "taxpayer"
means  a  parent  corporation or QSSS subject to tax under this article,
determined without regard to the provisions of this paragraph.
  (7) QSSS inclusion election.  The  election  under  subclause  (i)  of
clause  (B) of subparagraph two of this paragraph shall be effective for
the taxable year for which made and for all succeeding taxable years  of
the corporation until such election is terminated. An election or termi-
nation shall be made on such form and in such manner as the commissioner
may prescribe by regulation or instruction.
  (l)  Emerging  technology investment deferral. In the case of any sale
of a qualified emerging technologies investment held for more than thir-
ty-six months and with respect to which the taxpayer elects the applica-
tion of this paragraph, gain from such sale shall be recognized only  to
the extent that the amount realized on such sale exceeds the cost of any
qualified  emerging  technologies  investment  purchased by the taxpayer
during the three hundred sixty-five-day period beginning on the date  of
such  sale,  reduced  by  any portion of such cost previously taken into
account under this paragraph. For purposes of this paragraph the follow-
ing shall apply:
  (1) A qualified investment is stock of a corporation or  an  interest,
other  than as a creditor, in a partnership or limited liability company
that was acquired by the taxpayer as provided in Internal Revenue Code S
1202(c)(1)(B), except that the reference to the  term  "stock"  in  such
section  shall be read as "investment," or by the taxpayer from a person
who had acquired such stock or interest in such a manner.
  (2) A qualified emerging technology investment is a qualified  invest-
ment, that was held by the taxpayer for at least thirty-six months, in a
company  defined  in paragraph (c) of subdivision one of section thirty-
one hundred two-e of the public authorities law or an  investment  in  a
partnership  or limited liability company that is taxed as a partnership
to the extent that such partnership or limited liability company invests
in qualified emerging technology companies.
  (3) For purposes of determining whether  the  nonrecognition  of  gain
under  this  subsection  applies  to  a  qualified emerging technologies
investment that is sold, the taxpayer's holding period for such  invest-
ment   and  the  qualified  emerging  technologies  investment  that  is
purchased shall be determined without regard to Internal Revenue Code  S
1223.
  (m)  Amounts deferred. The amount deferred under paragraph (l) of this
subdivision shall be added to entire net income when the reinvestment in
the New York qualified emerging technology  company  which  qualified  a
taxpayer for such deferral is sold.
  [(n) Qualified gas transportation contracts.
  (1) Any tax paid under this article allocable to receipts attributable
to  a  "qualified  gas  transportation contract" shall be deemed to have
been paid under article nine of this chapter for all purposes of law for
taxable years commencing  on  or  after  January  first,  two  thousand,

S. 6359                            26                            A. 8559

computed as hereinafter provided, if all of the following conditions are
met:
  (i)  For  periods  ending  prior  to  January first, two thousand, the
taxpayer paid the franchise tax due under section  one  hundred  eighty-
four of this chapter.
  (ii)  For  the  taxable  year,  all  of the receipts from the pipeline
transportation of natural gas attributable to the taxpayer and  included
in  the  taxpayer's entire net income (without regard to this paragraph)
are solely from the transportation of natural gas for wholesale  custom-
ers and commercial retail customers.
  (iii)  The  taxpayer's  franchise tax liability under this article for
the taxable year (computed without regard to this paragraph)  is  deter-
mined  under paragraph (a) of subdivision one of section two hundred ten
of this article, and such tax liability (without regard  to  this  para-
graph)  is  greater  than the liability the taxpayer would have incurred
under sections one hundred eighty-three and one hundred  eighty-four  of
this  chapter  (as such sections existed on December thirty-first, nine-
teen hundred ninety-nine) based on the same taxable period.
  (iv) The taxpayer is  a  party  to  a  "qualified  gas  transportation
contract," as defined herein.
  (2)  The provisions of this paragraph shall apply only for the taxable
years during which such qualified gas transportation contract is in full
force and effect, and shall apply only to the receipts of  the  taxpayer
less  any  expenses of the taxpayer (but not less than zero), during the
taxable year, to the extent included in entire  net  income,  which  are
attributable   to  any  such  qualified  gas  transportation  contracts.
Provided, further, in any event, the  characterization  hereunder  shall
expire  and be of no further force and effect for taxable years commenc-
ing on or after January first, two thousand fifteen.
  (3) The term "qualified gas  transportation  contract"  shall  mean  a
service  agreement for the transportation of natural gas for an end-user
which is a qualified cogeneration facility with a rated capacity of  one
thousand  megawatts  or  more, which (i) was entered into before January
first, two thousand, and was in full force and effect and binding on the
parties thereto as of such date, (ii) as originally executed, was for  a
term of at least twenty years, and (iii) the terms of which prohibit the
pass-through  to  such  customer of the franchise tax imposed under this
article, while allowing the recovery of the gross earnings  tax  imposed
under  section one hundred eighty-four of this chapter. A contract shall
not qualify as a qualified gas transportation contract if there is:  (i)
any  renewal  or  extension of an otherwise qualified gas transportation
contract occurring on or after January first, two thousand, or (ii)  any
material amendment to, or supplementation of, an otherwise qualified gas
transportation  contract on or after such date. Such renewal, extension,
or material amendment or supplementation shall have the same  force  and
effect  of terminating the characterization hereunder as if the qualify-
ing contract had expired by its own terms.
  (o)] (N-1) For taxable years beginning  after  December  thirty-first,
two  thousand  two, in the case of qualified property described in para-
graph two of subsection k of section 168 of the internal  revenue  code,
other than qualified resurgence zone property described in paragraph (q)
of  this  subdivision,  and  other  than qualified New York Liberty Zone
property described in paragraph two of subsection b of section 1400L  of
the  internal revenue code (without regard to clause (i) of subparagraph
(C) of such paragraph), which was placed in service  on  or  after  June
first,  two  thousand three, a taxpayer shall be allowed with respect to

S. 6359                            27                            A. 8559

such property the depreciation deduction allowable under section 167  of
the  internal  revenue  code  as such section would have applied to such
property had it been acquired by the taxpayer on  September  tenth,  two
thousand one.
  (o)  Related  members  expense  add back. (1) Definitions. (A) Related
member. "Related member" means a related person as defined  in  subpara-
graph  (c)  of paragraph three of subsection (b) of section four hundred
sixty-five of the internal revenue code,  except  that  "fifty  percent"
shall be substituted for "ten percent".
  (B)  Effective  rate  of tax. "Effective rate of tax" means, as to any
state or U.S. possession, the maximum statutory rate of tax  imposed  by
the  state or possession on or measured by a related member's net income
multiplied by the apportionment percentage, if any,  applicable  to  the
related member under the laws of said jurisdiction. For purposes of this
definition, the effective rate of tax as to any state or U.S. possession
is  zero  where  the  related  member's net income tax liability in said
jurisdiction is reported on a combined or consolidated return  including
both the taxpayer and the related member where the reported transactions
between  the  taxpayer  and the related member are eliminated or offset.
Also, for purposes of this definition, when computing the effective rate
of tax for a jurisdiction in which a  related  member's  net  income  is
eliminated or offset by a credit or similar adjustment that is dependent
upon  the related member either maintaining or managing intangible prop-
erty or collecting interest income in  that  jurisdiction,  the  maximum
statutory rate of tax imposed by said jurisdiction shall be decreased to
reflect  the statutory rate of tax that applies to the related member as
effectively reduced by such credit or similar adjustment.
  (C) Royalty payments. Royalty payments are payments directly connected
to the acquisition, use, maintenance  or  management,  ownership,  sale,
exchange,  or any other disposition of licenses, trademarks, copyrights,
trade names, trade dress, service  marks,  mask  works,  trade  secrets,
patents  and  any other similar types of intangible assets as determined
by  the  commissioner,  and  include  amounts  allowable   as   interest
deductions under section one hundred sixty-three of the internal revenue
code  to the extent such amounts are directly or indirectly for, related
to or in connection with the acquisition, use,  maintenance  or  manage-
ment,  ownership,  sale,  exchange  or  disposition  of  such intangible
assets.
  (D) Valid Business Purpose. A valid business purpose is  one  or  more
business  purposes,  other  than the avoidance or reduction of taxation,
which alone or in combination constitute the primary motivation for some
business activity or transaction, which activity or transaction  changes
in  a  meaningful  way, apart from tax effects, the economic position of
the taxpayer. The economic position of the taxpayer includes an increase
in the market share of the taxpayer, or the entry by the  taxpayer  into
new business markets.
  (2) Royalty expense add backs. (A) Except where a taxpayer is included
in  a combined report with a related member pursuant to subdivision four
of section two hundred eleven  of  this  article,  for  the  purpose  of
computing entire net income or other applicable taxable basis, a taxpay-
er  must add back royalty payments directly or indirectly paid, accrued,
or incurred in connection with one or more  direct  or  indirect  trans-
actions  with one or more related members during the taxable year to the
extent deductible in calculating federal taxable income.
  (B) Exceptions. (i) The adjustment required in  this  paragraph  shall
not apply to the portion of the royalty payment that the taxpayer estab-

S. 6359                            28                            A. 8559

lishes,  by  clear  and  convincing evidence of the type and in the form
specified by the commissioner, meets all of the following  requirements:
(I) the related member was subject to tax in this state or another state
or  possession of the United States or a foreign nation or some combina-
tion thereof on a tax base  that  included  the  royalty  payment  paid,
accrued  or incurred by the taxpayer; (II) the related member during the
same taxable year directly or indirectly paid, accrued or incurred  such
portion  to  a person that is not a related member; and (III) the trans-
action giving rise to the royalty payment between the taxpayer  and  the
related member was undertaken for a valid business purpose.
  (ii)  The adjustment required in this paragraph shall not apply if the
taxpayer establishes, by clear and convincing evidence of the  type  and
in  the form specified by the commissioner, that: (I) the related member
was subject to tax on or measured by its net income  in  this  state  or
another  state  or  possession  of the United States or some combination
thereof; (II) the tax base for said tax  included  the  royalty  payment
paid,  accrued  or  incurred  by  the  taxpayer; and (III) the aggregate
effective rate of tax applied to the related member in  those  jurisdic-
tions  is  no less than eighty percent of the statutory rate of tax that
applied to the taxpayer under section two hundred ten  of  this  article
for the taxable year.
  (iii)  [The  adjustment  required in this paragraph shall not apply if
the taxpayer establishes, by clear and convincing evidence of  the  type
and  in  the  form  specified by the commissioner, that: (I) the royalty
payment was paid, accrued or incurred  to  a  related  member  organized
under  the  laws  of  a  country  other than the United States; (II) the
related member's income from the transaction was subject to a comprehen-
sive income tax treaty between such country and the United States; (III)
the related member was subject to tax in a foreign nation on a tax  base
that  included  the  royalty  payment  paid,  accrued or incurred by the
taxpayer; (IV) the related member's  income  from  the  transaction  was
taxed in such country at an effective rate of tax at least equal to that
imposed  by this state; and (V) the royalty payment was paid, accrued or
incurred pursuant to a transaction that was undertaken for a valid busi-
ness purpose and using terms that reflect an arm's length relationship.
  (iv)] The adjustment required in this paragraph shall not apply if the
taxpayer and the commissioner agree in writing to the application or use
of alternative adjustments or computations. The commissioner may, in his
or her discretion, agree  to  the  application  or  use  of  alternative
adjustments or computations when he or she concludes that in the absence
of  such  agreement  the  income  of  the taxpayer would not be properly
reflected.
  (p) For taxable years beginning after December thirty-first, two thou-
sand two, upon the disposition of  property  to  which  paragraph  [(o)]
(N-1) of this subdivision applies, the amount of any gain or loss inclu-
dible  in  entire net income shall be adjusted to reflect the inclusions
and exclusions from entire net income pursuant to subparagraph seventeen
of paragraph (a) and subparagraph seventeen of  paragraph  (b)  of  this
subdivision attributable to such property.
  (q)  For  purposes  of paragraphs [(o)] (N-1) and (p) of this subdivi-
sion, qualified resurgence zone property shall mean  qualified  property
described  in paragraph two of subsection k of section 168 of the inter-
nal revenue code substantially all of the use of which is in the  resur-
gence zone, as defined below, and is in the active conduct of a trade or
business  by the taxpayer in such zone, and the original use of which in
the resurgence zone commences with the taxpayer after  December  thirty-

S. 6359                            29                            A. 8559

first,  two thousand two. The resurgence zone shall mean the area of New
York county bounded on the south by a line running from the intersection
of the Hudson River with the Holland Tunnel, and running thence east  to
Canal  Street,  then running along the centerline of Canal Street to the
intersection of the Bowery and Canal Street, running thence in a  south-
easterly  direction  diagonally  across  Manhattan  Bridge Plaza, to the
Manhattan Bridge and thence along the centerline of the Manhattan Bridge
to the point where the centerline of the Manhattan Bridge  would  inter-
sect  with the easterly bank of the East River, and bounded on the north
by a line running from the intersection of the  Hudson  River  with  the
Holland  Tunnel and running thence north along West Avenue to the inter-
section of Clarkson Street then running east  along  the  centerline  of
Clarkson  Street  to the intersection of Washington Avenue, then running
south along the centerline of Washington Avenue to the  intersection  of
West  Houston  Street,  then  east  along the centerline of West Houston
Street, then at the intersection of the Avenue of the Americas  continu-
ing  east  along  the  centerline of East Houston Street to the easterly
bank of the East River.
  (R) SUBTRACTION MODIFICATION FOR QUALIFIED  RESIDENTIAL  LOAN  PORTFO-
LIOS.  (1)(A)  A TAXPAYER THAT IS EITHER A THRIFT INSTITUTION AS DEFINED
IN SUBPARAGRAPH THREE OF THIS PARAGRAPH OR A QUALIFIED COMMUNITY BANK AS
DEFINED IN SUBPARAGRAPH TWO OF PARAGRAPH (S)  OF  THIS  SUBDIVISION  AND
MAINTAINS  A QUALIFIED RESIDENTIAL LOAN PORTFOLIO AS DEFINED IN SUBPARA-
GRAPH TWO OF THIS PARAGRAPH SHALL BE ALLOWED AS A DEDUCTION IN COMPUTING
ENTIRE NET INCOME THE AMOUNT, IF ANY, BY WHICH (I) THIRTY-TWO PERCENT OF
ITS ENTIRE NET  INCOME  DETERMINED  WITHOUT  REGARD  TO  THIS  PARAGRAPH
EXCEEDS  (II)  THE AMOUNTS DEDUCTED BY THE TAXPAYER PURSUANT TO SECTIONS
166 AND 585 OF THE INTERNAL REVENUE CODE LESS ANY  AMOUNTS  INCLUDED  IN
FEDERAL TAXABLE INCOME AS A RESULT OF A RECOVERY OF A LOAN.
  (B)(I) IF THE TAXPAYER IS IN A COMBINED REPORT, THIS DEDUCTION WILL BE
COMPUTED ON A COMBINED BASIS. IN THAT INSTANCE, THE ENTIRE NET INCOME OF
THE COMBINED GROUP FOR PURPOSES OF THIS PARAGRAPH SHALL BE MULTIPLIED BY
A  FRACTION,  THE  NUMERATOR OF WHICH IS THE AVERAGE TOTAL ASSETS OF ALL
THE THRIFT INSTITUTIONS OR QUALIFIED COMMUNITY  BANKS  INCLUDED  IN  THE
COMBINED REPORT AND THE DENOMINATOR OF WHICH IS THE AVERAGE TOTAL ASSETS
OF ALL THE CORPORATIONS INCLUDED IN THE COMBINED REPORT.
  (II)  MEASUREMENT  OF  ASSETS  FOR  PURPOSES OF THIS CLAUSE. (I) TOTAL
ASSETS ARE THOSE ASSETS THAT ARE PROPERLY REFLECTED ON A BALANCE  SHEET,
COMPUTED  IN  THE SAME MANNER AS IS REQUIRED BY THE BANKING REGULATOR OF
THE TAXPAYERS INCLUDED IN THE COMBINED RETURN.
  (II) ASSETS WILL ONLY BE INCLUDED IF THE INCOME OR EXPENSES  OF  WHICH
ARE  PROPERLY  REFLECTED  (OR  WOULD HAVE BEEN PROPERLY REFLECTED IF NOT
FULLY DEPRECIATED OR EXPENSED, OR DEPRECIATED OR EXPENSED TO  A  NOMINAL
AMOUNT) IN THE COMPUTATION OF THE COMBINED GROUP'S ENTIRE NET INCOME FOR
THE TAXABLE YEAR. ASSETS WILL NOT INCLUDE DEFERRED TAX ASSETS AND INTAN-
GIBLE ASSETS IDENTIFIED AS "GOODWILL".
  (III)  TANGIBLE  REAL  AND PERSONAL PROPERTY, SUCH AS BUILDINGS, LAND,
MACHINERY, AND EQUIPMENT SHALL BE VALUED AT COST.  INTANGIBLE  PROPERTY,
SUCH AS LOANS AND INVESTMENTS, SHALL BE VALUED AT BOOK VALUE.
  (IV)  INTERCORPORATE  STOCKHOLDINGS  AND  BILLS,  NOTES  AND  ACCOUNTS
RECEIVABLE, AND OTHER INTERCORPORATE  INDEBTEDNESS  BETWEEN  THE  CORPO-
RATIONS INCLUDED IN THE COMBINED REPORT SHALL BE ELIMINATED.
  (V) AVERAGE ASSETS ARE COMPUTED USING THE ASSETS MEASURED ON THE FIRST
DAY  OF THE TAXABLE YEAR, AND ON THE LAST DAY OF EACH SUBSEQUENT QUARTER
OF THE TAXABLE YEAR.

S. 6359                            30                            A. 8559

  (2) QUALIFIED RESIDENTIAL LOAN PORTFOLIO. (A) A TAXPAYER  MAINTAINS  A
QUALIFIED  RESIDENTIAL  LOAN  PORTFOLIO IF AT LEAST SIXTY PERCENT OF THE
AMOUNT OF THE TOTAL ASSETS AT THE CLOSE  OF  THE  TAXABLE  YEAR  OF  THE
THRIFT  INSTITUTION  OR  QUALIFIED COMMUNITY BANK CONSISTS OF THE ASSETS
DESCRIBED  IN  ITEMS (I) THROUGH (XII) OF THIS CLAUSE, WITH THE APPLICA-
TION OF THE RULE IN ITEM (XIII). IF  THE  TAXPAYER  IS  A  MEMBER  OF  A
COMBINED  GROUP, THE DETERMINATION OF WHETHER THERE IS A QUALIFIED RESI-
DENTIAL LOAN PORTFOLIO WILL BE MADE BY AGGREGATING  THE  ASSETS  OF  THE
THRIFT INSTITUTIONS OR QUALIFIED COMMUNITY BANKS THAT ARE MEMBERS OF THE
COMBINED GROUP.
  ASSETS:
  (I) CASH;
  (II)  OBLIGATIONS  OF  THE  UNITED  STATES  OR OF A STATE OR POLITICAL
SUBDIVISION THEREOF, AND STOCK OR OBLIGATIONS OF A CORPORATION WHICH  IS
AN  INSTRUMENTALITY  OR  A GOVERNMENT SPONSORED ENTERPRISE OF THE UNITED
STATES OR OF A STATE OR POLITICAL SUBDIVISION THEREOF;
  (III) LOANS SECURED BY A DEPOSIT OR SHARE OF A MEMBER;
  (IV) LOANS SECURED BY AN INTEREST IN REAL PROPERTY WHICH IS  (OR  FROM
THE PROCEEDS OF THE LOAN, WILL BECOME) RESIDENTIAL REAL PROPERTY OR REAL
PROPERTY USED PRIMARILY FOR CHURCH PURPOSES, LOANS MADE FOR THE IMPROVE-
MENT  OF  RESIDENTIAL  REAL PROPERTY OR REAL PROPERTY USED PRIMARILY FOR
CHURCH PURPOSES, PROVIDED THAT FOR PURPOSES OF  THIS  ITEM,  RESIDENTIAL
REAL PROPERTY SHALL INCLUDE SINGLE OR MULTI-FAMILY DWELLINGS, FACILITIES
IN  RESIDENTIAL DEVELOPMENTS DEDICATED TO PUBLIC USE OR PROPERTY USED ON
A NONPROFIT BASIS FOR RESIDENTS, AND MOBILE HOMES NOT USED  ON  A  TRAN-
SIENT BASIS;
  (V)  PROPERTY  ACQUIRED  THROUGH  THE  LIQUIDATION  OF DEFAULTED LOANS
DESCRIBED IN ITEM (IV) OF THIS CLAUSE;
  (VI) ANY REGULAR OR RESIDUAL INTEREST IN A  REMIC,  AS  SUCH  TERM  IS
DEFINED  IN  SECTION  860D OF THE INTERNAL REVENUE CODE, BUT ONLY IN THE
PROPORTION WHICH THE ASSETS OF SUCH REMIC CONSIST OF PROPERTY  DESCRIBED
IN ANY OF THE PRECEDING ITEMS OF THIS CLAUSE, EXCEPT THAT IF NINETY-FIVE
PERCENT  OR  MORE  OF  THE  ASSETS OF SUCH REMIC ARE ASSETS DESCRIBED IN
ITEMS (I) THROUGH (V) OF THIS CLAUSE, THE ENTIRE INTEREST IN  THE  REMIC
SHALL QUALIFY;
  (VII)  ANY  MORTGAGE-BACKED  SECURITY  WHICH REPRESENTS OWNERSHIP OF A
FRACTIONAL UNDIVIDED INTEREST IN A TRUST, THE ASSETS  OF  WHICH  CONSIST
PRIMARILY  OF  MORTGAGE  LOANS,  PROVIDED  THAT  THE REAL PROPERTY WHICH
SERVES AS SECURITY FOR THE LOANS IS (OR FROM THE PROCEEDS OF  THE  LOAN,
WILL  BECOME) THE TYPE OF PROPERTY DESCRIBED IN ITEM (IV) OF THIS CLAUSE
AND ANY COLLATERALIZED  MORTGAGE  OBLIGATION,  THE  SECURITY  FOR  WHICH
CONSISTS  PRIMARILY OF MORTGAGE LOANS THAT MAINTAIN AS SECURITY THE TYPE
OF PROPERTY DESCRIBED IN ITEM (IV) OF THIS CLAUSE;
  (VIII) CERTIFICATES OF DEPOSIT IN, OR OBLIGATIONS  OF,  A  CORPORATION
ORGANIZED  UNDER  A  STATE LAW WHICH SPECIFICALLY AUTHORIZES SUCH CORPO-
RATION TO INSURE THE DEPOSITS OR SHARE ACCOUNTS OF MEMBER ASSOCIATIONS;
  (IX) LOANS SECURED BY AN INTEREST IN EDUCATIONAL, HEALTH,  OR  WELFARE
INSTITUTIONS OR FACILITIES, INCLUDING STRUCTURES DESIGNED OR USED PRIMA-
RILY FOR RESIDENTIAL PURPOSES FOR STUDENTS, RESIDENTS, AND PERSONS UNDER
CARE, EMPLOYEES, OR MEMBERS OF THE STAFF OF SUCH INSTITUTIONS OR FACILI-
TIES;
  (X)  LOANS  MADE  FOR THE PAYMENT OF EXPENSES OF COLLEGE OR UNIVERSITY
EDUCATION OR VOCATIONAL TRAINING;
  (XI) PROPERTY USED BY  THE  TAXPAYER  IN  SUPPORT  OF  BUSINESS  WHICH
CONSISTS  PRINCIPALLY OF ACQUIRING THE SAVINGS OF THE PUBLIC AND INVEST-
ING IN LOANS; AND

S. 6359                            31                            A. 8559

  (XII) LOANS FOR WHICH THE TAXPAYER IS THE CREDITOR AND WHICH ARE WHOL-
LY SECURED BY LOANS DESCRIBED IN ITEM (IV) OF THIS CLAUSE.
  (XIII)  THE  VALUE OF ACCRUED INTEREST RECEIVABLE AND ANY LOSS-SHARING
COMMITMENT OR OTHER LOAN GUARANTY  BY  A  GOVERNMENTAL  AGENCY  WILL  BE
CONSIDERED  PART OF THE BASIS IN THE LOANS TO WHICH THE ACCRUED INTEREST
OR LOSS PROTECTION APPLIES.
  (B) AT THE ELECTION OF  THE  TAXPAYER,  THE  PERCENTAGE  SPECIFIED  IN
CLAUSE  (A)  OF  THIS  SUBPARAGRAPH SHALL BE APPLIED ON THE BASIS OF THE
AVERAGE ASSETS OUTSTANDING DURING THE TAXABLE YEAR, IN LIEU OF THE CLOSE
OF THE TAXABLE YEAR. THE TAXPAYER CAN ELECT TO COMPUTE AN AVERAGE  USING
THE ASSETS MEASURED ON THE FIRST DAY OF THE TAXABLE YEAR AND ON THE LAST
DAY OF EACH SUBSEQUENT QUARTER, OR MONTH OR DAY DURING THE TAXABLE YEAR.
THIS ELECTION MAY BE MADE ANNUALLY.
  (C)  FOR  PURPOSES  OF  THIS  COMPUTATION, THE DEFINITION OF ASSETS IN
CLAUSE (B) OF SUBPARAGRAPH ONE OF THIS PARAGRAPH APPLIES.
  (D) FOR PURPOSES OF ITEM (IV) OF CLAUSE (A) OF THIS SUBPARAGRAPH, IF A
MULTIFAMILY STRUCTURE SECURING A LOAN IS USED IN PART FOR NONRESIDENTIAL
USE PURPOSES, THE ENTIRE LOAN IS DEEMED A RESIDENTIAL REAL PROPERTY LOAN
IF THE PLANNED RESIDENTIAL USE EXCEEDS EIGHTY PERCENT OF THE  PROPERTY'S
PLANNED  USE  (MEASURED,  AT  THE  TAXPAYER'S  ELECTION, BY USING SQUARE
FOOTAGE OR GROSS RENTAL REVENUE, AND DETERMINED AS OF THE TIME THE  LOAN
IS MADE).
  (E)  FOR  PURPOSES  OF  ITEM  (IV) OF CLAUSE (A) OF THIS SUBPARAGRAPH,
LOANS MADE TO FINANCE THE ACQUISITION OR DEVELOPMENT OF  LAND  SHALL  BE
DEEMED  TO  BE LOANS SECURED BY AN INTEREST IN RESIDENTIAL REAL PROPERTY
IF THERE IS A REASONABLE ASSURANCE THAT THE PROPERTY WILL  BECOME  RESI-
DENTIAL  REAL  PROPERTY  WITHIN A PERIOD OF THREE YEARS FROM THE DATE OF
ACQUISITION OF SUCH LAND; BUT THIS SENTENCE  SHALL  NOT  APPLY  FOR  ANY
TAXABLE  YEAR  UNLESS,  WITHIN SUCH THREE YEAR PERIOD, SUCH LAND BECOMES
RESIDENTIAL REAL PROPERTY.  FOR  PURPOSES  OF  DETERMINING  WHETHER  ANY
INTEREST  IN  A  REMIC  QUALIFIES  UNDER ITEM (VI) OF CLAUSE (A) OF THIS
SUBPARAGRAPH, ANY REGULAR INTEREST IN ANOTHER REMIC HELD BY  SUCH  REMIC
SHALL  BE  TREATED AS A LOAN DESCRIBED IN A PRECEDING ITEM UNDER PRINCI-
PLES SIMILAR TO THE PRINCIPLE OF SUCH ITEM (VI),  EXCEPT  THAT  IS  SUCH
REMICS  ARE  PART  OF  A  TIERED STRUCTURE, THEY SHALL BE TREATED AS ONE
REMIC FOR PURPOSES OF SUCH ITEM (VI).
  (3) FOR PURPOSES OF  THIS  PARAGRAPH,  A  "THRIFT  INSTITUTION"  IS  A
SAVINGS  BANK, A SAVINGS AND LOAN ASSOCIATION, OR OTHER SAVINGS INSTITU-
TION CHARTERED AND SUPERVISED AS SUCH UNDER FEDERAL OR STATE LAW.
  (S) SUBTRACTION MODIFICATION FOR COMMUNITY BANKS. (1) A TAXPAYER  THAT
IS  A  QUALIFIED  COMMUNITY  BANK AS DEFINED IN SUBPARAGRAPH TWO OF THIS
PARAGRAPH OR A THRIFT INSTITUTION AS DEFINED IN  SUBPARAGRAPH  THREE  OF
PARAGRAPH  (R)  OF  THIS  SUBDIVISION  SHALL  BE  ALLOWED A DEDUCTION IN
COMPUTING ENTIRE NET INCOME EQUAL TO THE AMOUNT COMPUTED UNDER  SUBPARA-
GRAPH THREE OF THIS PARAGRAPH.
  (2)  TO  BE  A  QUALIFIED  COMMUNITY BANK, A TAXPAYER MUST SATISFY THE
FOLLOWING CONDITIONS.
  (A) IT IS A BANK OR TRUST COMPANY ORGANIZED UNDER OR  SUBJECT  TO  THE
PROVISIONS OF ARTICLE THREE OF THE BANKING LAW OR A COMPARABLE PROVISION
OF THE LAWS OF ANOTHER STATE, OR A NATIONAL BANKING ASSOCIATION.
  (B)  THE  AVERAGE  VALUE  DURING THE TAXABLE YEAR OF THE ASSETS OF THE
TAXPAYER, OR THE ASSETS OF THE AFFILIATED GROUP OF  THE  TAXPAYER,  MUST
NOT  EXCEED  EIGHT  BILLION  DOLLARS.  FOR  PURPOSES OF THIS CLAUSE, THE
AFFILIATED GROUP OF THE TAXPAYER INCLUDES ANY CORPORATION THAT MEETS THE
OWNERSHIP REQUIREMENTS TO BE INCLUDED IN A COMBINED REPORT SPECIFIED  IN

S. 6359                            32                            A. 8559

PARAGRAPH  (A)  OF  SUBDIVISION TWO OF SECTION TWO HUNDRED TEN-C OF THIS
ARTICLE.
  (3)(A) THE SUBTRACTION MODIFICATION SHALL BE COMPUTED AS FOLLOWS:
  (I)  MULTIPLY THE TAXPAYER'S NET INTEREST INCOME FROM LOANS DURING THE
TAXABLE YEAR BY A FRACTION, THE NUMERATOR OF WHICH IS THE GROSS INTEREST
INCOME DURING THE TAXABLE YEAR FROM QUALIFYING LOANS AND THE DENOMINATOR
OF WHICH IS THE GROSS INTEREST INCOME DURING THE TAXABLE YEAR  FROM  ALL
LOANS.
  (II)  MULTIPLY  THE  AMOUNT DETERMINED IN CLAUSE (I) BY FORTY PERCENT.
THIS PRODUCT IS THE AMOUNT OF THE DEDUCTION  ALLOWED  UNDER  THIS  PARA-
GRAPH.
  (B)(I) NET INTEREST INCOME FROM LOANS SHALL MEAN GROSS INTEREST INCOME
FROM  LOANS  LESS  GROSS  INTEREST  EXPENSE  FROM  LOANS. GROSS INTEREST
EXPENSE FROM LOANS IS DETERMINED BY MULTIPLYING GROSS  INTEREST  EXPENSE
BY  A  FRACTION,  THE  NUMERATOR  OF WHICH IS THE AVERAGE TOTAL VALUE OF
LOANS OWNED BY THE THRIFT INSTITUTION OR COMMUNITY BANK DURING THE TAXA-
BLE YEAR AND THE DENOMINATOR OF WHICH IS THE AVERAGE TOTAL ASSETS OF THE
THRIFT INSTITUTION OR COMMUNITY BANK DURING THE TAXABLE YEAR.
  (II) MEASUREMENT OF ASSETS FOR PURPOSES  OF  THIS  CLAUSE.  (I)  TOTAL
ASSETS  ARE THOSE ASSETS THAT ARE PROPERLY REFLECTED ON A BALANCE SHEET,
COMPUTED IN THE SAME MANNER AS IS REQUIRED BY THE BANKING  REGULATOR  OF
THE TAXPAYERS INCLUDED IN THE COMBINED RETURN.
  (II)  ASSETS  WILL ONLY BE INCLUDED IF THE INCOME OR EXPENSES OF WHICH
ARE PROPERLY REFLECTED (OR WOULD HAVE BEEN  PROPERLY  REFLECTED  IF  NOT
FULLY  DEPRECIATED  OR EXPENSED, OR DEPRECIATED OR EXPENSED TO A NOMINAL
AMOUNT) IN THE COMPUTATION OF THE TAXPAYER'S ENTIRE NET INCOME  FOR  THE
TAXABLE YEAR. ASSETS WILL NOT INCLUDE DEFERRED TAX ASSETS AND INTANGIBLE
ASSETS IDENTIFIED AS "GOODWILL".
  (III)  TANGIBLE  REAL  AND PERSONAL PROPERTY, SUCH AS BUILDINGS, LAND,
MACHINERY, AND EQUIPMENT SHALL BE VALUED AT COST.  INTANGIBLE  PROPERTY,
SUCH AS LOANS AND INVESTMENTS, SHALL BE VALUED AT BOOK VALUE.
  (IV)  AVERAGE  ASSETS  ARE  COMPUTED  USING THE ASSETS MEASURED ON THE
FIRST DAY OF THE TAXABLE YEAR, AND ON THE LAST DAY  OF  EACH  SUBSEQUENT
QUARTER OF THE TAXABLE YEAR.
  (C) A QUALIFYING LOAN IS A LOAN THAT MEETS THE CONDITIONS SPECIFIED IN
SUBCLAUSE (I) OF THIS CLAUSE AND SUBCLAUSE (II) OF THIS CLAUSE.
  (I)  THE  LOAN  IS  ORIGINATED OR PURCHASED BY THE QUALIFIED COMMUNITY
BANK  OR  THRIFT  INSTITUTION  IMMEDIATELY  AFTER  ITS  ORIGINATION   IN
CONNECTION  WITH  A COMMITMENT TO PURCHASE MADE BY THE BANK PRIOR TO THE
LOAN'S ORIGINATION.
  (II) THE LOAN IS A SMALL BUSINESS LOAN, THE PRINCIPAL  AMOUNT  OF  THE
LOAN  IS  ONE  MILLION  DOLLARS  OR  LESS,  WHERE EITHER THE BORROWER IS
LOCATED IN THIS STATE AS DETERMINED UNDER SECTION TWO HUNDRED  TEN-A  OF
THIS ARTICLE AND THE LOAN IS NOT SECURED BY REAL PROPERTY LOCATED IN NEW
YORK, OR THE LOAN IS SECURED BY REAL PROPERTY LOCATED IN NEW YORK.
  10.  The term "calendar year" means a period of twelve calendar months
(or any shorter period  beginning  on  the  date  the  taxpayer  becomes
subject  to  the tax imposed by this article) ending on the thirty-first
day of December, provided the taxpayer keeps its books on the  basis  of
such  period  or on the basis of any period ending on any day other than
the last day of a calendar month, or provided the taxpayer does not keep
books, and includes, in case the taxpayer  changes  the  period  on  the
basis of which it keeps its books from a fiscal year to a calendar year,
the  period from the close of its last old fiscal year up to and includ-
ing the following December thirty-first. The term "fiscal year" means  a
period of twelve calendar months (or any shorter period beginning on the

S. 6359                            33                            A. 8559

date  the  taxpayer  becomes subject to the tax imposed by this article)
ending on the last day of any month other than  December,  provided  the
taxpayer  keeps  its books on the basis of such period, and includes, in
case  the  taxpayer changes the period on the basis of which it keeps it
books from a calendar year to a fiscal year or from one fiscal  year  to
another  fiscal year, the period from the close of its last old calendar
or fiscal year up to the date designated as the close of its new  fiscal
year.
  11.  The  term  "tangible  personal property" means corporeal personal
property,  such  as  machinery,  tools,  implements,  goods,  wares  and
merchandise,  and  does  not  mean  money,  deposits in banks, shares of
stock, bonds, notes, credits or evidences of an interest in property and
evidences of debt.
  12. The term elected or appointed officer shall include the  chairman,
president,  vice-president,  secretary,  assistant secretary, treasurer,
assistant treasurer, comptroller, and also any other officer,  irrespec-
tive  of  his title, who is charged with and performs any of the regular
functions of any such officer, unless the  total  compensation  of  such
officer is derived exclusively from the receipt of commissions. A direc-
tor  shall  be  considered  an  elected  or appointed officer only if he
performs duties ordinarily performed by an officer.
  13. The term "manufacturer" means a taxpayer or,  in  the  case  of  a
combined  report,  a  combined  group, that, during the taxable year, is
principally engaged in manufacturing. A taxpayer or a combined group  is
principally  engaged  in manufacturing if more than fifty percent of the
gross receipts of the taxpayer  or  the  combined  group,  respectively,
during  the  taxable year are derived from the sale of goods produced by
manufacturing. In computing a combined group's gross receipts, intercor-
porate receipts shall be eliminated. In computing gross receipts  for  a
taxpayer that is a partner in partnership, inter-entity receipts between
the taxpayer and such partnership shall be eliminated.
  14.  (a)  The  term  "manufacturing"  means the process of working raw
materials into wares suitable for use or which  gives  new  shapes,  new
quality  or  new  combinations  to matter which already has gone through
some artificial process by the use of machinery, tools,  appliances  and
other similar equipment.
  (b)  Notwithstanding  the definition of manufacturing in paragraph (a)
of this subdivision:
  (i) The generation and distribution of electricity, the extraction and
distribution of natural gas, and the production of steam associated with
the generation of electricity does not constitute manufacturing.
  (ii) The creation, production or reproduction of  a  film,  television
show or commercial does not constitute manufacturing.
  (iii)  The  blending of two or more fuels does not constitute manufac-
turing.
  (iv) The mass production of food  products  for  wholesale  commercial
distribution and sale constitutes manufacturing.
  15.  The  term  "qualified New York manufacturer" means a manufacturer
that has property in the state that is used in manufacturing and  either
the  fair market value of that property at the close of the taxable year
is at least ten million dollars or all of its real and personal property
is located in New York. A taxpayer or, in the case of a combined report,
a combined group, that does not  satisfy  the  criteria  in  subdivision
thirteen of this section may be a qualified New York manufacturer if the
taxpayer  or the combined group employs during the taxable year at least
two thousand five hundred employees in manufacturing in New York and the

S. 6359                            34                            A. 8559

taxpayer or the combined group has property in the state used  in  manu-
facturing,  the  adjusted basis of which for federal income tax purposes
at the close of the  taxable  year  is  at  least  one  hundred  million
dollars.
  [19.  The  term "fulfillment services" shall mean any of the following
services performed by an entity on its premises on behalf of a  purchas-
er:
  (a)  the  acceptance  of  orders electronically or by mail, telephone,
telefax or internet;
  (b) responses to consumer correspondence or  inquiries  electronically
or by mail, telephone, telefax or internet;
  (c) billing and collection activities; or
  (d)  the  shipment of orders from an inventory of products offered for
sale by the purchaser.]
  S 5. Subdivisions 1, 2, 4, 5, 6, 7 and 8 of section  209  of  the  tax
law, subdivisions 1 and 6 as amended by chapter 817 of the laws of 1987,
subdivision  2 as amended by chapter 75 of the laws of 1998, subdivision
4 as amended by section 27 of LBD number 74024-03-4, subdivisions 5  and
7  as  amended  by  section  2 of part FF-1 of chapter 57 of the laws of
2008, and subdivision 8 as added by section 1 of part O of chapter 61 of
the laws of 2006, are amended to read as follows:
  1. (A) For the privilege of exercising its corporate franchise, or  of
doing business, or of employing capital, or of owning or leasing proper-
ty in this state in a corporate or organized capacity, or of maintaining
an  office  in this state, OR OF DERIVING RECEIPTS FROM ACTIVITY IN THIS
STATE, for all or any part of each of  its  fiscal  or  calendar  years,
every  domestic or foreign corporation, except corporations specified in
subdivision four of this section, shall annually pay  a  franchise  tax,
upon  the  basis  of its [entire net] BUSINESS income base, or upon such
other basis as may be  applicable  as  hereinafter  provided,  for  such
fiscal  or  calendar  year  or  part thereof, on a report which shall be
filed, except as hereinafter provided, on or before the fifteenth day of
March next succeeding the close of each such year, or, in the case of  a
corporation  which reports on the basis of a fiscal year, within two and
one-half months after the close of such fiscal year, and shall  be  paid
as hereinafter provided.
  (B)  A CORPORATION IS DERIVING RECEIPTS FROM ACTIVITY IN THIS STATE IF
IT HAS RECEIPTS WITHIN THIS STATE OF ONE MILLION DOLLARS OR MORE IN  THE
TAXABLE  YEAR.  FOR  PURPOSES OF THIS SECTION, THE TERM "RECEIPTS" MEANS
THE RECEIPTS THAT ARE SUBJECT TO THE APPORTIONMENT RULES  SET  FORTH  IN
SECTION TWO HUNDRED TEN-A OF THIS ARTICLE, AND THE TERM "RECEIPTS WITHIN
THIS  STATE"  MEANS THE RECEIPTS INCLUDED IN THE NUMERATOR OF THE APPOR-
TIONMENT FACTOR DETERMINED UNDER SECTION TWO HUNDRED TEN-A OF THIS ARTI-
CLE.
  (C) A CORPORATION IS DOING BUSINESS IN THIS STATE IF (I) IT HAS ISSUED
CREDIT CARDS TO ONE THOUSAND  OR  MORE  CUSTOMERS  WHO  HAVE  A  MAILING
ADDRESS  WITHIN  THIS STATE AS OF THE LAST DAY OF ITS TAXABLE YEAR, (II)
IT HAS MERCHANT CUSTOMER CONTRACTS WITH MERCHANTS AND THE  TOTAL  NUMBER
OF  LOCATIONS  COVERED  BY  THOSE  CONTRACTS EQUALS ONE THOUSAND OR MORE
LOCATIONS IN THIS STATE TO WHOM THE CORPORATION  REMITTED  PAYMENTS  FOR
CREDIT  CARD  TRANSACTIONS  DURING THE TAXABLE YEAR, OR (III) THE SUM OF
THE NUMBER OF CUSTOMERS DESCRIBED IN SUBPARAGRAPH (I) OF THIS  PARAGRAPH
PLUS  THE  NUMBER  OF  LOCATIONS  COVERED  BY ITS CONTRACTS DESCRIBED IN
SUBPARAGRAPH (II) OF THIS PARAGRAPH EQUALS ONE THOUSAND OR  MORE.    FOR
PURPOSES  OF THIS PARAGRAPH, RECEIPTS FROM PROCESSING CREDIT CARD TRANS-
ACTIONS FOR MERCHANTS INCLUDE MERCHANT DISCOUNT  FEES  RECEIVED  BY  THE

S. 6359                            35                            A. 8559

CORPORATION.  AS USED IN THIS PARAGRAPH, THE TERM "CREDIT CARD" INCLUDES
BANK, CREDIT, TRAVEL AND ENTERTAINMENT CARDS.
  (D)(I)  A  CORPORATION WITH LESS THAN ONE MILLION DOLLARS BUT AT LEAST
TEN THOUSAND DOLLARS OF RECEIPTS WITHIN THIS STATE  IN  A  TAXABLE  YEAR
THAT  IS  PART  OF  A COMBINED REPORTING GROUP IS DERIVING RECEIPTS FROM
ACTIVITY IN THIS STATE IF THE RECEIPTS WITHIN THIS STATE OF THE  MEMBERS
OF  THE COMBINED REPORTING GROUP THAT HAVE AT LEAST TEN THOUSAND DOLLARS
OF RECEIPTS WITHIN THIS STATE IN THE AGGREGATE MEET  THE  THRESHOLD  SET
FORTH IN PARAGRAPH (B) OF THIS SUBDIVISION.
  (II)  A CORPORATION THAT DOES NOT MEET ANY OF THE THRESHOLDS SET FORTH
IN PARAGRAPH (C) OF THIS SUBDIVISION BUT HAS AT LEAST TEN CUSTOMERS,  OR
LOCATIONS,  OR CUSTOMERS AND LOCATIONS, AS DESCRIBED IN PARAGRAPH (C) OF
THIS SUBDIVISION, AND IS PART OF A COMBINED  REPORTING  GROUP  IS  DOING
BUSINESS IN THIS STATE IF THE NUMBER OF CUSTOMERS, LOCATIONS, OR CUSTOM-
ERS  AND  LOCATIONS,  WITHIN  THIS  STATE OF THE MEMBERS OF THE COMBINED
REPORTING GROUP THAT HAVE AT LEAST TEN CUSTOMERS, LOCATIONS, OR  CUSTOM-
ERS  AND  LOCATIONS, WITHIN THIS STATE IN THE AGGREGATE MEETS ANY OF THE
THRESHOLDS SET FORTH IN PARAGRAPH (C) OF THIS SUBDIVISION.
  (E) AT THE END OF EACH YEAR, THE COMMISSIONER SHALL REVIEW THE CUMULA-
TIVE PERCENTAGE CHANGE IN THE CONSUMER  PRICE  INDEX.  THE  COMMISSIONER
SHALL ADJUST THE RECEIPT THRESHOLDS SET FORTH IN THIS SUBDIVISION IF THE
CONSUMER  PRICE  INDEX  HAS CHANGED BY TEN PERCENT OR MORE SINCE JANUARY
FIRST, TWO THOUSAND FIFTEEN, OR SINCE THE DATE THAT THE THRESHOLDS  WERE
LAST  ADJUSTED  UNDER THIS SUBDIVISION. THE THRESHOLDS SHALL BE ADJUSTED
TO REFLECT THAT CUMULATIVE  PERCENTAGE  CHANGE  IN  THE  CONSUMER  PRICE
INDEX. THE ADJUSTED THRESHOLDS SHALL BE ROUNDED TO THE NEAREST ONE THOU-
SAND  DOLLARS.  AS  USED IN THIS PARAGRAPH, "CONSUMER PRICE INDEX" MEANS
THE CONSUMER PRICE INDEX FOR ALL URBAN CONSUMERS (CPI-U) AVAILABLE  FORM
THE BUREAU OF LABOR STATISTICS OF THE UNITED STATES DEPARTMENT OF LABOR.
ANY  ADJUSTMENT  SHALL APPLY TO TAX PERIODS THAT BEGIN AFTER THE ADJUST-
MENT IS MADE.
  2. A foreign corporation shall not be deemed  to  be  doing  business,
employing  capital, owning or leasing property, or maintaining an office
in this state, OR DERIVING RECEIPTS FROM ACTIVITY IN THIS STATE, for the
purposes of this article, by reason  of  (a)  the  maintenance  of  cash
balances  with banks or trust companies in this state, or (b) the owner-
ship of shares of stock or securities kept in this state, if kept  in  a
safe  deposit  box,  safe,  vault  or  other  receptacle  rented for the
purpose, or if pledged as collateral security, or if deposited with  one
or more banks or trust companies, or brokers who are members of a recog-
nized  security exchange, in safekeeping or custody accounts, or (c) the
taking of any action by any such bank or trust company or broker,  which
is  incidental  to  the rendering of safekeeping or custodian service to
such corporation, or (d) the maintenance of an office in this  state  by
one or more officers or directors of the corporation who are not employ-
ees  of  the corporation if the corporation otherwise is not doing busi-
ness in this state, and does not employ capital or own or lease property
in this state, or (e) the keeping of books or records of  a  corporation
in this state if such books or records are not kept by employees of such
corporation  and such corporation does not otherwise do business, employ
capital, own or lease property or maintain an office in this  state,  or
(f)  [the  use  of fulfillment services of a person other than an affil-
iated person and the ownership of property stored  on  the  premises  of
such  person  in conjunction with such services, or (g)] any combination
of the foregoing activities. [For purposes of this subdivision,  persons
are  affiliated  persons  with  respect  to each other where one of such

S. 6359                            36                            A. 8559

persons has an ownership interest of more  than  five  percent,  whether
direct or indirect, in the other, or where an ownership interest of more
than  five  percent, whether direct or indirect, is held in each of such
persons  by  another  person  or  by  a group of other persons which are
affiliated persons with respect to each other. The term "person" in  the
preceding  sentence  and in paragraph (f) of this subdivision shall have
the meaning ascribed  thereto  by  subdivision  (a)  of  section  eleven
hundred one of this chapter.]
  4.  Corporations liable to tax under sections one hundred eighty-three
to one hundred  eighty-four-a,  inclusive,  corporations  taxable  under
[articles  thirty-two  and]  ARTICLE  thirty-three  of this chapter, any
trust company organized under a law of this state all of  the  stock  of
which  is  owned by not less than twenty savings banks organized under a
law of this state, [bank holding companies filing a combined  return  in
accordance  with subsection (f) of section fourteen hundred sixty-two of
this chapter,] a captive REIT or a captive RIC filing a combined  return
under  [either  subsection (f) of section fourteen hundred sixty-two or]
subdivision (f) of section fifteen hundred fifteen of this chapter,  and
housing  companies organized and operating pursuant to the provisions of
article two or article five of the private housing finance law and hous-
ing development fund companies organized pursuant to the  provisions  of
article  eleven  of the private housing finance law shall not be subject
to tax under this article.
  5. For any taxable year of a real estate investment trust  as  defined
in section eight hundred fifty-six of the internal revenue code in which
such  trust  is  subject  to federal income taxation under section eight
hundred fifty-seven of such code, such trust shall be subject to  a  tax
computed under either paragraph (a) [, (c)] or (d) of subdivision one of
section  two  hundred  ten  of  this  chapter,  whichever  is [greatest]
GREATER, and shall not be subject to any tax under  article  [thirty-two
or  article]  thirty-three  of  this  chapter  except for a captive REIT
required to file a combined return under  [subdivision  (f)  of  section
fourteen  hundred  sixty-two  or]  subdivision  (f)  of  section fifteen
hundred fifteen of this chapter. In the  case  of  such  a  real  estate
investment  trust, including a captive REIT as defined in section two of
this chapter, the term "entire net income" means "real estate investment
trust taxable income" as defined in paragraph two of subdivision (b)  of
section  eight hundred fifty-seven (as modified by section eight hundred
fifty-eight) of the internal revenue code plus the amount taxable  under
paragraph  three of subdivision (b) of section eight hundred fifty-seven
of such code, subject to the [modification]  MODIFICATIONS  required  by
subdivision  nine  of  section two hundred eight of this article [(other
than the modification required by  subparagraph  two  of  paragraph  (a)
thereof)  including the modifications required by paragraphs (d) and (e)
of subdivision three of section two hundred ten of this article].
  6. For any taxable year of a DISC, not exempt from tax under paragraph
(i) of subdivision nine of section two hundred eight  of  this  article,
the  taxes  imposed by subdivision one of this section shall be computed
only under either paragraph (b) or (d) of subdivision one of section two
hundred ten of this chapter, whichever is greater[, and paragraph (e) of
such subdivision].
  7. For any taxable year, beginning on or after January first, nineteen
hundred eighty of a regulated investment company, as defined in  section
eight  hundred  fifty-one  of  the  internal revenue code, in which such
company is subject  to  federal  income  taxation  under  section  eight
hundred  fifty-two  of such code, such company shall be subject to a tax

S. 6359                            37                            A. 8559

computed under either paragraph (a)[, (c)] or (d) of subdivision one  of
section  two  hundred  ten  of  this  chapter,  whichever  is [greatest]
GREATER, and shall not be subject to any tax under  article  [thirty-two
or  article]  thirty-three  of  this  chapter  except  for a captive RIC
required to file a combined return under  [subdivision  (f)  of  section
fourteen  hundred  sixty-two  or]  subdivision  (f)  of  section fifteen
hundred fifteen of this chapter. In the case of such a regulated invest-
ment company, including a captive RIC as defined in section two of  this
chapter,  the term "entire net income" means "investment company taxable
income" as defined in paragraph two of subdivision (b) of section  eight
hundred  fifty-two,  as modified by section eight hundred fifty-five, of
the internal revenue code plus the amount taxable under paragraph  three
of  subdivision  (b)  of  section  eight  hundred fifty-two of such code
subject to the [modification] MODIFICATIONS required by subdivision nine
of section two hundred eight of this chapter[, other than the  modifica-
tion  required by subparagraph two of paragraph (a) and by paragraph (f)
thereof, including the modification required by paragraphs (d)  and  (e)
of subdivision three of section two hundred ten of this chapter].
  8. For any taxable year beginning on or after January first, two thou-
sand  six,  a  corporation  that  is no longer doing business, employing
capital, or owning or leasing property, OR DERIVING RECEIPTS FROM ACTIV-
ITY in this state in a corporate or organized capacity that has filed  a
final  tax return with the department for the last tax year it was doing
business and has no outstanding tax liability for such final tax  return
or  any  tax  return  for prior tax years shall be exempt from all taxes
imposed by paragraph (d) of subdivision one of section two  hundred  ten
of  this  article for tax years following the last year such corporation
was doing business.
  S 6. Section 209-A of the tax law is REPEALED.
  S 7. The section heading and subdivision 1 of section 209-B of the tax
law, the section heading as amended by chapter 11 of the  laws  of  1983
and subdivision 1 as amended by section 4 of part A of chapter 59 of the
laws of 2013, are amended to read as follows:
  [Temporary  metropolitan]  METROPOLITAN  transportation  business  tax
surcharge.  1. (A) For the privilege of exercising its  corporate  fran-
chise,  or  of  doing business, or of employing capital, or of owning or
leasing property in a corporate or organized capacity, or of maintaining
an office, OR OF DERIVING RECEIPTS FROM  ACTIVITY  in  the  metropolitan
commuter  transportation  district,  for  all or any part of its taxable
year, there is hereby imposed on every corporation,  other  than  a  New
York  S  corporation,  subject  to tax under section two hundred nine of
this article, or any receiver, referee, trustee, assignee or other fidu-
ciary, or any officer or agent appointed by any court, who conducts  the
business  of  any such corporation, [for the taxable years commencing on
or after January first, nineteen hundred eighty-two  but  ending  before
December thirty-first, two thousand eighteen,] a tax surcharge, in addi-
tion to the tax imposed under section two hundred nine of this article[,
to  be  computed  at  the rate of eighteen]. SUCH SURCHARGE SHALL BE THE
PRODUCT OF TWENTY-FOUR AND ONE-HALF percent of  the  tax  imposed  under
such section two hundred nine for such taxable years or any part of such
taxable  years  [ending  before  December thirty-first, nineteen hundred
eighty-three after the deduction  of  any  credits  otherwise  allowable
under  this  article,  and  at  the rate of seventeen percent of the tax
imposed under such section for such taxable years or any  part  of  such
taxable years ending on or after December thirty-first, nineteen hundred
eighty-three after] BEFORE the deduction of any credits otherwise allow-

S. 6359                            38                            A. 8559

able  under  this  article; provided, however, that such [rates] RATE of
tax surcharge shall be applied only to that portion of the  tax  imposed
under  section  two  hundred  nine  of  this  article [after] BEFORE the
deduction of any credits otherwise allowable under this article which is
attributable  to  the taxpayer's business activity carried on within the
metropolitan commuter transportation district;  and  provided,  further,
[that  the  tax  surcharge  imposed by this section shall not be imposed
upon any taxpayer for more than four hundred thirty-two months. Provided
however, that for taxable years commencing on or after July first, nine-
teen hundred ninety-eight, such surcharge shall be calculated as if  the
tax  imposed  under section two hundred ten of this article were imposed
under the law in effect for taxable years commencing on  or  after  July
first,  nineteen  hundred  ninety-seven  and before July first, nineteen
hundred ninety-eight. Provided however, that for taxable years  commenc-
ing  on or after January first, two thousand seven, such surcharge shall
be calculated using the highest of the tax  bases  imposed  pursuant  to
paragraphs  (a),  (b),  (c)  or  (d)  of  subdivision one of section two
hundred ten of this article and the amount imposed under  paragraph  (e)
of  subdivision  one  of  such  section two hundred ten, for the taxable
year; and, provided further that, if such highest amount is the tax base
imposed under paragraph (a), (b) or (c) of such  subdivision,  then  the
surcharge  shall  be  computed as if the tax rates and limitations under
such paragraph were the tax rates and limitations under  such  paragraph
in  effect for taxable years commencing on or after July first, nineteen
hundred ninety-seven and before July  first,  nineteen  hundred  ninety-
eight]  THE  SURCHARGE  COMPUTED  ON  A  COMBINED REPORT SHALL INCLUDE A
SURCHARGE ON THE FIXED  DOLLAR  MINIMUM  TAX  FOR  EACH  MEMBER  OF  THE
COMBINED GROUP SUBJECT TO THE SURCHARGE UNDER THIS SUBDIVISION.
  (B)  A CORPORATION IS DERIVING RECEIPTS FROM ACTIVITY IN THE METROPOL-
ITAN COMMUTER TRANSPORTATION DISTRICT IF  IT  HAS  RECEIPTS  WITHIN  THE
METROPOLITAN  COMMUTER TRANSPORTATION DISTRICT OF ONE MILLION DOLLARS OR
MORE IN  A  TAXABLE  YEAR.  FOR  PURPOSES  OF  THIS  SECTION,  THE  TERM
"RECEIPTS"  MEANS  THE  RECEIPTS  THAT  ARE SUBJECT TO THE APPORTIONMENT
RULES SET FORTH IN SECTION TWO HUNDRED TEN-A OF THIS  ARTICLE,  AND  THE
TERM "RECEIPTS WITHIN THE METROPOLITAN COMMUTER TRANSPORTATION DISTRICT"
MEANS THE RECEIPTS INCLUDED IN THE NUMERATOR OF THE APPORTIONMENT FACTOR
DETERMINED UNDER SUBDIVISION TWO OF THIS SECTION.
  (C)  A  CORPORATION  IS  DOING  BUSINESS  IN THE METROPOLITAN COMMUTER
TRANSPORTATION DISTRICT IF (I) IT HAS ISSUED CREDIT CARDS TO  ONE  THOU-
SAND  OR  MORE CUSTOMERS WHO HAVE A MAILING ADDRESS WITHIN THE METROPOL-
ITAN COMMUTER TRANSPORTATION DISTRICT AS OF THE LAST DAY OF ITS  TAXABLE
YEAR,  (II)  IT  HAS  MERCHANT CUSTOMER CONTRACTS WITH MERCHANTS AND THE
TOTAL NUMBER OF LOCATIONS COVERED BY THOSE CONTRACTS EQUALS ONE THOUSAND
OR MORE LOCATIONS IN THE METROPOLITAN COMMUTER  TRANSPORTATION  DISTRICT
TO  WHOM  THE CORPORATION REMITTED PAYMENTS FOR CREDIT CARD TRANSACTIONS
DURING THE TAXABLE YEAR, OR (III) THE SUM OF  THE  NUMBER  OF  CUSTOMERS
DESCRIBED  IN  SUBPARAGRAPH  (I)  OF  THIS  PARAGRAPH PLUS THE NUMBER OF
LOCATIONS COVERED BY ITS CONTRACTS DESCRIBED  IN  SUBPARAGRAPH  (II)  OF
THIS  PARAGRAPH  EQUALS ONE THOUSAND OR MORE. FOR PURPOSES OF THIS PARA-
GRAPH, RECEIPTS FROM PROCESSING CREDIT CARD TRANSACTIONS  FOR  MERCHANTS
INCLUDE  MERCHANT  DISCOUNT FEES RECEIVED BY THE CORPORATION. AS USED IN
THIS PARAGRAPH, THE TERM "CREDIT CARD" INCLUDES BANK, CREDIT, TRAVEL AND
ENTERTAINMENT CARDS.
  (D)(I) A CORPORATION WITH LESS THAN ONE MILLION DOLLARS BUT  AT  LEAST
TEN THOUSAND DOLLARS OF RECEIPTS WITHIN THE METROPOLITAN COMMUTER TRANS-
PORTATION  DISTRICT IN A TAXABLE YEAR THAT IS PART OF A COMBINED REPORT-

S. 6359                            39                            A. 8559

ING GROUP IS DERIVING RECEIPTS FROM ACTIVITY IN THE METROPOLITAN  COMMU-
TER  TRANSPORTATION  DISTRICT  IF  THE  RECEIPTS WITHIN THE METROPOLITAN
COMMUTER TRANSPORTATION DISTRICT OF THE MEMBERS OF THE UNITARY  BUSINESS
GROUP  THAT  HAVE  AT  LEAST TEN THOUSAND DOLLARS OF RECEIPTS WITHIN THE
METROPOLITAN COMMUTER TRANSPORTATION DISTRICT IN THE AGGREGATE MEET  THE
THRESHOLD SET FORTH IN PARAGRAPH (B) OF THIS SUBDIVISION.
  (II)  A CORPORATION THAT DOES NOT MEET ANY OF THE THRESHOLDS SET FORTH
IN PARAGRAPH (C) OF THIS SUBDIVISION BUT HAS AT LEAST TEN CUSTOMERS,  OR
LOCATIONS,  OR  CUSTOMERS  AND LOCATIONS, AS DESCRIBED IN PARAGRAPH (C),
AND IS PART OF A COMBINED REPORTING  GROUP  IS  DOING  BUSINESS  IN  THE
METROPOLITAN  COMMUTER  TRANSPORTATION DISTRICT IF THE NUMBER OF CUSTOM-
ERS, LOCATIONS, OR CUSTOMERS  AND  LOCATIONS,  WITHIN  THE  METROPOLITAN
COMMUTER  TRANSPORTATION DISTRICT OF THE MEMBERS OF THE UNITARY BUSINESS
GROUP THAT HAVE AT LEAST TEN  CUSTOMERS,  LOCATIONS,  OR  CUSTOMERS  AND
LOCATIONS,  WITHIN  THE METROPOLITAN COMMUTER TRANSPORTATION DISTRICT IN
THE AGGREGATE MEETS ANY OF THE THRESHOLDS SET FORTH IN PARAGRAPH (C)  OF
THIS SUBDIVISION.
  (E) AT THE END OF EACH YEAR, THE COMMISSIONER SHALL REVIEW THE CUMULA-
TIVE  PERCENTAGE  CHANGE  IN  THE CONSUMER PRICE INDEX. THE COMMISSIONER
SHALL ADJUST THE RECEIPT THRESHOLDS SET FORTH IN THIS SUBDIVISION IF THE
CONSUMER PRICE INDEX HAS CHANGED BY TEN PERCENT OR  MORE  SINCE  JANUARY
FIRST,  TWO THOUSAND FIFTEEN, OR SINCE THE DATE THAT THE THRESHOLDS WERE
LAST ADJUSTED UNDER THIS SUBDIVISION. THE THRESHOLDS SHALL  BE  ADJUSTED
TO  REFLECT  THAT  CUMULATIVE  PERCENTAGE  CHANGE  IN THE CONSUMER PRICE
INDEX. THE ADJUSTED THRESHOLDS SHALL BE ROUNDED TO THE NEAREST ONE THOU-
SAND DOLLARS. AS USED IN THIS PARAGRAPH, "CONSUMER  PRICE  INDEX"  MEANS
THE  CONSUMER PRICE INDEX FOR ALL URBAN CONSUMERS (CPI-U) AVAILABLE FROM
THE BUREAU OF LABOR STATISTICS OF THE UNITED STATES DEPARTMENT OF LABOR.
ANY ADJUSTMENT SHALL APPLY TO TAX PERIODS THAT BEGIN AFTER  THE  ADJUST-
MENT IS MADE.
  S  8.  The  opening paragraph of subdivision 2 of section 209-B of the
tax law, as amended by chapter 11 of the laws of  1983,  is  amended  to
read as follows:
  The  portion of the taxpayer's business activity carried on within the
metropolitan commuter transportation district shall  be  determined  [by
multiplying the tax imposed under section two hundred nine of this arti-
cle by a percentage to be determined as follows:] PURSUANT TO THE METHOD
PRESCRIBED  IN SECTION TWO HUNDRED TEN-A OF THIS ARTICLE EXCEPT THAT THE
REFERENCES TO "WITHIN THE STATE" SHALL REFER TO WITHIN THE  METROPOLITAN
COMMUTER  TRANSPORTATION  DISTRICT AND REFERENCES TO "WITHIN AND WITHOUT
THE STATE" SHALL REFER TO WITHIN THE STATE.
  S 9. Paragraphs (a), (b), (c) and (d)  of  subdivision  2  of  section
209-B of the tax law are REPEALED.
  S  10.  Subdivisions  2-a  and 2-b of section 209-B of the tax law are
REPEALED.
  S 11. Subdivisions 3 and 5 of section 209-B of the tax  law,  subdivi-
sion 3 as amended by chapter 11 of the laws of 1983 and subdivision 5 as
amended  by  chapter  166  of  the  laws of 1991, are amended to read as
follows:
  3. A corporation shall not be deemed to be doing  business,  employing
capital, owning or leasing property, or maintaining an office, OR DERIV-
ING  RECEIPTS  FROM ACTIVITY in the metropolitan commuter transportation
district, for the purposes of this section, by reason of (a) the mainte-
nance of cash balances with banks or trust companies in the metropolitan
commuter transportation district, or (b)  the  ownership  of  shares  of
stock  or  securities  kept  in the metropolitan commuter transportation

S. 6359                            40                            A. 8559

district, if kept in a safe deposit box, safe, vault or other receptacle
rented for the purpose, or if pledged  as  collateral  security,  or  if
deposited  with one or more banks or trust companies, or brokers who are
members  of  a  recognized  security exchange, in safekeeping or custody
accounts, or (c) the taking of any action by  any  such  bank  or  trust
company  or  broker, which is incidental to the rendering of safekeeping
or custodian service to such corporation, or (d) the maintenance  of  an
office  in  the  metropolitan commuter transportation district by one or
more officers or directors of the corporation who are not  employees  of
the  corporation  if  the corporation otherwise is not doing business in
the metropolitan commuter transportation district, and does  not  employ
capital  or own or lease property in the metropolitan commuter transpor-
tation district, or (e) the keeping of books or records of a corporation
in the metropolitan commuter transportation district if  such  books  or
records  are  not  kept by employees of such corporation and such corpo-
ration does not otherwise do business,  employ  capital,  own  or  lease
property  or maintain an office in the metropolitan commuter transporta-
tion district, or (f) any combination of the foregoing activities.
  5. The provisions concerning  reports  under  [section]  SECTIONS  TWO
HUNDRED  TEN-C  AND  two  hundred  eleven  shall  be  applicable to this
section, except that for purposes of  an  automatic  extension  for  six
months  for  filing  a report covering the tax surcharge imposed by this
section, such automatic extension shall be allowed only  if  a  taxpayer
files with the commissioner an application for extension in such form as
said  commissioner may prescribe by regulation and pays on or before the
date of such filing in addition to any other amounts required under this
article, either ninety percent of the entire tax surcharge  required  to
be  paid  under this section for the applicable period, or not less than
the tax surcharge shown on the taxpayer's return for the preceding taxa-
ble year, if such preceding taxable year was a taxable  year  of  twelve
months;  provided,  however,  that in no event shall such amount be less
than the product of the following three amounts: (1) the  tax  surcharge
rate  in effect for the taxable year pursuant to subdivision one of this
section, (2) the fixed dollar minimum applicable  to  such  taxpayer  as
determined under paragraph (d) of subdivision one of section two hundred
ten  of this chapter for the taxable year, and (3) the percentage deter-
mined under subdivision two of this section for  the  preceding  taxable
year,  unless  the taxpayer was not subject to the tax surcharge imposed
pursuant to this section with respect to such year, in which  case  such
percentage  shall be deemed to be one hundred percent. The tax surcharge
imposed by this section shall be payable to the commissioner in full  at
the  time  the report is required to be filed, and such tax surcharge or
the balance thereof, imposed on any taxpayer which  ceases  to  exercise
its franchise or be subject to the tax surcharge imposed by this section
shall  be payable to the commissioner at the time the report is required
to be filed, provided such tax surcharge of a domestic corporation which
continues to possess its franchise shall be subject to adjustment as the
circumstances may require; all other tax surcharges of any such  taxpay-
er,  which  pursuant  to  the foregoing provisions of this section would
otherwise be payable subsequent to the time such report is  required  to
be  filed,  shall  nevertheless  be  payable  at  such  time. All of the
provisions of this article presently applicable are  applicable  to  the
tax surcharge imposed by this section.
  S 12. Subdivision 1 of section 210 of the tax law, as added by chapter
817  of  the laws of 1987, the opening paragraph as amended by section 1
of part D and paragraph (g) as amended by section 2 of part A of chapter

S. 6359                            41                            A. 8559

63 of the laws of 2000, paragraph (a) as amended by  section 2 of part N
of chapter 60 of the laws of 2007, subparagraphs 2 and  3  of  paragraph
(b) as amended by section 17 of LBD number 74021-03-4, subparagraph (ii)
of paragraph (c) as amended by section 2 of part C and subparagraph 5 of
paragraph  (d) as added by section 3 of part C of chapter 56 of the laws
of 2011, subparagraphs (vi) and (vii) of paragraph  (a)  as  amended  by
section 16 of LBD number 74021-03-4, subparagraph (iii) of paragraph (c)
as  added by section 3 of part Z, and subparagraph 6 of paragraph (d) as
added by section 4 of part Z of chapter 59 of the laws  of  2013,  para-
graph  (b)  as amended by section 1 of part GG1, subparagraph 3 of para-
graph (d) as amended by section 3 of part AA1, subparagraph 4  of  para-
graph  (d)  as  added  by  section  2  of part AA1 and subparagraph 1 of
paragraph (g) as amended by section 4 of part AA1 of chapter 57  of  the
laws  of  2008,  paragraph  (c)  as  amended by section 10 of part A and
subparagraph 1 of paragraph (d) as amended by section 12 of  part  A  of
chapter  56 of the laws of 1998, paragraph (d) as amended by chapter 760
of the laws of 1992, paragraph (e) as amended by section 1 of part P  of
chapter  407  of the laws of 1999, paragraph (f) as amended by section 2
of part E of chapter 61 of the laws of 2005 and paragraph (h)  as  added
by section 20 of LBD number 74021-03-4, is amended to read as follows:
  1.  The  tax imposed by subdivision one of section two hundred nine of
this chapter shall be: (A) in the case of each taxpayer other than a New
York S corporation or a qualified homeowners association,  the  [sum  of
(1) the] highest of the amounts prescribed in paragraphs (a), (b), [(c)]
and  (d) of this subdivision [and (2) the amount prescribed in paragraph
(e) of this subdivision], (B) in the case of  each  New  York  S  corpo-
ration,  the  amount  prescribed in paragraph [(g)] (D) of this subdivi-
sion, and (C) in the case of a  qualified  homeowners  association,  the
[sum  of (1) the] highest of the amounts prescribed in paragraphs (a)[,]
AND (b) [and (c)] of this subdivision [and (2) the amount prescribed  in
paragraph  (e) of this subdivision]. For purposes of this paragraph, the
term "qualified homeowners association" means a homeowners  association,
as  such term is defined in subsection (c) of section five hundred twen-
ty-eight of the internal revenue code without regard to subparagraph (E)
of paragraph one of such subsection (relating to elections to  be  taxed
pursuant  to  such section), which has no homeowners association taxable
income, as such term is defined  in  subsection  (d)  of  such  section.
Provided,  however, that in the case of a small business taxpayer (other
than a New York S corporation) as  defined  in  paragraph  (f)  of  this
subdivision, FOR TAXABLE YEARS BEGINNING BEFORE JANUARY FIRST, TWO THOU-
SAND  SIXTEEN,  if the amount prescribed in such paragraph (b) is higher
than the amount prescribed in such paragraph (a) solely by reason of the
application of the rate applicable to  small  business  taxpayers,  then
with  respect  to  such  taxpayer  the  tax  referred to in the previous
sentence shall be [the sum of (1) the highest]  HIGHER  of  the  amounts
prescribed in paragraphs (a)[, (c)] and (d) of this subdivision [and (2)
the amount prescribed in paragraph (e) of this subdivision].
  (a)  [Entire  net]  BUSINESS income base. [For taxable years beginning
before July first, nineteen hundred ninety-nine, the  amount  prescribed
by  this  paragraph shall be computed at the rate of nine percent of the
taxpayer's entire net income base. For  taxable  years  beginning  after
June  thirtieth, nineteen hundred ninety-nine and before July first, two
thousand, the amount prescribed by this paragraph shall be  computed  at
the  rate  of  eight  and  one-half percent of the taxpayer's entire net
income base. For taxable years beginning after June thirtieth, two thou-
sand and before July first, two thousand one, the amount  prescribed  by

S. 6359                            42                            A. 8559

this  paragraph  shall  be  computed at the rate of eight percent of the
taxpayer's entire net income base. For  taxable  years  beginning  after
June  thirtieth, two thousand one and before January first, two thousand
seven,  the amount prescribed by this paragraph shall be computed at the
rate of seven and one-half percent of the taxpayer's entire  net  income
base.]  For  taxable years beginning [on or after] BEFORE January first,
two thousand [seven] SIXTEEN, the amount prescribed  by  this  paragraph
shall  be  computed  at  the  rate of seven and one-tenth percent of the
taxpayer's [entire net] BUSINESS income base. FOR TAXABLE  YEARS  BEGIN-
NING  ON  OR  AFTER  JANUARY  FIRST,  TWO  THOUSAND  SIXTEEN, THE AMOUNT
PRESCRIBED BY THIS PARAGRAPH SHALL BE SIX AND ONE-HALF  PERCENT  OF  THE
TAXPAYER'S  BUSINESS  INCOME  BASE. The taxpayer's [entire net] BUSINESS
income base shall mean the portion of the taxpayer's [entire net]  BUSI-
NESS income allocated within the state as hereinafter provided[, subject
to  any  modification  required by paragraphs (d) and (e) of subdivision
three of this section]. However, in the case of a small business taxpay-
er, as  defined  in  paragraph  (f)  of  this  subdivision,  the  amount
prescribed  by this paragraph shall be computed pursuant to subparagraph
(iv) of this paragraph and in the case of a manufacturer, as defined  in
subparagraph (vi) of this paragraph, the amount prescribed by this para-
graph shall be computed pursuant to subparagraph (vi) of this paragraph.
  [(i)  if the entire net income base is not more than two hundred thou-
sand dollars, (1) for taxable years beginning before July  first,  nine-
teen  hundred  ninety-nine,  the  amount  shall  be eight percent of the
entire net income base; (2) for taxable years beginning after June thir-
tieth, nineteen hundred ninety-nine and before July first, two  thousand
three,  the amount shall be seven and one-half percent of the entire net
income base; and (3) for taxable years beginning after  June  thirtieth,
two  thousand  three  and  before  January first, two thousand five, the
amount shall be 6.85 percent of the entire net income base;
  (ii) if the entire net income base is more than two  hundred  thousand
dollars  but not over two hundred ninety thousand dollars, (1) for taxa-
ble years beginning before July first, nineteen hundred ninety-nine, the
amount shall be the sum  of  (a)  sixteen  thousand  dollars,  (b)  nine
percent  of  the  excess  of the entire net income base over two hundred
thousand dollars and (c) five percent of the excess of  the  entire  net
income  base  over  two  hundred fifty thousand dollars; (2) for taxable
years beginning after June thirtieth, nineteen hundred  ninety-nine  and
before  July  first,  two  thousand,  the amount shall be the sum of (a)
fifteen thousand dollars, (b) eight and one-half percent of  the  excess
of  the entire net income base over two hundred thousand dollars and (c)
five percent of the excess of  the  entire  net  income  base  over  two
hundred  fifty  thousand  dollars; (3) for taxable years beginning after
June thirtieth, two thousand and before July first,  two  thousand  one,
the  amount  shall be the sum of (a) fifteen thousand dollars, (b) eight
percent of the excess of the entire net income  base  over  two  hundred
thousand  dollars  and (c) two and one-half percent of the excess of the
entire net income base over two hundred fifty thousand dollars; (4)  for
taxable  years  beginning  after  June  thirtieth,  two thousand one and
before July first, two thousand three, the amount  shall  be  seven  and
one-half  percent  of  the  entire  net income base; and (5) for taxable
years beginning after June thirtieth,  two  thousand  three  and  before
January  first,  two  thousand  five, the amount shall be the sum of (a)
thirteen thousand seven hundred dollars, (b) 7.5 percent of  the  excess
of  the entire net income base over two hundred thousand dollars and (c)

S. 6359                            43                            A. 8559

3.25 percent of the excess of  the  entire  net  income  base  over  two
hundred fifty thousand dollars;
  (iii) for taxable years beginning on or after January first, two thou-
sand  five  and  ending before January first, two thousand seven, if the
entire net income base is not more  than  two  hundred  ninety  thousand
dollars  the  amount shall be six and one-half percent of the entire net
income base; if the entire net income base  is  more  than  two  hundred
ninety  thousand  dollars  but  not  over  three hundred ninety thousand
dollars the amount shall be the  sum  of  (1)  eighteen  thousand  eight
hundred  fifty  dollars, (2) seven and one-half percent of the excess of
the entire net income base over two hundred ninety thousand dollars  but
not  over  three  hundred ninety thousand dollars and (3) seven and one-
quarter percent of the excess of the entire net income base  over  three
hundred  fifty  thousand dollars but not over three hundred ninety thou-
sand dollars;]
  (iv) for taxable years beginning [on or after] BEFORE  January  first,
two  thousand  [seven] SIXTEEN, if the [entire net] BUSINESS income base
is not more than two hundred ninety thousand dollars the amount shall be
six and one-half percent of the [entire net] BUSINESS  income  base;  if
the  [entire  net]  BUSINESS income base is more than two hundred ninety
thousand dollars but not over three hundred ninety thousand dollars  the
amount  shall  be  the  sum of (1) eighteen thousand eight hundred fifty
dollars, (2) seven and one-tenth percent of the excess  of  the  [entire
net]  BUSINESS  income base over two hundred ninety thousand dollars but
not over three hundred ninety thousand dollars and (3) four and  thirty-
five  hundredths  percent  of  the  excess  of the [entire net] BUSINESS
income base over three hundred fifty thousand dollars but not over three
hundred ninety thousand dollars;
  (v) if the taxable period to which [subparagraphs  (i),  (ii),  (iii),
and]  SUBPARAGRAPH  (iv)  of this paragraph [apply] APPLIES is less than
twelve months, the amount prescribed by this paragraph shall be computed
as follows:
  (A) Multiply the [entire net] BUSINESS income base for  such  taxpayer
by twelve;
  (B)  Divide  the result obtained in (A) by the number of months in the
taxable year;
  (C) Compute an amount pursuant to [subparagraphs (i) and (ii)] SUBPAR-
AGRAPH (IV) as if the result obtained in (B) were the taxpayer's [entire
net] BUSINESS income base;
  (D) Multiply the result obtained in (C) by the number of months in the
taxpayer's taxable year;
  (E) Divide the result obtained in (D) by twelve.
  (vi) except as otherwise provided in this subparagraph or subparagraph
(vii) of this paragraph, for taxable years beginning on or after January
thirty-first, two thousand seven, the amount prescribed  by  this  para-
graph  for  a  taxpayer  which  is a qualified New York manufacturer, as
defined in subdivision fifteen of section  two  hundred  eight  of  this
article, shall be computed at the rate of six and one-half (6.5) percent
of  the taxpayer's [entire net] BUSINESS income base. [For taxable years
beginning on or after January first,  two  thousand  twelve  and  before
January first, two thousand fifteen, the amount prescribed by this para-
graph for a taxpayer which is an eligible qualified New York manufactur-
er shall be computed at the rate of three and one-quarter (3.25) percent
of the taxpayer's entire net income base.  The commissioner shall estab-
lish  guidelines  and  criteria  that  specify  requirements  by which a
manufacturer may  be  classified  as  an  eligible  qualified  New  York

S. 6359                            44                            A. 8559

manufacturer. Criteria may include but not be limited to factors such as
regional unemployment, the economic impact that manufacturing has on the
surrounding  community,  population decline within the region and median
income within the region in which the manufacturer is located. In estab-
lishing  these  guidelines and criteria, the commissioner shall endeavor
that the total annual cost of the lower rates shall not  exceed  twenty-
five million dollars.]
  For  a  qualified  New  York  manufacturer,  as defined in subdivision
fifteen of section two hundred eight of this article, the rate at  which
the  tax  is  computed in effect for taxable years beginning on or after
January first, two thousand thirteen and before January first, two thou-
sand fourteen for qualified New York manufacturers shall be  reduced  by
nine  and  two-tenths  percent  for taxable years commencing on or after
January first, two thousand fourteen and before January first, two thou-
sand fifteen, twelve and three-tenths percent for taxable years commenc-
ing on or after January first, two thousand fifteen and  before  January
first, two thousand sixteen, fifteen and four-tenths percent for taxable
years  commencing  on  or  after January first, two thousand sixteen and
before January first, two thousand eighteen, and twenty-five percent for
taxable years beginning on or after January first,  two  thousand  eigh-
teen.
  (vii)  For a qualified New York manufacturer that has an apportionment
factor for purposes of  the  metropolitan  transportation  business  tax
surcharge  computed  pursuant  to subdivision two of section two hundred
nine-B of this article equal to zero for the taxable  year,  the  amount
prescribed  by  this  paragraph  for taxable years beginning on or after
January first, two thousand fourteen shall be computed at  the  rate  of
zero percent of the taxpayer's entire net income base.
  (VIII)  IN  COMPUTING  THE  BUSINESS INCOME BASE, A NET OPERATING LOSS
DEDUCTION SHALL BE ALLOWED. A NET OPERATING LOSS DEDUCTION IS THE AMOUNT
OF NET OPERATING LOSS OR LOSSES FROM ONE OR MORE TAXABLE YEARS THAT  ARE
CARRIED FORWARD TO A PARTICULAR INCOME YEAR. A NET OPERATING LOSS IS THE
AMOUNT  OF  A BUSINESS LOSS INCURRED IN A PARTICULAR TAX YEAR MULTIPLIED
BY THE APPORTIONMENT FACTOR FOR THAT YEAR AS  DETERMINED  UNDER  SECTION
TWO  HUNDRED  TEN-A OF THIS ARTICLE. THE MAXIMUM NET OPERATING DEDUCTION
THAT IS ALLOWED IN A TAXABLE YEAR IS THE AMOUNT THAT REDUCES THE TAXPAY-
ER'S TAX ON ALLOCATED BUSINESS INCOME TO THE HIGHER OF THE  TAX  ON  THE
CAPITAL  BASE  OR  THE FIXED DOLLAR MINIMUM. SUCH DEDUCTION AND LOSS ARE
DETERMINED IN ACCORDANCE WITH THE FOLLOWING:
  (1) SUCH NET OPERATING LOSS DEDUCTION IS NOT  LIMITED  TO  THE  AMOUNT
ALLOWED  UNDER  SECTION  ONE HUNDRED SEVENTY-TWO OF THE INTERNAL REVENUE
CODE OR THE AMOUNT THAT WOULD HAVE BEEN ALLOWED IF THE TAXPAYER HAD  NOT
MADE  AN  ELECTION  UNDER  SUBCHAPTER  S  OF CHAPTER ONE OF THE INTERNAL
REVENUE CODE.
  (2) SUCH NET OPERATING LOSS DEDUCTION SHALL NOT INCLUDE ANY NET  OPER-
ATING  LOSS  INCURRED DURING ANY TAXABLE YEAR BEGINNING PRIOR TO JANUARY
FIRST, TWO THOUSAND FIFTEEN, OR DURING ANY TAXABLE  YEAR  IN  WHICH  THE
TAXPAYER WAS NOT SUBJECT TO THE TAX IMPOSED BY THIS ARTICLE.
  (3) A TAXPAYER THAT FILES AS PART OF A FEDERAL CONSOLIDATED RETURN BUT
ON  A  SEPARATE  BASIS  FOR  PURPOSES  OF  THIS ARTICLE MUST COMPUTE ITS
DEDUCTION AND LOSS AS IF IT WERE FILING ON A SEPARATE BASIS FOR  FEDERAL
INCOME TAX PURPOSES.
  (4) A NET OPERATING LOSS MUST BE CARRIED FORWARD TO EACH OF THE TWENTY
TAXABLE  YEARS  FOLLOWING  THE TAXABLE YEAR OF THE LOSS. NO CARRYBACK OF
THE NET OPERATING LOSS IS ALLOWED. A TAXPAYER MUST APPLY BOTH  OF  THESE
LIMITATIONS IN COMPUTING SUCH NET OPERATING LOSS DEDUCTION.

S. 6359                            45                            A. 8559

  (5)  SUCH NET OPERATING LOSS DEDUCTION SHALL NOT INCLUDE ANY NET OPER-
ATING LOSS INCURRED DURING A NEW YORK S YEAR; PROVIDED, HOWEVER,  A  NEW
YORK  S YEAR MUST BE TREATED AS A TAXABLE YEAR FOR PURPOSES OF DETERMIN-
ING THE NUMBER OF TAXABLE YEARS TO WHICH A NET  OPERATING  LOSS  MAY  BE
CARRIED FORWARD.
  (6)  WHERE  THERE  ARE  TWO OR MORE ALLOCATED NET OPERATING LOSSES, OR
PORTIONS THEREOF, CARRIED FORWARD TO BE DEDUCTED IN ONE  PARTICULAR  TAX
YEAR  FROM  ALLOCATED  BUSINESS  INCOME,  THE  EARLIEST  ALLOCATED  LOSS
INCURRED MUST BE APPLIED FIRST.
  (b) Capital base. (1) The [amount prescribed  by  this  paragraph  for
taxable  years  beginning before January first, two thousand eight shall
be computed at .178 percent for each  dollar  of  the  taxpayer's  total
business and investment capital, or the portion thereof allocated within
the  state  as  hereinafter  provided. For taxable years beginning on or
after January first, two thousand eight, the] amount prescribed by  this
paragraph  shall  be  computed  at .15  percent  for  each dollar of the
taxpayer's total business [and investment] capital, or the portion ther-
eof allocated within the state as hereinafter provided. However, in  the
case  of  a  cooperative  housing corporation as defined in the internal
revenue code, the applicable rate shall be .04 percent.    In  no  event
shall the amount prescribed by this paragraph exceed three hundred fifty
thousand  dollars for qualified New York manufacturers and for all other
taxpayers [ten] FIVE million dollars [for taxable years beginning on  or
after  January  first,  two thousand eight but before January first, two
thousand eleven and one million dollars for taxable years  beginning  on
or after January first, two thousand eleven].
  (2)  For  a qualified New York manufacturer, as defined in subdivision
fifteen of section two hundred eight of this article, the rate at  which
the  tax  is  computed in effect for taxable years beginning on or after
January first, two thousand thirteen and before January first, two thou-
sand fourteen shall be reduced by nine and two-tenths percent for  taxa-
ble  years  commencing  on or after January first, two thousand fourteen
and before January first, two thousand fifteen, twelve and  three-tenths
percent  for  taxable  years  commencing  on or after January first, two
thousand fifteen and before January first, two thousand sixteen, fifteen
and four-tenths percent for taxable years commencing on or after January
first, two thousand sixteen and before January first, two thousand eigh-
teen, and twenty-five percent for taxable years beginning  on  or  after
January first, two thousand eighteen.
  [(c)  Minimum  taxable  income  bases. (i) For taxable years beginning
after nineteen hundred eighty-six and before  nineteen  hundred  eighty-
nine,  the  amount prescribed by this paragraph shall be computed at the
rate of three  and  one-half  percent  of  the  taxpayer's  pre-nineteen
hundred  ninety minimum taxable income base. For taxable years beginning
in nineteen hundred eighty-nine, the amount prescribed by this paragraph
shall be computed at the rate of five percent  of  the  taxpayer's  pre-
nineteen  hundred ninety minimum taxable income base. A "taxpayer's pre-
nineteen hundred ninety minimum taxable  income  base"  shall  mean  the
portion  of  the taxpayer's entire net income allocated within the state
as hereinafter provided, subject to any modification required  by  para-
graphs (d) and (e) of subdivision three of this section;
  (ii)  (A)  For  taxable years beginning on or after January first, two
thousand seven,  the  amount  prescribed  by  this  paragraph  shall  be
computed at the rate of one and one-half percent of the taxpayer's mini-
mum  taxable  income  base. The "taxpayer's minimum taxable income base"
shall mean the portion of the taxpayer's minimum  taxable  income  allo-

S. 6359                            46                            A. 8559

cated within the state as hereinafter provided, subject to any modifica-
tions  required  by  paragraphs (d) and (e) of subdivision three of this
section.
  (B)  For  taxable years beginning on or after January first, two thou-
sand twelve and before January first, two thousand fifteen,  the  amount
prescribed by this paragraph for an eligible qualified New York manufac-
turer  shall  be  computed  at the rate of seventy-five hundredths (.75)
percent of the taxpayer's minimum taxable income base. For  purposes  of
this  clause,  the term "eligible qualified New York manufacturer" shall
have the same meaning as in subparagraph (vi) of paragraph (a)  of  this
subdivision.
  (iii)  For  a  qualified New York manufacturer, as defined in subpara-
graph (vi) of paragraph (a) of this subdivision, the rate at  which  the
tax  is computed in effect for taxable years beginning on or after Janu-
ary first, two thousand thirteen and before January first, two  thousand
fourteen  for  qualified New York manufacturers shall be reduced by nine
and two-tenths percent for taxable years commencing on or after  January
first,  two  thousand  fourteen  and  before January first, two thousand
fifteen, twelve and three-tenths percent for taxable years commencing on
or after January first, two thousand fifteen and before  January  first,
two  thousand sixteen, fifteen and four-tenths percent for taxable years
commencing on or after January first, two thousand  sixteen  and  before
January  first, two thousand eighteen, and twenty-five percent for taxa-
ble years beginning on or after January first, two thousand eighteen.]
  (d) Fixed dollar minimum. (1) The [amount prescribed by this paragraph
shall be for a taxpayer which during the taxable year has:
  (A) a gross payroll of six million two hundred fifty thousand  dollars
or more, one thousand five hundred dollars;
  (B)  a  gross payroll of less than six million two hundred fifty thou-
sand dollars but more than one million dollars, four hundred twenty-five
dollars;
  (C) a gross payroll of no more than one million dollars but more  than
five hundred thousand dollars, three hundred twenty-five dollars;
  (D)  a gross payroll of no more than five hundred thousand dollars but
more than two hundred fifty thousand dollars,  two  hundred  twenty-five
dollars;
  (E)  a  gross  payroll  of  two hundred fifty thousand dollars or less
(except as prescribed in clause (F) of this subparagraph),  one  hundred
dollars;
  (F)  a  gross  payroll  of  one  thousand  dollars or less, with total
receipts within and without this state of one thousand dollars or  less,
and the average value of the assets of which are one thousand dollars or
less, eight hundred dollars.
  (2) For purposes of this paragraph:
  (A)  gross  payroll shall be the same as the total wages, salaries and
other personal service compensation of  all  the  taxpayer's  employees,
within and without this state, as defined in subparagraph three of para-
graph  (a)  of  subdivision  three  of this section, except that general
executive officers shall not be excluded.
  (B) total receipts shall be the same as receipts  within  and  without
this  state  as defined in subparagraph two of paragraph (a) of subdivi-
sion three of this section.
  (C) average value of the assets shall be the  same  as  prescribed  by
subdivision two of this section without reduction for liabilities.
  (3)  If  the  taxable  year  is  less  than  twelve months, the amount
prescribed by this paragraph shall be reduced by twenty-five percent  if

S. 6359                            47                            A. 8559

the  period  for  which  the taxpayer is subject to tax is more than six
months but not more than nine months and by fifty percent if the  period
for  which  the  taxpayer is subject to tax is not more than six months.
Provided,  however,  that in determining the amount of gross payroll and
total receipts for purposes of subparagraph one of this paragraph, where
the taxable year is less than twelve months, the amount of each shall be
determined by dividing the amount of each with respect  to  the  taxable
year  by  the  number of months in such taxable year and multiplying the
result by twelve. If the taxable year is less than  twelve  months,  the
amount  of  New  York receipts for purposes of subparagraph four of this
paragraph is determined by dividing the amount of the receipts  for  the
taxable year by the number of months in the taxable year and multiplying
the result by twelve.
  (4)  Notwithstanding  subparagraphs one and two of this paragraph, for
taxable years beginning on or after January first, two  thousand  eight,
the]  amount  prescribed  by  this paragraph for New York S corporations
will be determined in accordance with the following table:

If New York receipts are:                The fixed dollar minimum tax is:
 not more than $100,000                               $   25
 more than $100,000 but not over $250,000             $   50
 more than $250,000 but not over $500,000             $  175
 more than $500,000 but not over $1,000,000           $  300
 more than $1,000,000 but not over $5,000,000         $1,000
 more than $5,000,000 but not over $25,000,000        $3,000
 Over $25,000,000                                     $4,500

Otherwise the amount prescribed by this paragraph will be determined  in
accordance with the following table:
PROVIDED  FURTHER,  THE AMOUNT PRESCRIBED BY THIS PARAGRAPH FOR A QUALI-
FIED NEW YORK MANUFACTURER, AS DEFINED IN SUBDIVISION FIFTEEN OF SECTION
TWO HUNDRED EIGHT OF THIS ARTICLE, WILL BE DETERMINED IN ACCORDANCE WITH
THE FOLLOWING TABLES:
FOR TAX YEARS BEGINNING ON OR AFTER JANUARY 1, 2014 AND  BEFORE  JANUARY
1, 2015:

IF NEW YORK RECEIPTS ARE:                THE FIXED DOLLAR MINIMUM TAX IS:
 NOT MORE THAN $100,000                               $   23
 MORE THAN $100,000 BUT NOT OVER $250,000             $   68
 MORE THAN $250,000 BUT NOT OVER $500,000             $  159
 MORE THAN $500,000 BUT NOT OVER $1,000,000           $  454
 MORE THAN $1,000,000 BUT NOT OVER $5,000,000         $1,362
 MORE THAN $5,000,000 BUT NOT OVER $25,000,000        $3,178
 OVER $25,000,000                                     $4,500

FOR  TAX  YEARS BEGINNING ON OR AFTER JANUARY 1, 2015 AND BEFORE JANUARY
1, 2016:

IF NEW YORK RECEIPTS ARE:                THE FIXED DOLLAR MINIMUM TAX IS:
 NOT MORE THAN $100,000                               $   22
 MORE THAN $100,000 BUT NOT OVER $250,000             $   66
 MORE THAN $250,000 BUT NOT OVER $500,000             $  153
 MORE THAN $500,000 BUT NOT OVER $1,000,000           $  439
 MORE THAN $1,000,000 BUT NOT OVER $5,000,000         $1,316
 MORE THAN $5,000,000 BUT NOT OVER $25,000,000        $3,070
 OVER $25,000,000                                     $4,385

S. 6359                            48                            A. 8559

FOR TAX YEARS BEGINNING ON OR AFTER JANUARY 1, 2016 AND  BEFORE  JANUARY
1, 2018:

IF NEW YORK RECEIPTS ARE:                THE FIXED DOLLAR MINIMUM TAX IS:
 NOT MORE THAN $100,000                               $   21
 MORE THAN $100,000 BUT NOT OVER $250,000             $   63
 MORE THAN $250,000 BUT NOT OVER $500,000             $  148
 MORE THAN $500,000 BUT NOT OVER $1,000,000           $  423
 MORE THAN $1,000,000 BUT NOT OVER $5,000,000         $1,269
 MORE THAN $5,000,000 BUT NOT OVER $25,000,000        $2,961
 OVER $25,000,000                                     $4,230

FOR TAX YEARS BEGINNING ON OR AFTER JANUARY 1, 2018:

IF NEW YORK RECEIPTS ARE:                THE FIXED DOLLAR MINIMUM TAX IS:
 NOT MORE THAN $100,000                               $   19
 MORE THAN $100,000 BUT NOT OVER $250,000             $   56
 MORE THAN $250,000 BUT NOT OVER $500,000             $  131
 MORE THAN $500,000 BUT NOT OVER $1,000,000           $  375
 MORE THAN $1,000,000 BUT NOT OVER $5,000,000         $1,125
 MORE THAN $5,000,000 BUT NOT OVER $25,000,000        $2,625
 OVER $25,000,000                                     $3,750

OTHERWISE  THE AMOUNT PRESCRIBED BY THIS PARAGRAPH WILL BE DETERMINED IN
ACCORDANCE WITH THE FOLLOWING TABLE:

If New York receipts are:                The fixed dollar minimum tax is:
 not more than $100,000                               $   25
 more than $100,000 but not over $250,000             $   75
 more than $250,000 but not over $500,000             $  175
 more than $500,000 but not over $1,000,000           $  500
 more than $1,000,000 but not over $5,000,000         $1,500
 more than $5,000,000 but not over $25,000,000        $3,500
 [Over] $25,000,000 BUT NOT OVER $50,000,000          $5,000
 MORE THAN $50,000,000 BUT NOT OVER $100,000,000      $10,000
 MORE THAN $100,000,000 BUT NOT OVER $250,000,000     $20,000
 MORE THAN $250,000,000 BUT NOT OVER $500,000,000     50,000
 MORE THAN $500,000,000 BUT NOT OVER $1,000,000,000   $100,000
 OVER $1,000,000,000                                  $200,000

For purposes of this paragraph,  New  York  receipts  are  the  receipts
[computed in accordance with subparagraph two of paragraph (a) of subdi-
vision  three  of  this]  INCLUDED IN THE NUMERATOR OF THE APPORTIONMENT
FACTOR DETERMINED UNDER section TWO HUNDRED TEN-A for the taxable year.
  (2) IF THE TAXABLE YEAR IS LESS THAN TWELVE MONTHS, THE AMOUNT OF  NEW
YORK  RECEIPTS  IS DETERMINED BY DIVIDING THE AMOUNT OF THE RECEIPTS FOR
THE TAXABLE YEAR BY THE NUMBER OF MONTHS IN THE TAXABLE YEAR AND  MULTI-
PLYING  THE RESULT BY TWELVE. IN THE CASE OF A TERMINATION YEAR OF A NEW
YORK S CORPORATION, THE SUM OF THE TAX COMPUTED UNDER THIS PARAGRAPH FOR
THE S SHORT YEAR AND FOR THE C SHORT YEAR SHALL NOT  BE  LESS  THAN  THE
AMOUNT  COMPUTED  UNDER  THIS PARAGRAPH AS IF THE CORPORATION WERE A NEW
YORK C CORPORATION FOR THE ENTIRE TAXABLE YEAR.
  [(5) For taxable years beginning on or after January first, two  thou-
sand  twelve and before January first, two thousand fifteen, the amounts
prescribed in subparagraphs one and four of this paragraph as the  fixed
dollar minimum tax for an eligible qualified New York manufacturer shall

S. 6359                            49                            A. 8559

be  one-half  of the amounts stated in those subparagraphs. For purposes
of this subparagraph, the term "eligible qualified New York  manufactur-
er" shall have the same meaning as in subparagraph (vi) of paragraph (a)
of this subdivision.
  (6)  For a qualified New York manufacturer, as defined in subparagraph
(vi) of paragraph (a) of this subdivision,  the  amounts  prescribed  in
subparagraphs one and four of this paragraph in effect for taxable years
beginning  on  or  after January first, two thousand thirteen and before
January first, two thousand fourteen for qualified New York  manufactur-
ers  shall  be  reduced by nine and two-tenths percent for taxable years
commencing on or after January first, two thousand fourteen  and  before
January first, two thousand fifteen, twelve and three-tenths percent for
taxable years commencing on or after January first, two thousand fifteen
and  before January first, two thousand sixteen, fifteen and four-tenths
percent for taxable years commencing on  or  after  January  first,  two
thousand  sixteen  and  before January first, two thousand eighteen, and
twenty-five percent for taxable years  beginning  on  or  after  January
first, two thousand eighteen.
  (e)  Subsidiary  capital base. (1) The amount prescribed by this para-
graph shall be computed at the rate of nine-tenths of a  mill  for  each
dollar  of  the  portion  of the taxpayer's subsidiary capital allocated
within the state as hereinafter provided.
  (2) For purposes of this paragraph,  the  amount  of  such  subsidiary
capital,  prior  to  allocation,  shall  be  reduced  by  the applicable
percentage of the taxpayer's (i) investments in the stock  of,  and  any
indebtedness from, subsidiaries subject to tax under section one hundred
eighty-six  of this chapter (but only to the extent such indebtedness is
included in subsidiary capital), and (ii) investments in the  stock  of,
and  any  indebtedness  from,  subsidiaries subject to tax under article
thirty-two or thirty-three of this chapter (but only to the extent  such
indebtedness  is included in subsidiary capital). For purposes of clause
(i) of this subparagraph, the  applicable  percentage  shall  be  thirty
percent  for  taxable  years  beginning in two thousand, and one hundred
percent for taxable years beginning after two thousand. For purposes  of
clause (ii) of this subparagraph, the applicable percentage shall be one
hundred percent for taxable years beginning after nineteen hundred nine-
ty-nine.]
  (f)  For  purposes of this section, the term "small business taxpayer"
shall mean a taxpayer (i) which has an entire net  income  of  not  more
than  three  hundred  ninety thousand dollars for the taxable year; (ii)
[which constitutes a small business as defined in section 1244(c)(3)  of
internal revenue code (without regard to the second sentence of subpara-
graph (A) thereof) as of the last day of the taxable year] THE AGGREGATE
AMOUNT  OF  MONEY  AND  OTHER  PROPERTY  RECEIVED BY THE CORPORATION FOR
STOCK, AS A CONTRIBUTION TO CAPITAL, AND AS PAID-IN  SURPLUS,  DOES  NOT
EXCEED  ONE  MILLION DOLLARS; [and] (iii) which is not part of an affil-
iated group, as defined in section 1504 of the  internal  revenue  code,
unless  such  group,  if  it  had filed a report under this article on a
combined basis, would have itself qualified as a "small business taxpay-
er" pursuant to this subdivision; AND (IV) WHICH HAS AN  AVERAGE  NUMBER
OF INDIVIDUALS, EXCLUDING GENERAL EXECUTIVE OFFICERS, EMPLOYED FULL-TIME
IN  THE  STATE  DURING THE TAXABLE YEAR OF ONE HUNDRED OR FEWER.  If the
taxable period to which subparagraph (i) of this  paragraph  applies  is
less than twelve months, entire net income under such subparagraph shall
be  placed  on  an  annual basis by multiplying the entire net income by
twelve and dividing the result by the number of months  in  the  period.

S. 6359                            50                            A. 8559

FOR  PURPOSES  OF  SUBPARAGRAPH (II) OF THIS PARAGRAPH, THE AMOUNT TAKEN
INTO ACCOUNT WITH RESPECT TO ANY PROPERTY OTHER THAN MONEY SHALL BE  THE
AMOUNT  EQUAL  TO THE ADJUSTED BASIS TO THE CORPORATION OF SUCH PROPERTY
FOR DETERMINING GAIN, REDUCED BY ANY LIABILITY TO WHICH THE PROPERTY WAS
SUBJECT OR WHICH WAS ASSUMED BY THE CORPORATION. THE DETERMINATION UNDER
THE  PRECEDING  SENTENCE  SHALL  BE MADE AS OF THE TIME THE PROPERTY WAS
RECEIVED BY THE CORPORATION. FOR PURPOSES OF SUBPARAGRAPH (III) OF  THIS
SECTION,  "AVERAGE  NUMBER  OF  INDIVIDUALS, EXCLUDING GENERAL EXECUTIVE
OFFICERS, EMPLOYED FULL-TIME" SHALL  BE  COMPUTED  BY  ASCERTAINING  THE
NUMBER  OF SUCH INDIVIDUALS EMPLOYED BY THE TAXPAYER ON THE THIRTY-FIRST
DAY OF MARCH, THE THIRTIETH DAY OF JUNE, THE THIRTIETH DAY OF  SEPTEMBER
AND  THE  THIRTY-FIRST DAY OF DECEMBER DURING EACH TAXABLE YEAR OR OTHER
APPLICABLE PERIOD, BY ADDING TOGETHER THE  NUMBER  OF  SUCH  INDIVIDUALS
ASCERTAINED  ON  EACH  OF SUCH DATES AND DIVIDING THE SUM SO OBTAINED BY
THE NUMBER OF SUCH DATES OCCURRING WITHIN SUCH  TAXABLE  YEAR  OR  OTHER
APPLICABLE PERIOD. AN INDIVIDUAL EMPLOYED FULL-TIME MEANS AN EMPLOYEE IN
A  JOB CONSISTING OF AT LEAST THIRTY-FIVE HOURS PER WEEK, OR TWO OR MORE
EMPLOYEES WHO ARE IN JOBS THAT TOGETHER CONSTITUTE THE EQUIVALENT  OF  A
JOB   AT  LEAST  THIRTY-FIVE  HOURS  PER  WEEK  (FULL-TIME  EQUIVALENT).
FULL-TIME EQUIVALENT EMPLOYEES IN THE STATE INCLUDES ALL EMPLOYEES REGU-
LARLY CONNECTED WITH OR WORKING OUT OF AN OFFICE OR PLACE OF BUSINESS OF
THE TAXPAYER WITHIN THE STATE.
  (g) New York S corporations.  (1) General. The  amount  prescribed  by
this  paragraph  shall  be,  in the case of each New York S corporation,
[(i) the higher of the amounts prescribed in paragraphs (a) and  (d)  of
this  subdivision  (other than the amount prescribed in the final clause
of subparagraph one of that paragraph (d)) (ii) reduced by  the  article
twenty-two  tax  equivalent;  provided,  however,  that  the amount thus
determined shall not be less than the lowest of the  amounts  prescribed
in  subparagraph  one  of that paragraph (d) (applying the provisions of
subparagraph three of that paragraph as necessary).  Provided,  however,
notwithstanding any provision of this paragraph, in taxable years begin-
ning  in  two  thousand  three and before two thousand eight, the amount
prescribed by this paragraph shall be the amount prescribed in  subpara-
graph one of that paragraph (d) (applying the provisions of subparagraph
three  of  that  paragraph as necessary) and applying the calculation of
that amount in the case of a termination year as set forth  in  subpara-
graph four of this paragraph as necessary. In taxable years beginning in
two  thousand  eight and thereafter, the amount prescribed by this para-
graph is] the amount prescribed in subparagraph four of  that  paragraph
(d) [(applying the provisions of subparagraph three of that paragraph as
necessary)] and applying the calculation of that amount in the case of a
termination  year as set forth in subparagraph four of this paragraph as
necessary.
  (2) [Article twenty-two tax equivalent. For  taxable  years  beginning
before  July first, nineteen hundred ninety-nine, the article twenty-two
tax equivalent is the amount computed under paragraph (a) of this subdi-
vision by substituting for the rate therein the rate of  7.875  percent.
For taxable years beginning after June thirtieth, nineteen hundred nine-
ty-nine  and before July first, two thousand, the article twenty-two tax
equivalent is the amount computed under paragraph (a) of  this  subdivi-
sion by substituting for the rate therein the rate of 7.525 percent. For
taxable  years  beginning  after June thirtieth, two thousand and before
July first, two thousand one, the article twenty-two tax  equivalent  is
the  amount  computed under paragraph (a) of this subdivision by substi-
tuting for the rate therein the rate of 7.175 percent. For taxable years

S. 6359                            51                            A. 8559

beginning after June thirtieth, two thousand one and before July  first,
two  thousand three, the article twenty-two tax equivalent is the amount
computed under paragraph (a) of this subdivision by substituting for the
rate therein the rate of 6.85 percent. For taxable years beginning after
June  thirtieth,  two  thousand three, the article twenty-two tax equiv-
alent is the amount computed under paragraph (a) of this subdivision  by
substituting for the rate therein the rate of 7.1425 percent.
  (3)  Small  business  taxpayers.  Notwithstanding  the  provisions  of
subparagraphs one and two of this paragraph, in the case of a New York S
corporation which is a small business taxpayer, as defined in  paragraph
(f) of this subdivision, the following provisions shall apply:
  (A)  For  taxable  years beginning before July first, nineteen hundred
ninety-nine,  the  article  twenty-two  tax  equivalent  is  the  amount
computed under paragraph (a) of this subdivision by substituting for the
rate therein the rate of 7.875 percent.
  (B) For taxable years beginning after June thirtieth, nineteen hundred
ninety-nine  and  before  July  first,  two  thousand  three, the amount
computed under paragraph (a) of this  subdivision,  as  referred  to  in
subparagraph  one  of  this paragraph, shall be computed by substituting
for the rate therein the rate of 7.5 percent, and the article twenty-two
tax equivalent under paragraph (a) of this subdivision shall be computed
as follows:
  (i) if the entire net income base is not more than two  hundred  thou-
sand  dollars,  the  article  twenty-two  tax  equivalent  is the amount
computed under paragraph (a) of this subdivision by substituting for the
rate therein the rate of 7.45 percent;
  (ii) if the entire net income base is more than two  hundred  thousand
dollars  but  not  over two hundred ninety thousand dollars, the article
twenty-two tax equivalent shall be computed as the sum of  (I)  fourteen
thousand  nine  hundred  dollars,  (II)  six  and eighty-five hundredths
percent of the first fifty thousand dollars in excess of the entire  net
income  base  over  two  hundred  thousand  dollars, and (III) three and
eighty-five hundredths percent of the excess, if any, of the entire  net
income base over two hundred fifty thousand dollars.
  (C)  For  taxable  years  beginning after June thirtieth, two thousand
three, the amount computed under paragraph (a) of this  subdivision,  as
referred  to in subparagraph one of this paragraph, shall be computed by
substituting for the rate therein the rate of 7.5 percent, and the arti-
cle twenty-two tax equivalent under paragraph (a)  of  this  subdivision
shall be computed as follows:
  (i)  if  the entire net income base is not more than two hundred thou-
sand dollars, the  article  twenty-two  tax  equivalent  is  the  amount
computed under paragraph (a) of this subdivision by substituting for the
rate therein the rate of 7.4725 percent;
  (ii)  if  the entire net income base is more than two hundred thousand
dollars but not over two hundred ninety thousand  dollars,  the  article
twenty-two  tax  equivalent shall be computed as the sum of (I) fourteen
thousand nine hundred forty-five dollars, (II)  7.1425  percent  of  the
first  fifty  thousand  dollars  in excess of the entire net income base
over two hundred thousand dollars,  and  (III)  5.4925  percent  of  the
excess,  if  any,  of  the entire net income base over two hundred fifty
thousand dollars.
  (4)] Termination year. In the case of a termination year, [the tax for
the S short year shall be computed under this paragraph  without  regard
to  the  fixed  dollar  minimum  tax prescribed in paragraph (d) of this
subdivision, and the tax for the C short year shall  be  computed  under

S. 6359                            52                            A. 8559

the  opening  paragraph  of this subdivision without regard to the fixed
dollar minimum tax prescribed under such paragraph (d), but in no  event
shall]  the  sum  of  the tax for the S short year and the tax for the C
short  year  SHALL  NOT  be less than the fixed dollar minimum tax under
paragraph (d) of this subdivision computed as if the corporation were  a
New York C corporation for the entire taxable year.
  [(h)  For  purposes  of  determining whether a taxpayer is an eligible
qualified New  York  manufacturer  for  purposes  of  the  tax  benefits
provided  in  subparagraph  (vi)  of  paragraph (a) of this subdivision,
subparagraph (ii) of paragraph (c) of this subdivision, and subparagraph
five of paragraph (d) of this subdivision, a taxpayer shall utilize  the
law,  guidelines  and  criteria  in effect on December thirty-first, two
thousand thirteen.]
  S 13. Subdivision 1-c of section 210 of the tax  law,  as  amended  by
chapter  1043  of  the laws of 1981, the opening paragraph and paragraph
(a) as amended by chapter 817 of the laws of 1987, and paragraph (b)  as
amended  by  section  12 of part Y of chapter 63 of the laws of 2000, is
amended to read as follows:
  1-c. The computations specified in paragraph (b) of subdivision one of
this section shall not apply to the first two taxable years of a taxpay-
er which, for one or both such years, is a small  business  [concern.  A
small business concern:
  (a) is  a taxpayer which is a small business corporation as defined in
paragraph three of subsection (c) of section twelve  hundred  forty-four
of  the  internal revenue code (without regard to the second sentence of
subparagraph (A) thereof) as of the last day of the taxable year,
  (b) is not a corporation over fifty percent of the number of shares of
stock of which entitling the holders thereof to vote for the election of
directors or trustees is owned by a taxpayer which (1) is subject to tax
under this article; section one hundred eighty-three, one hundred eight-
y-four or one hundred eighty-five of article nine; article thirty-two or
thirty-three of this chapter, and (2) does not qualify as a small  busi-
ness  corporation  as  defined  in  paragraph three of subsection (c) of
section twelve hundred forty-four of the internal revenue code  (without
regard  to  the  second  sentence of subparagraph (A) thereof) as of the
last day of its taxable year ending within or with the taxable  year  of
the taxpayer,
  (c)  is  not a corporation which is substantially similar in operation
and in ownership to a business entity (or entities) taxable,  or  previ-
ously taxable, under this article; section one hundred eighty-three, one
hundred  eighty-four,  one hundred eighty-five or one hundred eighty-six
of article nine; article thirty-two or  thirty-three  of  this  chapter;
article twenty-three of this chapter or which would have been subject to
tax  under  such  article twenty-three (as such article was in effect on
January first, nineteen hundred eighty) or the  income  (or  losses)  of
which  is  (or was) includable under article twenty-two of this chapter,
and
  (d) at least ninety percent of the assets of such corporation  (valued
at  original  cost)  were  located and employed in this state during the
taxable year and eighty percent of the employees of such corporation (as
ascertained within the meaning and intent of subparagraph three of para-
graph (a)  of  subdivision  three  of  this  section)  were  principally
employed  in  this state during the taxable year] TAXPAYER AS DEFINED IN
PARAGRAPH (F) OF SUBDIVISION ONE OF THIS SECTION.
  S 14. Subdivision 2 of section 210 of the tax law, as amended by chap-
ter 760 of the laws of 1992, is amended to read as follows:

S. 6359                            53                            A. 8559

  2. The amount of [subsidiary capital,] investment capital and business
capital shall each be determined by taking  the  average  value  of  the
assets  included therein (less liabilities deductible therefrom pursuant
to the provisions of subdivisions [four,] five and seven of section  two
hundred eight), and, if the period covered by the report is other than a
period  of  twelve  calendar  months,  by  multiplying such value by the
number of calendar months or major parts thereof included in such  peri-
od,  and  dividing  the product thus obtained by twelve. For purposes of
this subdivision, real  property  and  marketable  securities  shall  be
valued  at  fair  market  value and the value of personal property other
than marketable securities shall be the value thereof shown on the books
and records of  the  taxpayer  in  accordance  with  generally  accepted
accounting principles.
  S  15.  Subdivisions 3, 3-a, 4, 5, 6, 7, 8, 9, 10, 11, 12, 12-A, 12-B,
12-C, 12-D, 12-E, 12-F, 12-G, 13, 14, 15, 16, 17, 18, 19, 20, 21,  21-a,
22,  23,  23-a,  24, 25, 25-a, 26, 26-a, 27, 28, 30, 31, 32, 33, 34, 35,
36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, subdivision 48 as  added
by  section  3  of  LBD number 74039-02-4 and subdivision 48 as added by
section 2 of LBD number 74021-03-4 of section 210 of  the  tax  law  are
REPEALED.
  S  16. The tax law is amended by adding a new section 210-A to read as
follows:
  S 210-A. APPORTIONMENT. 1. GENERAL. BUSINESS INCOME AND CAPITAL  SHALL
BE  APPORTIONED  TO  THE  STATE  BY  THE APPORTIONMENT FACTOR DETERMINED
PURSUANT TO THIS SECTION. THE APPORTIONMENT FACTOR IS A FRACTION, DETER-
MINED BY INCLUDING ONLY THOSE RECEIPTS, NET INCOME, NET GAINS, AND OTHER
ITEMS DESCRIBED IN THIS SECTION THAT ARE INCLUDED IN THE COMPUTATION  OF
THE  TAXPAYER'S  BUSINESS INCOME FOR THE TAXABLE YEAR.  THE NUMERATOR OF
THE APPORTIONMENT FRACTION SHALL BE EQUAL TO THE SUM OF ALL THE  AMOUNTS
REQUIRED  TO  BE INCLUDED IN THE NUMERATOR PURSUANT TO THE PROVISIONS OF
THIS SECTION AND THE DENOMINATOR OF THE APPORTIONMENT FRACTION SHALL  BE
EQUAL  TO  THE  SUM  OF  ALL  THE AMOUNTS REQUIRED TO BE INCLUDED IN THE
DENOMINATOR PURSUANT TO THE PROVISIONS OF THIS SECTION.
  2. SALES OF TANGIBLE PERSONAL PROPERTY AND ELECTRICITY.  (A)  RECEIPTS
FROM  SALES  OF  TANGIBLE  PERSONAL PROPERTY WHERE SHIPMENTS ARE MADE TO
POINTS WITHIN THE STATE OR THE DESTINATION OF THE PROPERTY IS A POINT IN
THE STATE SHALL BE INCLUDED IN THE NUMERATOR OF THE APPORTIONMENT  FRAC-
TION.  RECEIPTS FROM SALES OF TANGIBLE PERSONAL PROPERTY WHERE SHIPMENTS
ARE MADE TO POINTS WITHIN AND WITHOUT THE STATE OR  THE  DESTINATION  IS
WITHIN AND WITHOUT THE STATE SHALL BE INCLUDED IN THE DENOMINATOR OF THE
APPORTIONMENT FRACTION.
  (B)  RECEIPTS FROM SALES OF ELECTRICITY DELIVERED TO POINTS WITHIN THE
STATE SHALL BE INCLUDED IN THE NUMERATOR OF THE APPORTIONMENT  FRACTION.
RECEIPTS  FROM SALES OF ELECTRICITY DELIVERED TO POINTS WITHIN AND WITH-
OUT THE STATE SHALL BE INCLUDED IN THE DENOMINATOR OF THE  APPORTIONMENT
FRACTION.
  (C)  RECEIPTS FROM SALES OF TANGIBLE PERSONAL PROPERTY AND ELECTRICITY
THAT ARE TRADED AS COMMODITIES AS DESCRIBED IN SECTION 475 OF THE INTER-
NAL REVENUE CODE ARE INCLUDED IN THE APPORTIONMENT FRACTION  IN  ACCORD-
ANCE WITH CLAUSE (I) OF SUBPARAGRAPH TWO OF PARAGRAPH (A) OF SUBDIVISION
FIVE OF THIS SECTION.
  3. RENTALS AND ROYALTIES. (A) RECEIPTS FROM RENTALS OF REAL AND TANGI-
BLE  PERSONAL  PROPERTY  LOCATED  WITHIN  THE  STATE ARE INCLUDED IN THE
NUMERATOR OF THE APPORTIONMENT FRACTION. RECEIPTS FROM RENTALS  OF  REAL
AND  TANGIBLE  PERSONAL  PROPERTY  LOCATED  WITHIN AND WITHOUT THE STATE
SHALL BE INCLUDED IN THE DENOMINATOR OF THE APPORTIONMENT FRACTION.

S. 6359                            54                            A. 8559

  (B) RECEIPTS OF ROYALTIES FROM THE USE  OF  PATENTS,  COPYRIGHTS,  AND
SIMILAR  INTANGIBLE  PERSONAL  PROPERTY WITHIN THE STATE ARE INCLUDED IN
THE NUMERATOR OF THE APPORTIONMENT FRACTION. RECEIPTS OF ROYALTIES  FROM
THE USE OF PATENTS, COPYRIGHTS, TRADEMARKS AND SIMILAR INTANGIBLES WITH-
IN  AND  WITHOUT THE STATE ARE INCLUDED IN THE DENOMINATOR OF THE APPOR-
TIONMENT FRACTION.
  (C) RECEIPTS FROM THE SALES OF RIGHTS  FOR  CLOSED-CIRCUIT  AND  CABLE
TELEVISION  TRANSMISSIONS  OF AN EVENT (OTHER THAN EVENTS OCCURRING ON A
REGULARLY SCHEDULED BASIS) TAKING PLACE WITHIN THE STATE AS A RESULT  OF
THE  RENDITION OF SERVICES BY EMPLOYEES OF THE CORPORATION, AS ATHLETES,
ENTERTAINERS OR PERFORMING ARTISTS ARE INCLUDED IN THE NUMERATOR OF  THE
APPORTIONMENT FRACTION TO THE EXTENT THAT SUCH RECEIPTS ARE ATTRIBUTABLE
TO  SUCH  TRANSMISSIONS RECEIVED OR EXHIBITED WITHIN THE STATE. RECEIPTS
FROM ALL SALES OF RIGHTS FOR CLOSED-CIRCUIT AND CABLE TELEVISION  TRANS-
MISSIONS  OF  AN EVENT ARE INCLUDED IN THE DENOMINATOR OF THE APPORTION-
MENT FRACTION.
  4. DIGITAL PRODUCTS. (A) FOR PURPOSES OF DETERMINING THE APPORTIONMENT
FRACTION UNDER THIS SECTION, THE TERM "DIGITAL PRODUCT" MEANS ANY  PROP-
ERTY OR SERVICE, OR COMBINATION THEREOF, OF WHATEVER NATURE DELIVERED TO
THE PURCHASER THROUGH THE USE OF WIRE, CABLE, FIBER-OPTIC, LASER, MICRO-
WAVE,  RADIO WAVE, SATELLITE OR SIMILAR SUCCESSOR MEDIA, OR ANY COMBINA-
TION THEREOF. DIGITAL PRODUCT INCLUDES, BUT IS NOT LIMITED TO, AN  AUDIO
WORK,  AUDIOVISUAL  WORK,  VISUAL  WORK,  BOOK OR LITERARY WORK, GRAPHIC
WORK, GAME, INFORMATION OR ENTERTAINMENT  SERVICE,  STORAGE  OF  DIGITAL
PRODUCTS  AND  COMPUTER  SOFTWARE  BY WHATEVER MEANS DELIVERED. THE TERM
"DELIVERED TO" INCLUDES FURNISHED OR  PROVIDED  TO  OR  ACCESSED  BY.  A
DIGITAL  PRODUCT  DOES NOT INCLUDE LEGAL, MEDICAL, ACCOUNTING, ARCHITEC-
TURAL, RESEARCH, ANALYTICAL, ENGINEERING OR CONSULTING SERVICES PROVIDED
BY THE TAXPAYER.
  (B) RECEIPTS FROM THE SALE OF, LICENCE TO USE, OR GRANTING  OF  REMOTE
ACCESS TO DIGITAL PRODUCTS WITHIN THE STATE, DETERMINED ACCORDING TO THE
HIERARCHY  OF  METHODS  SET  FORTH  IN SUBPARAGRAPHS ONE THROUGH FOUR OF
PARAGRAPH (C) OF THIS SUBDIVISION, SHALL BE INCLUDED IN THE NUMERATOR OF
THE APPORTIONMENT FRACTION. RECEIPTS FROM THE SALE OF, LICENSE  TO  USE,
OR  GRANTING OF REMOTE ACCESS TO DIGITAL PRODUCTS WITHIN AND WITHOUT THE
STATE SHALL BE INCLUDED IN THE DENOMINATOR OF  THE  APPORTIONMENT  FRAC-
TION.  THE  TAXPAYER  MUST  EXERCISE  DUE  DILIGENCE  UNDER  EACH METHOD
DESCRIBED IN PARAGRAPH (C) OF THIS SUBDIVISION BEFORE REJECTING  IT  AND
PROCEEDING  TO  THE  NEXT  METHOD IN THE HIERARCHY. IF THE RECEIPT FOR A
DIGITAL PRODUCT IS COMPRISED OF A COMBINATION OF PROPERTY AND  SERVICES,
IT  CANNOT  BE  DIVIDED INTO SEPARATE COMPONENTS AND IS CONSIDERED TO BE
ONE RECEIPT REGARDLESS OF WHETHER IT IS SEPARATELY  STATED  FOR  BILLING
PURPOSES. THE ENTIRE RECEIPT MUST BE ALLOCATED BY THIS HIERARCHY.
  (C)  HIERARCHY  OF  SOURCING  METHODS. (1) DELIVERY DESTINATION OF THE
DIGITAL PRODUCT. A DIGITAL PRODUCT IS DEEMED DELIVERED WITHIN THE  STATE
IF THE LOCATION FROM WHICH THE PURCHASER OR ITS AUTHORIZED USER ACCESSES
OR  USES  THE DIGITAL PRODUCT IS IN THE STATE. DESTINATION MAY BE DEMON-
STRATED BY INTERNET PROTOCOL ADDRESS OR OTHER SIMILAR OR SUCCESSOR INDI-
CATOR, THE GEOGRAPHIC LOCATION OF THE EQUIPMENT  TO  WHICH  THE  DIGITAL
PRODUCT  IS  DELIVERED OR FROM WHICH THE DIGITAL PRODUCT IS ACCESSED, OR
THE DELIVERY DESTINATION INDICATED ON  A  BILL  OF  LADING  OR  PURCHASE
INVOICE.  A  DIGITAL  PRODUCT  ACCESSED  OR USED BY THE PURCHASER OR ITS
AUTHORIZED USER DURING THE TAXPAYER'S TAXABLE YEAR IN MULTIPLE LOCATIONS
IS DELIVERED WITHIN THE STATE TO THE EXTENT THAT THE DIGITAL PRODUCT  IS
ACCESSED OR USED IN THE STATE;
  (2) BILLING ADDRESS OF THE PURCHASER;

S. 6359                            55                            A. 8559

  (3)  ZIP  CODE  OR  OTHER  GEOGRAPHIC  INDICATOR  OF  THE  PURCHASER'S
LOCATION; OR
  (4) THE APPORTIONMENT FRACTION DETERMINED PURSUANT TO THIS SUBDIVISION
FOR  THE  PRECEDING TAXABLE YEAR, OR, IF THE TAXPAYER WAS NOT SUBJECT TO
TAX IN THE PRECEDING TAXABLE YEAR, THEN THE  APPORTIONMENT  FRACTION  IN
THE  CURRENT TAXABLE YEAR FOR THOSE DIGITAL PRODUCTS THAT CAN BE SOURCED
USING THE HIERARCHY OF SOURCING METHODS  IN  SUBPARAGRAPHS  ONE  THROUGH
THREE OF THIS SUBDIVISION.
  5.  FINANCIAL  TRANSACTIONS.  (A)  FINANCIAL  INSTRUMENTS. A FINANCIAL
INSTRUMENT IS A "QUALIFIED FINANCIAL INSTRUMENT"  IF  IT  IS  MARKED  TO
MARKET  UNDER  SECTION 475 OR SECTION 1256 OF THE INTERNAL REVENUE CODE,
PROVIDED THAT LOANS SECURED BY REAL  PROPERTY  SHALL  NOT  BE  QUALIFIED
FINANCIAL  INSTRUMENTS. A FINANCIAL INSTRUMENT IS A "NONQUALIFIED FINAN-
CIAL INSTRUMENT" IF IT IS NOT A QUALIFIED FINANCIAL INSTRUMENT.
  (1) FIXED PERCENTAGE METHOD FOR QUALIFIED  FINANCIAL  INSTRUMENTS.  IN
DETERMINING  THE  INCLUSION  OF  RECEIPTS  AND  NET GAINS FROM QUALIFIED
FINANCIAL INSTRUMENTS IN THE APPORTIONMENT FRACTION, TAXPAYERS MAY ELECT
TO USE THE FIXED PERCENTAGE METHOD DESCRIBED IN  THIS  SUBPARAGRAPH  FOR
QUALIFIED FINANCIAL INSTRUMENTS. THE ELECTION IS IRREVOCABLE, APPLIES TO
ALL QUALIFIED FINANCIAL INSTRUMENTS, AND MUST BE MADE ON AN ANNUAL BASIS
ON  THE TAXPAYER'S ORIGINAL, TIMELY FILED RETURN. IF THE TAXPAYER ELECTS
THE FIXED PERCENTAGE METHOD, THEN ALL INCOME, GAIN OR LOSS, FROM  QUALI-
FIED FINANCIAL INSTRUMENTS CONSTITUTES BUSINESS INCOME, GAIN OR LOSS. IF
THE  TAXPAYER  DOES  NOT  ELECT TO USE THE FIXED PERCENTAGE METHOD, THEN
RECEIPTS AND NET GAINS ARE INCLUDED IN  THE  APPORTIONMENT  FRACTION  IN
ACCORDANCE  WITH  THE CUSTOMER SOURCING METHOD DESCRIBED IN SUBPARAGRAPH
TWO OF THIS PARAGRAPH. UNDER THE FIXED PERCENTAGE METHOD, EIGHT  PERCENT
OF  ALL NET INCOME (NOT LESS THAN ZERO) FROM QUALIFIED FINANCIAL INSTRU-
MENTS IS INCLUDED IN THE NUMERATOR OF THE  APPORTIONMENT  FRACTION.  ALL
NET  INCOME (NOT LESS THAN ZERO) FROM QUALIFIED FINANCIAL INSTRUMENTS IS
INCLUDED IN THE DENOMINATOR OF THE APPORTIONMENT FRACTION.
  (2) CUSTOMER SOURCING METHOD. RECEIPTS AND NET  GAINS  FROM  QUALIFIED
FINANCIAL  INSTRUMENTS, IN CASES WHERE THE TAXPAYER DID NOT ELECT TO USE
THE FIXED PERCENTAGE METHOD DESCRIBED IN SUBPARAGRAPH ONE OF THIS  PARA-
GRAPH,  AND  FROM NONQUALIFIED FINANCIAL INSTRUMENTS ARE INCLUDED IN THE
APPORTIONMENT  FRACTION  IN  ACCORDANCE  WITH  THIS  SUBPARAGRAPH.   FOR
PURPOSES OF THIS PARAGRAPH, AN INDIVIDUAL IS DEEMED TO BE LOCATED IN THE
STATE  IF  HIS OR HER BILLING ADDRESS IS IN THE STATE. A BUSINESS ENTITY
IS DEEMED TO BE LOCATED IN THE  STATE  IF  ITS  COMMERCIAL  DOMICILE  IS
LOCATED IN THE STATE.
  (A)  LOANS.  (I)  RECEIPTS CONSTITUTING INTEREST FROM LOANS SECURED BY
REAL PROPERTY LOCATED WITHIN THE STATE SHALL BE INCLUDED IN THE  NUMERA-
TOR  OF  THE APPORTIONMENT FRACTION. RECEIPTS CONSTITUTING INTEREST FROM
LOANS SECURED BY REAL PROPERTY LOCATED  WITHIN  AND  WITHOUT  THE  STATE
SHALL BE INCLUDED IN THE DENOMINATOR OF THE APPORTIONMENT FRACTION.
  (II)  RECEIPTS  CONSTITUTING  INTEREST  FROM LOANS NOT SECURED BY REAL
PROPERTY SHALL BE INCLUDED IN THE NUMERATOR OF THE  APPORTIONMENT  FRAC-
TION  IF  THE  BORROWER  IS  LOCATED IN THE STATE. RECEIPTS CONSTITUTING
INTEREST FROM LOANS NOT SECURED BY REAL PROPERTY, WHETHER  THE  BORROWER
IS LOCATED WITHIN OR WITHOUT THE STATE, SHALL BE INCLUDED IN THE DENOMI-
NATOR OF THE APPORTIONMENT FRACTION.
  (III)  NET  GAINS  (NOT LESS THAN ZERO) FROM SALES OF LOANS SECURED BY
REAL PROPERTY ARE INCLUDED IN THE NUMERATOR OF THE  APPORTIONMENT  FRAC-
TION  AS  PROVIDED  IN  THIS SUBCLAUSE. THE AMOUNT OF NET GAINS FROM THE
SALE OF LOANS SECURED BY REAL PROPERTY INCLUDED IN THE NUMERATOR OF  THE
APPORTIONMENT  FRACTION  IS DETERMINED BY MULTIPLYING THE NET GAINS BY A

S. 6359                            56                            A. 8559

FRACTION THE NUMERATOR OF WHICH IS THE AMOUNT  OF  GROSS  PROCEEDS  FROM
SALES OF LOANS SECURED BY REAL PROPERTY LOCATED WITHIN THE STATE AND THE
DENOMINATOR  OF  WHICH IS THE GROSS PROCEEDS FROM SALES OF LOANS SECURED
BY  REAL  PROPERTY WITHIN AND WITHOUT THE STATE. GROSS PROCEEDS SHALL BE
DETERMINED AFTER THE DEDUCTION OF ANY COST INCURRED TO ACQUIRE THE LOANS
BUT SHALL NOT BE LESS THAN ZERO. NET GAINS (NOT  LESS  THAN  ZERO)  FROM
SALES OF LOANS SECURED BY REAL PROPERTY WITHIN AND WITHOUT THE STATE ARE
INCLUDED IN THE DENOMINATOR OF THE APPORTIONMENT FRACTION.
  (IV) NET GAINS (NOT LESS THAN ZERO) FROM SALES OF LOANS NOT SECURED BY
REAL  PROPERTY  ARE INCLUDED IN THE NUMERATOR OF THE APPORTIONMENT FRAC-
TION AS PROVIDED IN THIS SUBCLAUSE. THE AMOUNT OF  NET  GAINS  FROM  THE
SALE  OF LOANS NOT SECURED BY REAL PROPERTY INCLUDED IN THE NUMERATOR OF
THE APPORTIONMENT FRACTION IS DETERMINED BY MULTIPLYING THE NET GAINS BY
A FRACTION, THE NUMERATOR OF WHICH IS THE AMOUNT OF GROSS PROCEEDS  FROM
SALES OF LOANS NOT SECURED BY REAL PROPERTY TO PURCHASERS LOCATED WITHIN
THE  STATE  AND THE DENOMINATOR OF WHICH IS THE AMOUNT OF GROSS RECEIPTS
FROM SALES OF LOANS NOT SECURED BY REAL PROPERTY TO  PURCHASERS  LOCATED
WITHIN  AND  WITHOUT THE STATE. GROSS PROCEEDS SHALL BE DETERMINED AFTER
THE DEDUCTION OF ANY COST INCURRED TO ACQUIRE THE LOANS BUT SHALL NOT BE
LESS THAN ZERO.  NET GAINS (NOT LESS THAN ZERO) FROM SALES OF LOANS  NOT
SECURED  BY  REAL PROPERTY ARE INCLUDED IN THE DENOMINATOR OF THE APPOR-
TIONMENT FRACTION.
  (B) FEDERAL, STATE, AND MUNICIPAL DEBT. RECEIPTS CONSTITUTING INTEREST
AND NET GAINS FROM SALES  OF  DEBT  INSTRUMENTS  ISSUED  BY  THE  UNITED
STATES,  ANY  STATE,  OR  POLITICAL  SUBDIVISION OF A STATE SHALL NOT BE
INCLUDED IN  THE  NUMERATOR  OF  THE  APPORTIONMENT  FRACTION.  RECEIPTS
CONSTITUTING  INTEREST  AND NET GAINS (NOT LESS THAN ZERO) FROM SALES OF
DEBT INSTRUMENTS ISSUED BY THE UNITED STATES AND THE STATE OF  NEW  YORK
OR  ITS  POLITICAL  SUBDIVISIONS SHALL BE INCLUDED IN THE DENOMINATOR OF
THE APPORTIONMENT FRACTION. FIFTY PERCENT OF THE  RECEIPTS  CONSTITUTING
INTEREST  AND  NET GAINS (NOT LESS THAN ZERO) FROM SALES OF DEBT INSTRU-
MENTS ISSUED BY OTHER STATES OR THEIR POLITICAL  SUBDIVISIONS  SHALL  BE
INCLUDED IN THE DENOMINATOR OF THE APPORTIONMENT FRACTION.
  (C) ASSET BACKED SECURITIES. EIGHT PERCENT OF THE INTEREST INCOME FROM
ASSET  BACKED  SECURITIES, INCLUDING SECURITIES ISSUED BY THE GOVERNMENT
NATIONAL MORTGAGE ASSOCIATION  (GNMA),  THE  FEDERAL  NATIONAL  MORTGAGE
ASSOCIATION  (FNMA),  OR  THE  FEDERAL  HOME  LOAN  MORTGAGE CORPORATION
(FHLMC), THE SMALL BUSINESS ADMINISTRATION OR  OTHER  GOVERNMENT  AGENCY
SHALL  BE INCLUDED IN THE NUMERATOR OF THE APPORTIONMENT FRACTION. EIGHT
PERCENT OF THE NET GAINS (NOT LESS THAN ZERO) FROM SALES OF ASSET BACKED
SECURITIES ISSUED BY GNMA, FNMA, OR FHLMC, THE SMALL  BUSINESS  ADMINIS-
TRATION OR OTHER GOVERNMENT AGENCY AND SALES OF OTHER ASSET BACKED SECU-
RITIES THAT ARE SOLD THROUGH A REGISTERED SECURITIES BROKER OR DEALER OR
THROUGH  A  LICENSED  EXCHANGE SHALL BE INCLUDED IN THE NUMERATOR OF THE
APPORTIONMENT FRACTION. THE AMOUNT OF NET GAINS  (NOT  LESS  THAN  ZERO)
FROM SALES OF OTHER ASSET BACKED SECURITIES INCLUDED IN THE NUMERATOR OF
THE  APPORTIONMENT  FRACTION IS DETERMINED BY MULTIPLYING SUCH NET GAINS
BY A FRACTION, THE NUMERATOR OF WHICH IS THE AMOUNT  OF  GROSS  PROCEEDS
FROM  SUCH  SALES TO PURCHASERS LOCATED IN THE STATE AND THE DENOMINATOR
OF WHICH IS THE AMOUNT OF GROSS PROCEEDS FROM SUCH SALES  TO  PURCHASERS
LOCATED  WITHIN  AND  WITHOUT  THE STATE. RECEIPTS CONSTITUTING INTEREST
FROM ASSET BACKED SECURITIES AND NET GAINS (NOT  LESS  THAN  ZERO)  FROM
SALES  OF ASSET BACKED SECURITIES ARE INCLUDED IN THE DENOMINATOR OF THE
APPORTIONMENT FRACTION. GROSS PROCEEDS SHALL  BE  DETERMINED  AFTER  THE
DEDUCTION  OF  ANY  COST TO ACQUIRE THE SECURITIES BUT SHALL NOT BE LESS
THAN ZERO.

S. 6359                            57                            A. 8559

  (D) CORPORATE BONDS. RECEIPTS  CONSTITUTING  INTEREST  FROM  CORPORATE
BONDS ARE INCLUDED IN THE NUMERATOR OF THE APPORTIONMENT FRACTION IF THE
COMMERCIAL  DOMICILE  OF THE ISSUING CORPORATION IS IN THE STATE.  EIGHT
PERCENT OF THE NET GAINS (NOT LESS THAN ZERO) FROM  SALES  OF  CORPORATE
BONDS SOLD THROUGH A REGISTERED SECURITIES BROKER OR DEALER OR THROUGH A
LICENSED  EXCHANGE  IS  INCLUDED  IN  THE NUMERATOR OF THE APPORTIONMENT
FRACTION. THE AMOUNT OF NET GAINS (NOT LESS THAN ZERO) FROM OTHER  SALES
OF  CORPORATE BONDS INCLUDED IN THE NUMERATOR OF THE APPORTIONMENT FRAC-
TION IS DETERMINED BY MULTIPLYING SUCH NET  GAINS  BY  A  FRACTION,  THE
NUMERATOR  OF  WHICH  IS THE AMOUNT OF GROSS PROCEEDS FROM SUCH SALES TO
PURCHASERS LOCATED IN THE STATE AND THE  DENOMINATOR  OF  WHICH  IS  THE
AMOUNT  OF  GROSS  PROCEEDS  FROM SALES TO PURCHASERS LOCATED WITHIN AND
WITHOUT THE STATE. RECEIPTS CONSTITUTING INTEREST FROM CORPORATE  BONDS,
WHETHER THE ISSUING CORPORATION'S COMMERCIAL DOMICILE IS WITHIN OR WITH-
OUT  THE  STATE, AND NET GAINS (NOT LESS THAN ZERO) FROM SALES OF CORPO-
RATE BONDS TO PURCHASERS WITHIN AND WITHOUT THE STATE  ARE  INCLUDED  IN
THE  DENOMINATOR  OF THE APPORTIONMENT FRACTION. GROSS PROCEEDS SHALL BE
DETERMINED AFTER THE DEDUCTION OF ANY COST  TO  ACQUIRE  THE  BONDS  BUT
SHALL NOT BE LESS THAN ZERO.
  (E) REVERSE REPURCHASE AGREEMENTS AND SECURITIES BORROWING AGREEMENTS.
EIGHT  PERCENT  OF NET INTEREST INCOME (NOT LESS THAN ZERO) FROM REVERSE
REPURCHASE AGREEMENTS  AND  SECURITIES  BORROWING  AGREEMENTS  SHALL  BE
INCLUDED  IN  THE  NUMERATOR OF THE APPORTIONMENT FRACTION. NET INTEREST
INCOME (NOT LESS THAN ZERO) FROM REVERSE REPURCHASE AGREEMENTS AND SECU-
RITIES BORROWING AGREEMENTS IS INCLUDED IN THE DENOMINATOR OF THE APPOR-
TIONMENT FRACTION. NET INTEREST INCOME FROM  REVERSE  REPURCHASE  AGREE-
MENTS  AND SECURITIES BORROWING AGREEMENTS IS DETERMINED FOR PURPOSES OF
THIS SUBDIVISION AFTER THE DEDUCTION OF THE INTEREST  EXPENSE  FROM  THE
TAXPAYER'S  REPURCHASE  AGREEMENTS AND SECURITIES LENDING AGREEMENTS BUT
CANNOT BE LESS THAN ZERO. FOR  THIS  CALCULATION,  THE  AMOUNT  OF  SUCH
INTEREST  EXPENSE IS THE INTEREST EXPENSE ASSOCIATED WITH THE SUM OF THE
VALUE  OF  THE  TAXPAYER'S  REPURCHASE  AGREEMENTS  WHERE  IT   IS   THE
SELLER/BORROWER  PLUS THE VALUE OF THE TAXPAYER'S AND SECURITIES LENDING
AGREEMENTS WHERE IT IS THE  SECURITIES  LENDER,  PROVIDED  SUCH  SUM  IS
LIMITED  TO  THE  SUM  OF THE VALUE OF THE TAXPAYER'S REVERSE REPURCHASE
AGREEMENTS WHERE IT IS THE SELLER/BORROWER AND THE VALUE OF THE  TAXPAY-
ER'S SECURITIES BORROWING AGREEMENTS.
  (F)  FEDERAL  FUNDS.  EIGHT PERCENT OF THE NET INTEREST (NOT LESS THAN
ZERO) FROM FEDERAL FUNDS IS INCLUDED IN THE NUMERATOR OF THE  APPORTION-
MENT  FRACTION. THE NET INTEREST (NOT LESS THAN ZERO) FROM FEDERAL FUNDS
IS INCLUDED IN THE DENOMINATOR OF THE APPORTIONMENT FRACTION. NET INTER-
EST FROM FEDERAL FUNDS IS DETERMINED AFTER DEDUCTION OF INTEREST EXPENSE
FROM FEDERAL FUNDS.
  (G) DIVIDENDS AND NET GAINS FROM SALES OF STOCK OR PARTNERSHIP  INTER-
ESTS. DIVIDENDS FROM STOCK, NET GAINS (NOT LESS THAN ZERO) FROM SALES OF
STOCK  AND  NET  GAINS (NOT LESS THAN ZERO) FROM THE SALE OF PARTNERSHIP
INTERESTS ARE NOT INCLUDED IN EITHER THE NUMERATOR OR DENOMINATOR OF THE
APPORTIONMENT FRACTION UNLESS THE COMMISSIONER  DETERMINES  PURSUANT  TO
SUBDIVISION  ELEVEN OF THIS SECTION THAT INCLUSION OF SUCH DIVIDENDS AND
NET GAINS (NOT LESS THAN ZERO) IS  NECESSARY  TO  PROPERLY  REFLECT  THE
BUSINESS INCOME OR CAPITAL OF THE TAXPAYER.
  (H)  OTHER  FINANCIAL  INSTRUMENTS. (I) RECEIPTS CONSTITUTING INTEREST
FROM OTHER FINANCIAL INSTRUMENTS SHALL BE INCLUDED IN THE  NUMERATOR  OF
THE  APPORTIONMENT  FRACTION  IF  THE  PAYOR  IS  LOCATED  IN THE STATE.
RECEIPTS CONSTITUTING INTEREST FROM OTHER FINANCIAL INSTRUMENTS, WHETHER

S. 6359                            58                            A. 8559

THE PAYOR IS WITHIN OR WITHOUT THE STATE, ARE INCLUDED IN THE  DENOMINA-
TOR OF THE APPORTIONMENT FRACTION.
  (II)  NET  GAINS  (NOT  LESS  THAN ZERO) FROM SALES OF OTHER FINANCIAL
INSTRUMENTS AND OTHER INCOME (NOT LESS THAN ZERO) FROM  OTHER  FINANCIAL
INSTRUMENTS  WHERE  THE  PURCHASER  OR PAYOR IS LOCATED IN THE STATE ARE
INCLUDED IN THE NUMERATOR OF THE APPORTIONMENT FRACTION, PROVIDED  THAT,
IF THE PURCHASER OR PAYOR IS A REGISTERED SECURITIES BROKER OR DEALER OR
THE  TRANSACTION IS MADE THROUGH A LICENSED EXCHANGE, THEN EIGHT PERCENT
OF THE NET GAINS (NOT LESS THAN ZERO) OR OTHER  INCOME  (NOT  LESS  THAN
ZERO)  IS  INCLUDED  IN THE NUMERATOR OF THE APPORTIONMENT FRACTION. NET
GAINS (NOT LESS THAN ZERO) FROM SALES OF OTHER FINANCIAL INSTRUMENTS AND
OTHER INCOME (NOT LESS THAN ZERO) FROM OTHER FINANCIAL  INSTRUMENTS  ARE
INCLUDED IN THE DENOMINATOR OF THE APPORTIONMENT FRACTION.
  (I)  PHYSICAL  COMMODITIES. NET INCOME (NOT LESS THAN ZERO) FROM SALES
OF PHYSICAL COMMODITIES ARE INCLUDED IN THE NUMERATOR OF THE  APPORTION-
MENT FRACTION AS PROVIDED IN THIS SUBPARAGRAPH. THE AMOUNT OF NET INCOME
FROM  SALES  OF  PHYSICAL  COMMODITIES  INCLUDED IN THE NUMERATOR OF THE
APPORTIONMENT FRACTION IS DETERMINED BY MULTIPLYING THE NET INCOME  FROM
SALES  OF  PHYSICAL COMMODITIES BY A FRACTION, THE NUMERATOR OF WHICH IS
THE AMOUNT OF RECEIPTS  FROM  SALES  OF  PHYSICAL  COMMODITIES  ACTUALLY
DELIVERED  TO POINTS WITHIN THE STATE OR, IF THERE IS NO ACTUAL DELIVERY
OF THE PHYSICAL COMMODITY, SOLD TO CUSTOMERS LOCATED IN THE  STATE,  AND
THE  DENOMINATOR  OF WHICH IS THE AMOUNT OF RECEIPTS FROM SALES OF PHYS-
ICAL COMMODITIES ACTUALLY DELIVERED TO POINTS  WITHIN  AND  WITHOUT  THE
STATE  OR  SOLD  TO  CUSTOMERS LOCATED WITHIN AND WITHOUT THE STATE. NET
INCOME (NOT LESS THAT  ZERO)  FROM  SALES  OF  PHYSICAL  COMMODITIES  IS
INCLUDED  IN  THE  DENOMINATOR OF THE APPORTIONMENT FRACTION. NET INCOME
(NOT LESS THAN ZERO) FROM SALES OF PHYSICAL  COMMODITIES  IS  DETERMINED
AFTER  THE  DEDUCTION  OF  THE  COST  TO ACQUIRE OR PRODUCE THE PHYSICAL
COMMODITIES.
  (B) OTHER RECEIPTS FROM BROKER OR  DEALER  ACTIVITIES.  RECEIPTS  FROM
SECURITIES  OR COMMODITIES BROKER OR DEALER ACTIVITIES DESCRIBED IN THIS
PARAGRAPH SHALL BE DEEMED TO BE GENERATED WITHIN THE STATE AS  DESCRIBED
IN SUBPARAGRAPHS ONE THROUGH EIGHT OF THIS PARAGRAPH. RECEIPTS FROM SUCH
ACTIVITIES GENERATED WITHIN THE STATE SHALL BE INCLUDED IN THE NUMERATOR
OF  THE  APPORTIONMENT FRACTION. RECEIPTS FROM SUCH ACTIVITIES GENERATED
WITHIN AND WITHOUT THE STATE SHALL BE INCLUDED IN THE DENOMINATOR OF THE
APPORTIONMENT FRACTION. FOR THE PURPOSES OF  THIS  PARAGRAPH,  THE  TERM
"SECURITIES"  SHALL HAVE THE SAME MEANING AS IN SECTION 475(C)(2) OF THE
INTERNAL REVENUE CODE AND THE TERM "COMMODITIES"  SHALL  HAVE  THE  SAME
MEANING AS IN SECTION 475(E)(2) OF THE INTERNAL REVENUE CODE.
  (1)  RECEIPTS  CONSTITUTING  BROKERAGE  COMMISSIONS  DERIVED  FROM THE
EXECUTION OF SECURITIES OR COMMODITIES PURCHASE OR SALES ORDERS FOR  THE
ACCOUNTS  OF  CUSTOMERS SHALL BE DEEMED TO BE GENERATED WITHIN THE STATE
IF THE MAILING ADDRESS IN THE RECORDS OF THE TAXPAYER  OF  THE  CUSTOMER
WHO IS RESPONSIBLE FOR PAYING SUCH COMMISSIONS IS WITHIN THE STATE.
  (2)  RECEIPTS CONSTITUTING MARGIN INTEREST EARNED ON BEHALF OF BROKER-
AGE ACCOUNTS SHALL BE DEEMED TO BE GENERATED WITHIN  THE  STATE  IF  THE
MAILING  ADDRESS  IN  THE RECORDS OF THE TAXPAYER OF THE CUSTOMER WHO IS
RESPONSIBLE FOR PAYING SUCH MARGIN INTEREST IS WITHIN THE STATE.
  (3)(A) RECEIPTS CONSTITUTING FEES EARNED BY THE TAXPAYER FOR  ADVISORY
SERVICES TO A CUSTOMER IN CONNECTION WITH THE UNDERWRITING OF SECURITIES
FOR  SUCH CUSTOMER (SUCH CUSTOMER BEING THE ENTITY THAT IS CONTEMPLATING
ISSUING OR IS ISSUING SECURITIES) OR FEES EARNED  BY  THE  TAXPAYER  FOR
MANAGING  AN  UNDERWRITING  SHALL  BE  DEEMED TO BE GENERATED WITHIN THE

S. 6359                            59                            A. 8559

STATE IF THE MAILING ADDRESS IN THE RECORDS  OF  THE  TAXPAYER  OF  SUCH
CUSTOMER WHO IS RESPONSIBLE FOR PAYING SUCH FEES IS WITHIN THE STATE.
  (B)  RECEIPTS  CONSTITUTING  THE  PRIMARY SPREAD OF SELLING CONCESSION
FROM UNDERWRITTEN SECURITIES SHALL BE DEEMED TO BE GENERATED WITHIN  THE
STATE TO THE EXTENT THE CUSTOMER IS LOCATED IN THE STATE.
  (C)  THE  TERM "PRIMARY SPREAD" MEANS THE DIFFERENCE BETWEEN THE PRICE
PAID BY THE TAXPAYER TO THE ISSUER OF THE SECURITIES BEING MARKETED  AND
THE  PRICE RECEIVED FROM THE SUBSEQUENT SALE OF THE UNDERWRITTEN SECURI-
TIES AT THE INITIAL PUBLIC OFFERING PRICE, LESS ANY  SELLING  CONCESSION
AND ANY FEES PAID TO THE TAXPAYER FOR ADVISORY SERVICES OR ANY MANAGER'S
FEES,  IF  SUCH  FEES ARE NOT PAID BY THE CUSTOMER TO THE TAXPAYER SEPA-
RATELY. THE TERM "PUBLIC OFFERING PRICE" MEANS THE PRICE AGREED UPON  BY
THE TAXPAYER AND THE ISSUER AT WHICH THE SECURITIES ARE TO BE OFFERED TO
THE  PUBLIC.  THE TERM "SELLING CONCESSION" MEANS THE AMOUNT PAID TO THE
TAXPAYER FOR PARTICIPATING IN THE UNDERWRITING OF A SECURITY  WHERE  THE
TAXPAYER IS NOT THE LEAD UNDERWRITER.
  (4)  RECEIPTS CONSTITUTING ACCOUNT MAINTENANCE FEES SHALL BE DEEMED TO
BE GENERATED WITHIN THE STATE IF THE MAILING ADDRESS IN  THE  RECORD  OF
THE  TAXPAYER OF THE CUSTOMER WHO IS RESPONSIBLE FOR PAYING SUCH ACCOUNT
MAINTENANCE FEES IS WITHIN THE STATE.
  (5) RECEIPTS CONSTITUTING FEES FOR MANAGEMENT  OR  ADVISORY  SERVICES,
INCLUDING  FEES  FOR ADVISORY SERVICES IN RELATION TO MERGER OR ACQUISI-
TION ACTIVITIES, BUT EXCLUDING FEES PAID FOR SERVICES DESCRIBED IN PARA-
GRAPH (D) OF THIS SUBDIVISION, SHALL BE DEEMED TO  BE  GENERATED  WITHIN
THE  STATE  IF THE MAILING ADDRESS IN THE RECORDS OF THE TAXPAYER OF THE
CUSTOMER WHO IS RESPONSIBLE FOR PAYING SUCH FEES IS WITHIN THE STATE.
  (6) RECEIPTS CONSTITUTING INTEREST EARNED BY THE TAXPAYER ON LOANS AND
ADVANCES MADE BY THE TAXPAYER  TO  A  CORPORATION  AFFILIATED  WITH  THE
TAXPAYER  BUT  WITH  WHICH  THE TAXPAYER IS NOT PERMITTED OR REQUIRED TO
FILE A COMBINED REPORT PURSUANT TO SECTION TWO  HUNDRED  TEN-C  OF  THIS
ARTICLE  SHALL BE DEEMED TO ARISE FROM SERVICES PERFORMED AT THE PRINCI-
PAL PLACE OF BUSINESS OF SUCH AFFILIATED CORPORATION.
  (7) IF THE TAXPAYER RECEIVES ANY OF THE RECEIPTS ENUMERATED IN SUBPAR-
AGRAPHS ONE THROUGH FOUR OF THIS PARAGRAPH AS A RESULT OF  A  SECURITIES
CORRESPONDENT  RELATIONSHIP  SUCH  TAXPAYER  HAS  WITH ANOTHER BROKER OR
DEALER WITH THE TAXPAYER ACTING IN THIS  RELATIONSHIP  AS  THE  CLEARING
FIRM,  SUCH RECEIPTS SHALL BE DEEMED TO BE GENERATED WITHIN THE STATE TO
EXTENT SET FORTH IN EACH OF  SUCH  SUBPARAGRAPHS.  THE  AMOUNT  OF  SUCH
RECEIPTS SHALL EXCLUDE THE AMOUNT THE TAXPAYER IS REQUIRED TO PAY TO THE
CORRESPONDENT  FIRM FOR SUCH CORRESPONDENT RELATIONSHIP. IF THE TAXPAYER
RECEIVES ANY OF THE RECEIPTS ENUMERATED  IN  SUBPARAGRAPHS  ONE  THROUGH
FOUR  OF  THIS  PARAGRAPH  AS  AS  RESULT  OF A SECURITIES CORRESPONDENT
RELATIONSHIP SUCH TAXPAYER HAS WITH ANOTHER BROKER OR  DEALER  WITH  THE
TAXPAYER  ACTING  IN  THIS  RELATIONSHIP  AS  THE INTRODUCING FIRM, SUCH
RECEIPTS SHALL BE DEEMED TO BE GENERATED WITHIN THE STATE TO THE  EXTENT
SET FORTH IN EACH OF SUCH SUBPARAGRAPHS.
  (8) IF, FOR PURPOSES OF SUBPARAGRAPHS ONE, TWO, CLAUSE (A) OF SUBPARA-
GRAPH THREE, FOUR, OR FIVE OF THIS PARAGRAPH THE TAXPAYER IS UNABLE FROM
ITS  RECORDS  TO  DETERMINE  THE  MAILING ADDRESS OF THE CUSTOMER, EIGHT
PERCENT OF THE RECEIPTS IS INCLUDED IN THE NUMERATOR OF  THE  APPORTION-
MENT FRACTION.
  (C)  RECEIPTS FROM CREDIT CARD AND SIMILAR ACTIVITIES. RECEIPTS RELAT-
ING TO THE  BANK,  CREDIT,  TRAVEL  AND  ENTERTAINMENT  CARD  ACTIVITIES
DESCRIBED  IN  THIS PARAGRAPH SHALL BE DEEMED TO BE GENERATED WITHIN THE
STATE AS DESCRIBED IN SUBPARAGRAPHS ONE THROUGH THREE OF THIS PARAGRAPH.
RECEIPTS FROM SUCH  ACTIVITIES  GENERATED  WITHIN  THE  STATE  SHALL  BE

S. 6359                            60                            A. 8559

INCLUDED  IN THE NUMERATOR OF THE APPORTIONMENT FRACTION.  RECEIPTS FROM
SUCH ACTIVITIES GENERATED WITHIN AND WITHOUT THE STATE SHALL BE INCLUDED
IN THE DENOMINATOR OF THE APPORTIONMENT FRACTION.
  (1)  RECEIPTS  CONSTITUTING  INTEREST,  AND  FEES AND PENALTIES IN THE
NATURE OF INTEREST, FROM BANK, CREDIT,  TRAVEL  AND  ENTERTAINMENT  CARD
RECEIVABLES  SHALL  BE  DEEMED  TO  BE GENERATED WITHIN THE STATE IF THE
MAILING ADDRESS OF THE CARD HOLDER IN THE RECORDS OF THE TAXPAYER IS  IN
THE STATE;
  (2)  RECEIPTS  FROM  SERVICE CHARGES AND FEES FROM SUCH CARDS SHALL BE
DEEMED TO BE GENERATED WITHIN THE STATE IF THE MAILING  ADDRESS  OF  THE
CARD HOLDER IN THE RECORDS OF THE TAXPAYER IS IN THE STATE; AND
  (3)  RECEIPTS  FROM MERCHANT DISCOUNTS SHALL BE DEEMED TO BE GENERATED
WITHIN THE STATE IF THE MERCHANT IS LOCATED WITHIN  THE  STATE.  IN  THE
CASE  OF  A  MERCHANT  WITH  LOCATIONS  BOTH WITHIN AND WITHOUT NEW YORK
STATE, ONLY RECEIPTS FROM MERCHANT DISCOUNTS ATTRIBUTABLE TO SALES  MADE
FROM LOCATIONS WITHIN NEW YORK STATE ARE ALLOCATED TO NEW YORK STATE. IT
SHALL  BE  PRESUMED  THAT THE LOCATION OF THE MERCHANT IS THE ADDRESS OF
THE MERCHANT SHOWN ON THE INVOICE  SUBMITTED  BY  THE  MERCHANT  TO  THE
TAXPAYER.
  (D)  RECEIPTS FROM CERTAIN SERVICES TO INVESTMENT COMPANIES.  RECEIPTS
RECEIVED FROM AN INVESTMENT COMPANY ARISING FROM THE SALE OF MANAGEMENT,
ADMINISTRATION OR DISTRIBUTION SERVICES TO SUCH INVESTMENT  COMPANY  ARE
INCLUDED  IN THE DENOMINATOR OF THE APPORTIONMENT FRACTION.  THE PORTION
OF SUCH RECEIPTS INCLUDED IN THE NUMERATOR OF THE APPORTIONMENT FRACTION
(SUCH PORTION REFERRED TO HEREIN AS  THE  NEW  YORK  PORTION)  SHALL  BE
DETERMINED AS PROVIDED IN THIS PARAGRAPH.
  (1)  THE  NEW  YORK  PORTION SHALL BE THE PRODUCT OF THE TOTAL OF SUCH
RECEIPTS FROM THE SALE OF SUCH SERVICES AND A FRACTION. THE NUMERATOR OF
THAT FRACTION IS THE SUM OF THE MONTHLY PERCENTAGES (AS DEFINED  HEREIN-
AFTER)  DETERMINED  FOR  EACH  MONTH OF THE INVESTMENT COMPANY'S TAXABLE
YEAR FOR FEDERAL INCOME TAX PURPOSES WHICH TAXABLE YEAR ENDS WITHIN  THE
TAXABLE  YEAR  OF THE TAXPAYER (BUT EXCLUDING ANY MONTH DURING WHICH THE
INVESTMENT COMPANY HAD NO OUTSTANDING SHARES).  THE  MONTHLY  PERCENTAGE
FOR  EACH  SUCH  MONTH IS DETERMINED BY DIVIDING THE NUMBER OF SHARES IN
THE INVESTMENT COMPANY THAT ARE OWNED ON THE LAST DAY OF  THE  MONTH  BY
SHAREHOLDERS  THAT  ARE  DOMICILED  IN  THE STATE BY THE TOTAL NUMBER OF
SHARES IN THE INVESTMENT COMPANY OUTSTANDING ON THAT DATE.  THE  DENOMI-
NATOR OF THE FRACTION IS THE NUMBER OF SUCH MONTHLY PERCENTAGES.
  (2)(A)  FOR PURPOSES OF THIS PARAGRAPH, AN INDIVIDUAL, ESTATE OR TRUST
IS DEEMED TO BE LOCATED IN THE STATE IF HIS, HER OR ITS MAILING  ADDRESS
ON  THE  RECORDS  OF  THE INVESTMENT COMPANY IS IN THE STATE. A BUSINESS
ENTITY IS DEEMED TO BE LOCATED IN THE STATE IF ITS  COMMERCIAL  DOMICILE
IS LOCATED IN THE STATE.
  (B)  FOR  PURPOSES  OF  THIS  PARAGRAPH, THE TERM "INVESTMENT COMPANY"
MEANS A REGULATED INVESTMENT COMPANY, AS DEFINED IN SECTION 851  OF  THE
INTERNAL REVENUE CODE, AND A PARTNERSHIP TO WHICH SECTION 7704(A) OF THE
INTERNAL  REVENUE  CODE APPLIES (BY VIRTUE OF SECTION 7704(C)(3) OF SUCH
CODE) AND THAT MEETS THE REQUIREMENTS OF SECTION 851(B)  OF  SUCH  CODE.
THE  PRECEDING SENTENCE SHALL BE APPLIED TO THE TAXABLE YEAR FOR FEDERAL
INCOME TAX PURPOSES OF THE BUSINESS ENTITY THAT IS ASSERTED  TO  CONSTI-
TUTE  AN  INVESTMENT  COMPANY  THAT  ENDS WITHIN THE TAXABLE YEAR OF THE
TAXPAYER.
  (C) FOR PURPOSES OF THIS PARAGRAPH THE TERM "RECEIPTS FROM AN  INVEST-
MENT  COMPANY"  INCLUDES  AMOUNTS  RECEIVED  DIRECTLY FROM AN INVESTMENT
COMPANY AS WELL AS  AMOUNTS  RECEIVED  FROM  THE  SHAREHOLDERS  IN  SUCH
INVESTMENT COMPANY, IN THEIR CAPACITY AS SUCH.

S. 6359                            61                            A. 8559

  (D)  FOR  PURPOSES  OF  THIS PARAGRAPH, THE TERM "MANAGEMENT SERVICES"
MEANS THE RENDERING OF  INVESTMENT  ADVICE  TO  AN  INVESTMENT  COMPANY,
MAKING  DETERMINATIONS  AS TO WHEN SALES AND PURCHASES OF SECURITIES ARE
TO BE MADE ON BEHALF  OF  AN  INVESTMENT  COMPANY,  OR  THE  SELLING  OR
PURCHASING  OF  SECURITIES CONSTITUTING ASSETS OF AN INVESTMENT COMPANY,
AND RELATED ACTIVITIES, BUT ONLY WHERE SUCH ACTIVITY OR  ACTIVITIES  ARE
PERFORMED  PURSUANT  TO  A  CONTRACT WITH THE INVESTMENT COMPANY ENTERED
INTO PURSUANT TO SECTION 15(A) OF THE FEDERAL INVESTMENT COMPANY ACT  OF
NINETEEN HUNDRED FORTY, AS AMENDED.
  (E)  FOR  PURPOSES OF THIS PARAGRAPH, THE TERM "DISTRIBUTION SERVICES"
MEANS THE SERVICES OF ADVERTISING, SERVICING INVESTOR ACCOUNTS  (INCLUD-
ING  REDEMPTIONS),  MARKETING  SHARES OR SELLING SHARES OF AN INVESTMENT
COMPANY, BUT, IN THE CASE OF ADVERTISING,  SERVICING  INVESTOR  ACCOUNTS
(INCLUDING  REDEMPTIONS) OR MARKETING SHARES, ONLY WHERE SUCH SERVICE IS
PERFORMED BY A PERSON WHO IS (OR WAS, IN THE CASE OF A CLOSED END COMPA-
NY) ALSO ENGAGED IN THE SERVICE OF SELLING SUCH SHARES. IN THE  CASE  OF
AN  OPEN  END  COMPANY, SUCH SERVICE OF SELLING SHARES MUST BE PERFORMED
PURSUANT TO A CONTRACT ENTERED INTO PURSUANT TO  SECTION  15(B)  OF  THE
FEDERAL INVESTMENT COMPANY ACT OF NINETEEN HUNDRED FORTY, AS AMENDED.
  (F) FOR PURPOSES OF THIS PARAGRAPH, THE TERM "ADMINISTRATION SERVICES"
INCLUDES  CLERICAL,  ACCOUNTING,  BOOKKEEPING, DATA PROCESSING, INTERNAL
AUDITING, LEGAL AND TAX SERVICES PERFORMED FOR AN INVESTMENT COMPANY BUT
ONLY IF THE PROVIDER OF SUCH SERVICE OR SERVICES DURING THE TAXABLE YEAR
IN WHICH SUCH SERVICE OR SERVICES ARE  SOLD  ALSO  SELLS  MANAGEMENT  OR
DISTRIBUTION SERVICES, AS DEFINED HEREINABOVE, TO SUCH INVESTMENT COMPA-
NY.
  (E) FOR PURPOSES OF THIS SUBDIVISION, A TAXPAYER SHALL USE THE FOLLOW-
ING HIERARCHY TO DETERMINE THE COMMERCIAL DOMICILE OF A BUSINESS ENTITY,
BASED  ON THE INFORMATION KNOWN TO THE TAXPAYER: (I) THE LOCATION OF THE
TREASURY FUNCTION OF THE BUSINESS ENTITY; (II) THE  SEAT  OF  MANAGEMENT
AND CONTROL OF THE BUSINESS ENTITY; AND (III) THE BILLING ADDRESS OF THE
BUSINESS  ENTITY  IN THE TAXPAYER'S RECORDS.  THE TAXPAYER MUST EXERCISE
DUE DILIGENCE BEFORE REJECTING A METHOD IN THIS HIERARCHY AND PROCEEDING
TO THE NEXT METHOD.
  (F) FOR PURPOSES OF THIS SUBDIVISION, THE TERM "REGISTERED  SECURITIES
BROKER  OR  DEALER"  MEANS  A BROKER OR DEALER REGISTERED AS SUCH BY THE
SECURITIES AND EXCHANGE COMMISSION OR THE  COMMODITIES  FUTURES  TRADING
COMMISSION, AND SHALL INCLUDE AN OTC DERIVATIVES DEALER AS DEFINED UNDER
REGULATIONS  OF THE SECURITIES AND EXCHANGE COMMISSION AT TITLE 17, PART
240,  SECTION  3B-12  OF  THE  CODE  OF  FEDERAL  REGULATIONS  (17   CFR
240.3B-12).
  6.  RECEIPTS  FROM  RAILROAD  AND TRUCKING BUSINESS. RECEIPTS FROM THE
CONDUCT OF A RAILROAD BUSINESS (INCLUDING SURFACE RAILROAD,  WHETHER  OR
NOT OPERATED BY STEAM, SUBWAY RAILROAD, ELEVATED RAILROAD, PALACE CAR OR
SLEEPING CAR BUSINESS) OR A TRUCKING BUSINESS ARE INCLUDED IN THE NUMER-
ATOR  OF  THE  APPORTIONMENT FRACTION AS FOLLOWS. THE AMOUNT OF RECEIPTS
FROM THE CONDUCT OF A RAILROAD BUSINESS OR A TRUCKING BUSINESS  INCLUDED
IN  THE  NUMERATOR OF THE APPORTIONMENT FRACTION IS DETERMINED BY MULTI-
PLYING THE AMOUNT OF RECEIPTS FROM SUCH  BUSINESS  BY  A  FRACTION,  THE
NUMERATOR OF WHICH IS THE MILES IN SUCH BUSINESS WITHIN THE STATE DURING
THE PERIOD COVERED BY THE TAXPAYER'S REPORT AND THE DENOMINATOR OF WHICH
IS  THE  MILES IN SUCH BUSINESS WITHIN AND WITHOUT THE STATE DURING SUCH
PERIOD.  RECEIPTS FROM THE CONDUCT OF THE RAILROAD BUSINESS OR A  TRUCK-
ING  BUSINESS ARE INCLUDED IN THE DENOMINATOR OF THE APPORTIONMENT FRAC-
TION.

S. 6359                            62                            A. 8559

  7. RECEIPTS  FROM  AVIATION  SERVICES.  (A)  AIR  FREIGHT  FORWARDING.
RECEIPTS  OF  A  TAXPAYER  FROM  THE  ACTIVITY OF AIR FREIGHT FORWARDING
ACTING AS PRINCIPAL AND LIKE INDIRECT AIR CARRIER RECEIPTS ARISING  FROM
SUCH  ACTIVITY  SHALL  BE INCLUDED IN THE NUMERATOR OF THE APPORTIONMENT
FRACTION  AS  FOLLOWS:  ONE HUNDRED PERCENT OF SUCH RECEIPTS IF BOTH THE
PICKUP AND DELIVERY ASSOCIATED WITH SUCH RECEIPTS ARE MADE IN THE  STATE
AND  FIFTY  PERCENT  OF  SUCH  RECEIPTS IF EITHER THE PICKUP OR DELIVERY
ASSOCIATED WITH SUCH RECEIPTS IS MADE IN THIS  STATE.    SUCH  RECEIPTS,
WHETHER THE PICKUP OR DELIVERY ASSOCIATED WITH THE RECEIPTS IS WITHIN OR
WITHOUT  THE  STATE,  SHALL BE INCLUDED IN THE DENOMINATOR OF THE APPOR-
TIONMENT FRACTION.
  (B) OTHER AVIATION SERVICES. (1)(A)  THE  PORTION  OF  RECEIPTS  OF  A
TAXPAYER  FROM AVIATION SERVICES (OTHER THAN SERVICES DESCRIBED IN PARA-
GRAPH (A) OF THIS SUBDIVISION) TO BE INCLUDED IN THE  NUMERATOR  OF  THE
APPORTIONMENT  FRACTION  SHALL BE DETERMINED BY MULTIPLYING ITS RECEIPTS
FROM SUCH AVIATION SERVICES BY A PERCENTAGE WHICH IS EQUAL TO THE ARITH-
METIC AVERAGE OF THE FOLLOWING THREE PERCENTAGES:
  (I) THE  PERCENTAGE  DETERMINED  BY  DIVIDING  SIXTY  PERCENT  OF  THE
AIRCRAFT  ARRIVALS  AND  DEPARTURES  WITHIN  THIS  STATE BY THE TAXPAYER
DURING THE PERIOD COVERED BY ITS REPORT BY THE TOTAL  AIRCRAFT  ARRIVALS
AND  DEPARTURES  WITHIN  AND  WITHOUT  THIS  STATE  DURING  SUCH PERIOD;
PROVIDED, HOWEVER, ARRIVALS AND DEPARTURES  SOLELY  FOR  MAINTENANCE  OR
REPAIR,  REFUELING  (WHERE  NO  DEBARKATION  OR  EMBARKATION  OF TRAFFIC
OCCURS), ARRIVALS AND DEPARTURES OF FERRY AND PERSONNEL TRAINING FLIGHTS
OR ARRIVALS AND DEPARTURES IN THE EVENT OF  EMERGENCY  SITUATIONS  SHALL
NOT  BE  INCLUDED  IN  COMPUTING  SUCH ARRIVAL AND DEPARTURE PERCENTAGE;
PROVIDED, FURTHER, THE COMMISSIONER MAY ALSO EXEMPT FROM SUCH PERCENTAGE
AIRCRAFT ARRIVALS AND DEPARTURES OF ALL  NON-REVENUE  FLIGHTS  INCLUDING
FLIGHTS  INVOLVING THE TRANSPORTATION OF OFFICERS OR EMPLOYEES RECEIVING
AIR TRANSPORTATION TO PERFORM MAINTENANCE OR REPAIR  SERVICES  OR  WHERE
SUCH  OFFICERS OR EMPLOYEES ARE TRANSPORTED IN CONJUNCTION WITH AN EMER-
GENCY SITUATION OR THE INVESTIGATION OF AN AIR DISASTER (OTHER THAN ON A
SCHEDULED FLIGHT); PROVIDED, HOWEVER, THAT ARRIVALS  AND  DEPARTURES  OF
FLIGHTS TRANSPORTING OFFICERS AND EMPLOYEES RECEIVING AIR TRANSPORTATION
FOR PURPOSES OTHER THAN SPECIFIED ABOVE (WITHOUT REGARD TO REMUNERATION)
SHALL BE INCLUDED IN COMPUTING SUCH ARRIVAL AND DEPARTURE PERCENTAGE;
  (II) THE PERCENTAGE DETERMINED BY DIVIDING SIXTY PERCENT OF THE REVEN-
UE  TONS  HANDLED  BY  THE TAXPAYER AT AIRPORTS WITHIN THIS STATE DURING
SUCH PERIOD BY THE TOTAL REVENUE TONS HANDLED BY IT AT  AIRPORTS  WITHIN
AND WITHOUT THIS STATE DURING SUCH PERIOD; AND
  (III)  THE  PERCENTAGE  DETERMINED  BY  DIVIDING  SIXTY PERCENT OF THE
TAXPAYER'S ORIGINATING REVENUE WITHIN THIS STATE FOR SUCH PERIOD BY  ITS
TOTAL ORIGINATING REVENUE WITHIN AND WITHOUT THIS STATE FOR SUCH PERIOD.
  (B)  AS  USED HEREIN THE TERM "AIRCRAFT ARRIVALS AND DEPARTURES" MEANS
THE NUMBER OF LANDINGS AND TAKEOFFS OF THE AIRCRAFT OF THE TAXPAYER  AND
THE NUMBER OF AIR PICKUPS AND DELIVERIES BY THE AIRCRAFT OF SUCH TAXPAY-
ER;  THE  TERM  "ORIGINATING REVENUE" MEANS REVENUE TO THE TAXPAYER FROM
THE TRANSPORTATION OR REVENUE  PASSENGERS  AND  REVENUE  PROPERTY  FIRST
RECEIVED  BY THE TAXPAYER EITHER AS ORIGINATING OR CONNECTING TRAFFIC AT
AIRPORTS; AND THE  TERM  "REVENUE  TONS  HANDLED"  BY  THE  TAXPAYER  AT
AIRPORTS  MEANS THE WEIGHT IN TONS OF REVENUE PASSENGERS (AT TWO HUNDRED
POUNDS PER PASSENGER) AND REVENUE CARGO FIRST RECEIVED EITHER AS  ORIGI-
NATING  OR  CONNECTING  TRAFFIC OR FINALLY DISCHARGED BY THE TAXPAYER AT
AIRPORTS;

S. 6359                            63                            A. 8559

  (2) ALL SUCH RECEIPTS OF A TAXPAYER FROM AVIATION  SERVICES  DESCRIBED
IN  THIS  PARAGRAPH ARE INCLUDED IN THE DENOMINATOR OF THE APPORTIONMENT
FRACTION.
  8. RECEIPTS FROM SALES OF ADVERTISING. (A) THE AMOUNT OF RECEIPTS FROM
SALES OF ADVERTISING IN NEWSPAPERS OR PERIODICALS INCLUDED IN THE NUMER-
ATOR  OF  THE  APPORTIONMENT  FRACTION  IS DETERMINED BY MULTIPLYING THE
TOTAL OF SUCH RECEIPTS BY A FRACTION, THE  NUMERATOR  OF  WHICH  IS  THE
NUMBER  OF  NEWSPAPERS  AND  PERIODICALS  DELIVERED TO POINTS WITHIN THE
STATE AND THE DENOMINATOR OF WHICH IS THE NUMBER OF NEWSPAPERS AND PERI-
ODICALS DELIVERED TO POINTS WITHIN AND WITHOUT THE STATE. THE  TOTAL  OF
SUCH  RECEIPTS FROM SALES OF ADVERTISING IN NEWSPAPERS OR PERIODICALS IS
INCLUDED IN THE DENOMINATOR OF THE APPORTIONMENT FRACTION.
  (B) THE AMOUNT OF RECEIPTS FROM SALES OF ADVERTISING ON TELEVISION  OR
RADIO  INCLUDED IN THE APPORTIONMENT FRACTION IS DETERMINED BY MULTIPLY-
ING THE TOTAL OF SUCH RECEIPTS BY A FRACTION, THE NUMERATOR OF WHICH  IS
THE  NUMBER OF VIEWERS OR LISTENERS WITHIN THE STATE AND THE DENOMINATOR
OF WHICH IS THE NUMBER OF VIEWERS OR LISTENERS WITHIN  AND  WITHOUT  THE
STATE.  THE  TOTAL  OF  SUCH RECEIPTS FROM SALES OF ADVERTISING ON TELE-
VISION AND RADIO IS INCLUDED IN THE  DENOMINATOR  OF  THE  APPORTIONMENT
FRACTION.
  (C)  THE AMOUNT OF RECEIPTS FROM SALES OF ADVERTISING NOT DESCRIBED IN
PARAGRAPH (A) OR (B) OF THIS SUBDIVISION THAT IS FURNISHED, PROVIDED  OR
DELIVERED  TO,  OR ACCESSED BY THE VIEWER OR LISTENER THROUGH THE USE OF
WIRE, CABLE, FIBER-OPTIC, LASER, MICROWAVE,  RADIO  WAVE,  SATELLITE  OR
SIMILAR  SUCCESSOR  MEDIA  OR  ANY  COMBINATION THEREOF, INCLUDED IN THE
NUMERATOR OF THE APPORTIONMENT FRACTION IS DETERMINED BY MULTIPLYING THE
TOTAL OF SUCH RECEIPTS BY A FRACTION, THE  NUMERATOR  OF  WHICH  IS  THE
NUMBER  OF  VIEWERS OR LISTENERS WITHIN THE STATE AND THE DENOMINATOR OF
WHICH IS THE NUMBER OF VIEWERS  OR  LISTENERS  WITHIN  AND  WITHOUT  THE
STATE. THE TOTAL OF SUCH RECEIPTS FROM SALES OF ADVERTISING DESCRIBED IN
THIS PARAGRAPH IS INCLUDED IN THE DENOMINATOR OF THE APPORTIONMENT FRAC-
TION.
  9.  RECEIPTS FROM TRANSPORTATION OR TRANSMISSION OF GAS THROUGH PIPES.
RECEIPTS FROM THE TRANSPORTATION OR TRANSMISSION OF  GAS  THROUGH  PIPES
ARE  INCLUDED IN THE NUMERATOR OF THE APPORTIONMENT FRACTION AS FOLLOWS.
THE AMOUNT OF RECEIPTS FROM THE TRANSPORTATION OR  TRANSMISSION  OF  GAS
THROUGH PIPES INCLUDED IN THE NUMERATOR OF THE APPORTIONMENT FRACTION IS
DETERMINED  BY  MULTIPLYING THE TOTAL AMOUNT OF SUCH RECEIPTS BY A FRAC-
TION, THE NUMERATOR OF WHICH  IS  THE  TAXPAYER'S  TRANSPORTATION  UNITS
WITHIN  THE  STATE AND THE DENOMINATOR OF WHICH IS THE TAXPAYER'S TRANS-
PORTATION UNITS WITHIN AND WITHOUT THE STATE. A TRANSPORTATION  UNIT  IS
THE TRANSPORTATION OF ONE CUBIC FOOT OF GAS OVER A DISTANCE OF ONE MILE.
THE  TOTAL AMOUNT OF RECEIPTS FROM THE TRANSPORTATION OR TRANSMISSION OF
GAS THROUGH PIPES IS INCLUDED IN THE DENOMINATOR  OF  THE  APPORTIONMENT
FRACTION.
  10.  (A)  RECEIPTS  FROM  OTHER  SERVICES AND OTHER BUSINESS RECEIPTS.
RECEIPTS FROM SERVICES NOT ADDRESSED IN SUBDIVISIONS ONE THROUGH NINE OF
THIS SECTION AND OTHER BUSINESS RECEIPTS NOT ADDRESSED IN SUCH  SUBDIVI-
SIONS  SHALL  BE INCLUDED IN THE NUMERATOR OF THE APPORTIONMENT FRACTION
IF THE LOCATION OF THE CUSTOMER IS WITHIN THE STATE. SUCH RECEIPTS  FROM
CUSTOMERS  WITHIN  AND WITHOUT THE STATE ARE INCLUDED IN THE DENOMINATOR
OF THE APPORTIONMENT FRACTION. WHETHER THE RECEIPTS ARE INCLUDED IN  THE
NUMERATOR  OF  THE APPORTIONMENT FRACTION IS DETERMINED ACCORDING TO THE
HIERARCHY OF METHOD SET FORTH IN PARAGRAPH (B) OF THIS SUBDIVISION.  THE
TAXPAYER  MUST  EXERCISE  DUE  DILIGENCE  UNDER EACH METHOD DESCRIBED IN

S. 6359                            64                            A. 8559

PARAGRAPH (B) BEFORE REJECTING IT AND PROCEEDING TO THE NEXT  METHOD  IN
THE HIERARCHY.
  (B)  HIERARCHY  OF  METHODS.  (1)  DELIVERY  DESTINATION. RECEIPTS FOR
SERVICES PERFORMED FOR A CUSTOMER'S PARTICULAR LOCATION, SUCH AS WHERE A
DELIVERY IS MADE TO THAT LOCATION, AS MAY BE  INDICATED  ON  A  BILL  OF
LADING OR PURCHASE INVOICE, ARE SOURCED TO THAT LOCATION.
  (2) BILLING ADDRESS OF THE CUSTOMER.
  (3) ZIP CODE OR OTHER GEOGRAPHIC INDICATOR OF THE CUSTOMER'S LOCATION.
  (4)  PERCENTAGE OF THE TAXPAYER'S RECEIPTS WITHIN THE STATE DETERMINED
PURSUANT TO THIS SUBDIVISION FOR THE PRECEDING TAXABLE YEAR OR,  IF  THE
TAXPAYER  WAS NOT SUBJECT TO TAX IN THE PRECEDING TAXABLE YEAR, THEN THE
PERCENTAGE OF THE TAXPAYER'S RECEIPTS WITHIN THE STATE  IN  THE  CURRENT
TAXABLE YEAR DETERMINED PURSUANT TO THIS SUBDIVISION.
  11.  IF  IT  SHALL  APPEAR  TO THE COMMISSIONER THAT THE APPORTIONMENT
FRACTION DETERMINED PURSUANT TO THIS SECTION DOES NOT RESULT IN A PROPER
REFLECTION OF THE TAXPAYER'S  BUSINESS  INCOME  OR  CAPITAL  WITHIN  THE
STATE, THE COMMISSIONER IS AUTHORIZED IN HIS OR HER DISCRETION TO ADJUST
IT BY (A) EXCLUDING ONE OR MORE ITEMS IN SUCH DETERMINATION, (B) INCLUD-
ING  ONE  OR  MORE  OTHER  ITEMS IN SUCH DETERMINATION, OR (C) ANY OTHER
SIMILAR OR DIFFERENT METHOD CALCULATED  TO  EFFECT  A  FAIR  AND  PROPER
APPORTIONMENT  OF  THE BUSINESS INCOME AND CAPITAL REASONABLY ATTRIBUTED
TO THE STATE.
  S 17. The tax law is amended by adding a new section 210-B to read  as
follows:
  S 210-B. CREDITS. 1. INVESTMENT TAX CREDIT (ITC). (A) A TAXPAYER SHALL
BE ALLOWED A CREDIT, TO BE COMPUTED AS HEREINAFTER PROVIDED, AGAINST THE
TAX  IMPOSED  BY  THIS  ARTICLE.  THE  AMOUNT OF THE CREDIT SHALL BE THE
PERCENT 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 CREDIT 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 CONSTI-
TUTES 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  PROPERTY, 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 INVEST-
MENT 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  FIVE
PERCENT WITH RESPECT TO THE FIRST THREE HUNDRED FIFTY MILLION DOLLARS OF
THE INVESTMENT CREDIT BASE, AND FOUR PERCENT WITH RESPECT TO THE INVEST-
MENT  CREDIT  BASE  IN  EXCESS  OF  THREE HUNDRED FIFTY MILLION DOLLARS,
EXCEPT IN THE CASE OF RESEARCH AND DEVELOPMENT PROPERTY AT THE OPTION OF
THE TAXPAYER THE APPLICABLE PERCENTAGE SHALL BE NINE.
  (B) QUALIFYING PROPERTY. (I) A CREDIT  SHALL  BE  ALLOWED  UNDER  THIS
SUBDIVISION  TO  A QUALIFIED NEW YORK MANUFACTURER, A QUALIFIED NEW YORK
AGRICULTURAL BUSINESS OR A  QUALIFIED  NEW  YORK  MINING  BUSINESS  WITH
RESPECT  TO  TANGIBLE  PERSONAL  PROPERTY  AND  OTHER  TANGIBLE PROPERTY

S. 6359                            65                            A. 8559

INCLUDING BUILDINGS AND STRUCTURAL COMPONENTS OF  BUILDINGS,  WHICH  (A)
ARE  DEPRECIABLE  PURSUANT  TO  SECTION  ONE  HUNDRED SIXTY-SEVEN OF THE
INTERNAL REVENUE CODE, (B) HAVE A USEFUL LIFE OF FOUR YEARS OR MORE, (C)
ARE  ACQUIRED BY PURCHASE AS DEFINED IN SECTION ONE HUNDRED SEVENTY-NINE
(D) OF THE INTERNAL REVENUE CODE,  (D)  HAVE  NOT  BEEN  PREVIOUSLY  THE
SUBJECT  OF  AN  INVESTMENT  TAX CREDIT OR EMPIRE ZONE INVESTMENT CREDIT
ALLOWED TO ANOTHER TAXPAYER, (E) HAVE A SITUS IN THIS STATE AND (F)  ARE
PRINCIPALLY  USED BY THE TAXPAYER IN THE PRODUCTION OF GOODS FOR SALE OR
ARE RESEARCH AND DEVELOPMENT PROPERTY.
  (II) FOR PURPOSES OF THIS PARAGRAPH, THE FOLLOWING  DEFINITIONS  SHALL
APPLY:
  (A)  PROPERTY  USED  IN THE PRODUCTION OF GOODS FOR SALE SHALL INCLUDE
MACHINERY, EQUIPMENT OR OTHER TANGIBLE  PROPERTY  WHICH  IS  PRINCIPALLY
USED  IN  THE  REPAIR AND SERVICE OF OTHER MACHINERY, EQUIPMENT OR OTHER
TANGIBLE PROPERTY USED PRINCIPALLY IN THE PRODUCTION OF GOODS  FOR  SALE
AND  SHALL  INCLUDE  ALL  FACILITIES  USED  IN  THE PRODUCTION OPERATION
INCLUDING STORAGE OF MATERIAL TO  BE  USED  IN  PRODUCTION  AND  OF  THE
PRODUCTS THAT ARE PRODUCED.
  (B)  RESEARCH  AND  DEVELOPMENT  PROPERTY SHALL MEAN PROPERTY WHICH IS
USED FOR PURPOSES OF RESEARCH AND DEVELOPMENT  IN  THE  EXPERIMENTAL  OR
LABORATORY SENSE. SUCH PURPOSES SHALL NOT BE DEEMED TO INCLUDE THE ORDI-
NARY TESTING OR INSPECTION OF MATERIALS OR PRODUCTS FOR QUALITY CONTROL,
EFFICIENCY  SURVEYS,  MANAGEMENT STUDIES, CONSUMER SURVEYS, ADVERTISING,
PROMOTIONS, OR RESEARCH IN CONNECTION WITH LITERARY, HISTORICAL OR SIMI-
LAR PROJECTS.
  (C) A QUALIFIED NEW YORK AGRICULTURAL BUSINESS SHALL MEAN  A  TAXPAYER
OR COMBINED GROUP PRINCIPALLY ENGAGED IN FARMING, AGRICULTURE, HORTICUL-
TURE,  FLORICULTURE,  VITICULTURE  OR COMMERCIAL FISHING IN THE STATE. A
TAXPAYER OR A COMBINED GROUP IS PRINCIPALLY ENGAGED IN FARMING, AGRICUL-
TURE, HORTICULTURE, FLORICULTURE, VITICULTURE OR COMMERCIAL  FISHING  IN
THE  STATE  IF  MORE  THAN  FIFTY  PERCENT  OF THE GROSS RECEIPTS OF THE
TAXPAYER OR THE COMBINED GROUP, RESPECTIVELY, DURING  THE  TAXABLE  YEAR
ARE  DERIVED  FROM  THE  SALE OF GOODS PRODUCED BY ANY OF THE ACTIVITIES
SPECIFIED IN THIS SENTENCE THAT ARE CONDUCTED IN NEW YORK. IN  COMPUTING
A  COMBINED  GROUP'S  GROSS  RECEIPTS,  INTERCORPORATE RECEIPTS SHALL BE
ELIMINATED. IN COMPUTING GROSS RECEIPTS FOR A TAXPAYER THAT IS A PARTNER
IN PARTNERSHIP, INTER-ENTITY RECEIPTS  BETWEEN  THE  TAXPAYER  AND  SUCH
PARTNERSHIP SHALL BE ELIMINATED.
  (D)  A  QUALIFIED  NEW  YORK  MINING BUSINESS SHALL MEAN A TAXPAYER OR
COMBINED GROUP PRINCIPALLY ENGAGED IN MINING IN THE STATE. A TAXPAYER OR
COMBINED GROUP IS PRINCIPALLY ENGAGED IN MINING IN  THE  STATE  IF  MORE
THAN FIFTY PERCENT OF THE GROSS RECEIPTS OF THE TAXPAYER OR THE COMBINED
GROUP,  RESPECTIVELY,  DURING THE TAXABLE YEAR ARE DERIVED FROM THE SALE
OF GOODS PRODUCED BY MINING ACTIVITIES THAT ARE CONDUCTED IN THE  STATE.
IN  COMPUTING A COMBINED GROUP'S GROSS RECEIPTS, INTERCORPORATE RECEIPTS
SHALL BE ELIMINATED. IN COMPUTING GROSS RECEIPTS FOR A TAXPAYER THAT  IS
A PARTNER IN PARTNERSHIP, INTER-ENTITY RECEIPTS BETWEEN THE TAXPAYER AND
SUCH PARTNERSHIP SHALL BE ELIMINATED.
  (III)  IN  ORDER  TO PROPERLY ADMINISTER THE CREDIT AUTHORIZED BY THIS
SUBDIVISION, THE DEPARTMENT MAY DISCLOSE INFORMATION ABOUT THE ALLOWANCE
TO ANOTHER TAXPAYER OF AN  INVESTMENT  TAX  CREDIT  OR  AN  EMPIRE  ZONE
INVESTMENT  TAX CREDIT UNDER THIS CHAPTER WITH RESPECT TO THE SAME PROP-
ERTY.
  (C) NONQUALIFYING PROPERTY. A TAXPAYER SHALL NOT BE ALLOWED  A  CREDIT
UNDER  THIS  SUBDIVISION  WITH RESPECT TO TANGIBLE PERSONAL PROPERTY AND
OTHER TANGIBLE PROPERTY, INCLUDING BUILDINGS AND  STRUCTURAL  COMPONENTS

S. 6359                            66                            A. 8559

OF  BUILDINGS,  WHICH  IT LEASES TO ANY OTHER PERSON OR CORPORATION. FOR
PURPOSES OF THE PRECEDING SENTENCE, ANY CONTRACT OR AGREEMENT  TO  LEASE
OR  RENT  OR  FOR  A  LICENSE TO USE SUCH PROPERTY SHALL BE CONSIDERED A
LEASE.    PROVIDED,  HOWEVER, IN DETERMINING WHETHER A TAXPAYER SHALL BE
ALLOWED A CREDIT UNDER THIS SUBDIVISION WITH RESPECT TO  SUCH  PROPERTY,
ANY  ELECTION  MADE  WITH  RESPECT  TO  SUCH  PROPERTY  PURSUANT  TO THE
PROVISIONS OF PARAGRAPH EIGHT OF SUBSECTION (F) OF SECTION  ONE  HUNDRED
SIXTY-EIGHT  OF  THE  INTERNAL  REVENUE  CODE,  AS SUCH PARAGRAPH WAS IN
EFFECT FOR AGREEMENTS ENTERED INTO  PRIOR  TO  JANUARY  FIRST,  NINETEEN
HUNDRED EIGHTY-FOUR, SHALL BE DISREGARDED.
  (D)  CARRYOVER.  EXCEPT  AS  OTHERWISE PROVIDED IN THIS PARAGRAPH, THE
CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY  TAXABLE  YEAR  SHALL  NOT
REDUCE  THE  TAX DUE FOR SUCH YEAR TO LESS THAN THE FIXED DOLLAR MINIMUM
AMOUNT PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION  ONE  OF  SECTION  TWO
HUNDRED  TEN OF THIS ARTICLE. HOWEVER, IF THE AMOUNT OF CREDIT ALLOWABLE
UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR  REDUCES  THE  TAX  TO  SUCH
AMOUNT,  ANY AMOUNT OF CREDIT ALLOWED FOR A TAXABLE YEAR AND NOT DEDUCT-
IBLE IN SUCH YEAR MAY BE CARRIED OVER TO THE FIFTEEN TAXABLE YEARS  NEXT
FOLLOWING  SUCH TAXABLE YEAR AND MAY BE DEDUCTED FROM THE TAXPAYER'S TAX
FOR SUCH YEAR OR YEARS. IN LIEU OF SUCH  CARRYOVER,  ANY  SUCH  TAXPAYER
WHICH  QUALIFIES  AS A NEW BUSINESS UNDER PARAGRAPH (F) OF THIS SUBDIVI-
SION MAY ELECT TO TREAT THE AMOUNT OF SUCH CARRYOVER 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.
  (E) RECAPTURE. (I) WITH  RESPECT  TO  PROPERTY  WHICH  IS  DEPRECIABLE
PURSUANT TO SECTION ONE HUNDRED SIXTY-SEVEN OF THE INTERNAL REVENUE CODE
BUT  IS NOT SUBJECT TO THE PROVISIONS OF SECTION ONE HUNDRED SIXTY-EIGHT
OF SUCH CODE AND WHICH IS DISPOSED OF OR CEASES TO BE IN  QUALIFIED  USE
PRIOR TO THE END OF THE TAXABLE YEAR IN WHICH THE CREDIT IS TO BE TAKEN,
THE  AMOUNT  OF  THE CREDIT SHALL BE THAT PORTION OF THE CREDIT PROVIDED
FOR IN THIS SUBDIVISION WHICH REPRESENTS THE RATIO WHICH THE  MONTHS  OF
QUALIFIED  USE  BEAR  TO THE MONTHS OF USEFUL LIFE. IF PROPERTY ON WHICH
CREDIT HAS BEEN TAKEN IS DISPOSED OF OR CEASES TO BE  IN  QUALIFIED  USE
PRIOR  TO  THE END OF ITS USEFUL LIFE, THE DIFFERENCE BETWEEN THE CREDIT
TAKEN AND THE CREDIT ALLOWED FOR ACTUAL USE MUST BE ADDED  BACK  IN  THE
YEAR  OF DISPOSITION. PROVIDED, HOWEVER, IF SUCH PROPERTY IS DISPOSED OF
OR CEASES TO BE IN QUALIFIED USE AFTER IT HAS BEEN IN QUALIFIED USE  FOR
MORE  THAN  TWELVE  CONSECUTIVE  YEARS, IT SHALL NOT BE NECESSARY TO ADD
BACK THE CREDIT AS PROVIDED IN THIS SUBPARAGRAPH. THE AMOUNT  OF  CREDIT
ALLOWED  FOR  ACTUAL USE SHALL BE DETERMINED BY MULTIPLYING THE ORIGINAL
CREDIT BY THE RATIO WHICH THE MONTHS OF QUALIFIED USE BEAR TO THE MONTHS
OF USEFUL LIFE. FOR PURPOSES OF THIS PARAGRAPH, USEFUL LIFE OF  PROPERTY
SHALL  BE  THE  SAME AS THE TAXPAYER USES FOR DEPRECIATION PURPOSES WHEN
COMPUTING HIS FEDERAL INCOME TAX LIABILITY.
  (II) EXCEPT WITH RESPECT TO THAT PROPERTY TO WHICH PARAGRAPH  (IV)  OF
THIS  SUBDIVISION  APPLIES,  WITH  RESPECT  TO  THREE-YEAR  PROPERTY, AS
DEFINED IN SUBSECTION (E) OF SECTION  ONE  HUNDRED  SIXTY-EIGHT  OF  THE
INTERNAL REVENUE CODE, WHICH IS DISPOSED OF OR CEASES TO BE IN QUALIFIED
USE  PRIOR  TO  THE END OF THE TAXABLE YEAR IN WHICH THE CREDIT IS TO BE
TAKEN, THE AMOUNT OF THE CREDIT ALLOWED SHALL BE  THAT  PORTION  OF  THE
CREDIT PROVIDED FOR IN THIS SUBDIVISION WHICH REPRESENTS THE RATIO WHICH
THE  MONTHS  OF  QUALIFIED  USE BEAR TO THIRTY-SIX. IF PROPERTY ON WHICH
CREDIT HAS BEEN TAKEN IS DISPOSED OF OR CEASES TO BE  IN  QUALIFIED  USE
PRIOR TO THE END OF THIRTY-SIX MONTHS, THE DIFFERENCE BETWEEN THE CREDIT

S. 6359                            67                            A. 8559

TAKEN  AND  THE  CREDIT ALLOWED FOR ACTUAL USE MUST BE ADDED BACK IN THE
YEAR OF DISPOSITION. THE AMOUNT OF CREDIT ALLOWED FOR ACTUAL  USE  SHALL
BE  DETERMINED BY MULTIPLYING THE ORIGINAL CREDIT BY THE RATIO WHICH THE
MONTHS OF QUALIFIED USE BEAR TO THIRTY-SIX.
  (III)  EXCEPT WITH RESPECT TO THAT PROPERTY TO WHICH PARAGRAPH (IV) OF
THIS SUBDIVISION APPLIES,  WITH  RESPECT  TO  PROPERTY  SUBJECT  TO  THE
PROVISIONS  OF  SECTION  ONE HUNDRED SIXTY-EIGHT OF THE INTERNAL REVENUE
CODE, OTHER THAN THREE-YEAR PROPERTY AS DEFINED  IN  SUBSECTION  (E)  OF
SUCH  SECTION  ONE HUNDRED SIXTY-EIGHT WHICH IS DISPOSED OF OR CEASES TO
BE IN QUALIFIED USE PRIOR TO THE END OF THE TAXABLE YEAR  IN  WHICH  THE
CREDIT IS TO BE TAKEN, THE AMOUNT OF THE CREDIT SHALL BE THAT PORTION OF
THE  CREDIT  PROVIDED FOR IN THIS SUBDIVISION WHICH REPRESENTS THE RATIO
WHICH THE MONTHS OF QUALIFIED USE BEAR TO SIXTY.  IF PROPERTY  ON  WHICH
CREDIT  HAS  BEEN  TAKEN IS DISPOSED OF OR CEASES TO BE IN QUALIFIED USE
PRIOR TO THE END OF SIXTY MONTHS,  THE  DIFFERENCE  BETWEEN  THE  CREDIT
TAKEN  AND  THE  CREDIT ALLOWED FOR ACTUAL USE MUST BE ADDED BACK IN THE
YEAR OF DISPOSITION. THE AMOUNT OF CREDIT ALLOWED FOR ACTUAL  USE  SHALL
BE  DETERMINED BY MULTIPLYING THE ORIGINAL CREDIT BY THE RATIO WHICH THE
MONTHS OF QUALIFIED USE BEAR TO SIXTY.
  (IV) WITH RESPECT TO ANY PROPERTY TO WHICH SECTION ONE HUNDRED  SIXTY-
EIGHT  OF  THE  INTERNAL  REVENUE CODE APPLIES, WHICH IS A BUILDING OR A
STRUCTURAL COMPONENT OF A BUILDING AND WHICH IS DISPOSED OF OR CEASES TO
BE IN QUALIFIED USE PRIOR TO THE END OF THE TAXABLE YEAR  IN  WHICH  THE
CREDIT IS TO BE TAKEN, THE AMOUNT OF THE CREDIT SHALL BE THAT PORTION OF
THE  CREDIT  PROVIDED FOR IN THIS SUBDIVISION WHICH REPRESENTS THE RATIO
WHICH THE MONTHS OF QUALIFIED USE BEAR TO THE  TOTAL  NUMBER  OF  MONTHS
OVER  WHICH THE TAXPAYER CHOOSES TO DEDUCT THE PROPERTY UNDER THE INTER-
NAL REVENUE CODE. IF PROPERTY ON WHICH CREDIT HAS BEEN TAKEN IS DISPOSED
OF OR CEASES TO BE IN QUALIFIED USE PRIOR TO THE END OF THE PERIOD  OVER
WHICH  THE  TAXPAYER  CHOOSES  TO DEDUCT THE PROPERTY UNDER THE INTERNAL
REVENUE CODE, THE DIFFERENCE BETWEEN THE CREDIT  TAKEN  AND  THE  CREDIT
ALLOWED  FOR  ACTUAL  USE MUST BE ADDED BACK IN THE YEAR OF DISPOSITION.
PROVIDED, HOWEVER, IF SUCH PROPERTY IS DISPOSED OF OR CEASES  TO  BE  IN
QUALIFIED  USE  AFTER  IT HAS BEEN IN QUALIFIED USE FOR MORE THAN TWELVE
CONSECUTIVE YEARS, IT SHALL NOT BE NECESSARY TO ADD BACK THE  CREDIT  AS
PROVIDED  IN  THIS SUBPARAGRAPH. THE AMOUNT OF CREDIT ALLOWED FOR ACTUAL
USE SHALL BE DETERMINED BY MULTIPLYING THE ORIGINAL CREDIT BY THE  RATIO
WHICH  THE  MONTHS  OF  QUALIFIED USE BEAR TO THE TOTAL NUMBER OF MONTHS
OVER WHICH THE TAXPAYER CHOOSES TO DEDUCT THE PROPERTY UNDER THE  INTER-
NAL REVENUE CODE.
  (V) FOR PURPOSES OF THIS PARAGRAPH, PROPERTY (I) WHICH IS DESCRIBED IN
SUBPARAGRAPH  (II),  (III)  OR (IV) OF THIS PARAGRAPH, AND (II) WHICH IS
SUBJECT TO SUBPARAGRAPH ELEVEN OF PARAGRAPH (A) OF SUBDIVISION NINE  AND
SUBPARAGRAPH  TEN  OF  PARAGRAPH  (B) OF SUBDIVISION NINE OF SECTION TWO
HUNDRED EIGHT OF THIS ARTICLE, SHALL BE TREATED  AS  PROPERTY  WHICH  IS
DEPRECIABLE  PURSUANT TO SECTION ONE HUNDRED SIXTY-SEVEN OF THE INTERNAL
REVENUE CODE BUT IS NOT SUBJECT TO SECTION ONE  HUNDRED  SIXTY-EIGHT  OF
SUCH CODE.
  (VI)  FOR  EACH  TAXABLE  YEAR,  THE  AMOUNT REQUIRED TO BE ADDED BACK
PURSUANT TO THIS PARAGRAPH SHALL BE AUGMENTED BY AN AMOUNT EQUAL TO  THE
PRODUCT  OF  SUCH  AMOUNT AND THE UNDERPAYMENT RATE OF INTEREST (WITHOUT
REGARD TO COMPOUNDING), SET BY THE COMMISSIONER PURSUANT  TO  SUBSECTION
(E) OF SECTION ONE THOUSAND NINETY-SIX, IN EFFECT ON THE LAST DAY OF THE
TAXABLE YEAR.
  (VII) IF, AS OF THE CLOSE OF THE TAXABLE YEAR, THERE IS A NET INCREASE
WITH  RESPECT  TO THE TAXPAYER IN THE AMOUNT OF NONQUALIFIED NONRECOURSE

S. 6359                            68                            A. 8559

FINANCING (WITHIN THE MEANING OF SECTION 46(C)(8) OF THE INTERNAL REVEN-
UE CODE) WITH RESPECT TO ANY PROPERTY WITH RESPECT TO WHICH  THE  CREDIT
UNDER  THIS  SUBDIVISION  WAS LIMITED BASED ON ATTRIBUTABLE NONQUALIFIED
NONRECOURSE  FINANCING,  THEN  AN  AMOUNT  EQUAL TO THE DECREASE IN SUCH
CREDIT WHICH WOULD HAVE RESULTED FROM REDUCING, BY THE  AMOUNT  OF  SUCH
NET INCREASE, THE COST OR OTHER BASIS TAKEN INTO ACCOUNT WITH RESPECT TO
SUCH  PROPERTY  MUST  BE  ADDED BACK IN SUCH TAXABLE YEAR. THE AMOUNT OF
NONQUALIFIED NONRECOURSE FINANCING SHALL NOT BE TREATED AS INCREASED  BY
REASON  OF  A  TRANSFER OF (OR AGREEMENT TO TRANSFER) ANY EVIDENCE OF AN
INDEBTEDNESS IF SUCH TRANSFER OCCURS (OR SUCH AGREEMENT IS ENTERED INTO)
MORE THAN ONE YEAR AFTER THE DATE SUCH INDEBTEDNESS WAS INCURRED.
  (VIII)(A) WHERE PROPERTY WITH RESPECT TO WHICH CREDIT HAS BEEN ALLOWED
UNDER THIS SUBDIVISION IS DISPOSED OF BY TRANSFER TO THE TAXPAYER  IN  A
QUALIFIED  TRANSACTION,  AND SUCH DISPOSITION REQUIRES, PURSUANT TO THIS
PARAGRAPH (WITHOUT REGARD TO THIS  SUBPARAGRAPH)  THAT  SUCH  CREDIT  BE
DECREASED (WHERE THE DISPOSITION OCCURS IN THE TAXABLE YEAR IN WHICH THE
PROPERTY  IS  PLACED  IN SERVICE BY THE TRANSFEROR) OR THAT A PORTION OF
SUCH CREDIT BE ADDED BACK BY THE TRANSFEROR, THEN CLAUSE (B)  OR  CLAUSE
(C) OF THIS SUBPARAGRAPH SHALL APPLY.
  (B) IF THE TAXPAYER AND THE TRANSFEROR JOINTLY ELECT, AT SUCH TIME AND
IN  SUCH  MANNER  AS THE COMMISSIONER MAY PRESCRIBE, THE FOLLOWING SHALL
APPLY:
  (I) SUCH PORTION SHALL NOT  BE  REQUIRED  TO  BE  ADDED  BACK  BY  THE
TRANSFEROR,
  (II) THE AMOUNT OF UNUSED CREDIT SHALL NOT BE DEDUCTED FROM TAX OTHER-
WISE  DUE BY THE TRANSFEROR ON ANY RETURN (INCLUDING AN AMENDED RETURN),
AND SHALL NOT BE SO DEDUCTED AS PART OF  ANY  AUDIT  ADJUSTMENT  OR  ANY
OTHER DETERMINATION, AND
  (III)  THE  AMOUNT  OF  UNUSED CREDIT SHALL BE TREATED AS AN AMOUNT OF
CREDIT OF THE TAXPAYER UNDER THIS SUBDIVISION  CARRIED  FORWARD  BY  THE
TAXPAYER  TO ITS TAXABLE YEAR IN WHICH SUCH TRANSFER OCCURRED, AS IF THE
CREDIT ALLOWED TO THE TRANSFEROR  WITH  RESPECT  TO  SUCH  PROPERTY  HAD
ORIGINALLY BEEN ALLOWED TO THE TAXPAYER BOTH AS TO AMOUNT AND FIRST DATE
OF  QUALIFIED USE, AND AS IF THE PERIOD OF QUALIFIED USE BY THE TRANSFE-
ROR PRIOR TO THE TRANSFER HAD BEEN A PERIOD OF SUCH USE BY THE TAXPAYER.
ANY AMOUNT OF CREDIT TREATED AS CARRIED  FORWARD  TO  THE  TAXABLE  YEAR
PURSUANT TO THIS SUBPARAGRAPH SHALL BE APPLIED AS PROVIDED IN CLAUSE (H)
OF THIS SUBPARAGRAPH.
  (C)  IF  THE  TAXPAYER  AND  THE  TRANSFEROR  DO NOT MAKE THE ELECTION
DESCRIBED IN CLAUSE (B) OF THIS SUBPARAGRAPH, THEN THE AMOUNT OF  CREDIT
REQUIRED  PURSUANT  TO THIS PARAGRAPH TO BE ADDED BACK BY THE TRANSFEROR
SHALL BE TREATED AS AN AMOUNT OF  CREDIT  OF  THE  TAXPAYER  UNDER  THIS
SUBDIVISION TO BE CARRIED FORWARD BY THE TAXPAYER TO ITS TAXABLE YEAR IN
WHICH SUCH TRANSFER OCCURRED, AS IF THE CREDIT ALLOWED TO THE TRANSFEROR
WITH RESPECT TO SUCH PROPERTY HAD ORIGINALLY BEEN ALLOWED TO THE TAXPAY-
ER  BOTH  AS  TO  AMOUNT  AND FIRST DATE OF QUALIFIED USE, AND AS IF THE
PERIOD OF QUALIFIED USE BY THE TRANSFEROR PRIOR TO THE TRANSFER HAD BEEN
A PERIOD OF SUCH USE BY THE TAXPAYER. ANY AMOUNT OF  CREDIT  TREATED  AS
CARRIED  FORWARD TO THE TAXABLE YEAR PURSUANT TO THIS SUBPARAGRAPH SHALL
BE APPLIED AS PROVIDED IN CLAUSE (H) OF THIS SUBPARAGRAPH.
  (D) THE TERM "QUALIFIED TRANSACTION" SHALL MEAN A TRANSACTION WHICH IS
A REORGANIZATION DESCRIBED  IN  SECTION  368(A)(1)(D)  OF  THE  INTERNAL
REVENUE  CODE,  WHEREIN  (I)  SUBSTANTIALLY  ALL  OF  THE  ASSETS OF THE
TRANSFEROR NECESSARY TO CONTINUE THE OPERATION OF A  DIVISION  OR  DIVI-
SIONS OF THE TRANSFEROR ARE TRANSFERRED TO THE TAXPAYER IN A TRANSACTION
TO  WHICH SECTION 351 OF SUCH CODE APPLIES, AND (II) STOCK OR SECURITIES

S. 6359                            69                            A. 8559

OF THE TAXPAYER HELD BY  THE  TRANSFEROR  ARE  DISTRIBUTED  PURSUANT  TO
SECTION 355 OF SUCH CODE.
  (E)  THE TERM "UNUSED CREDIT" SHALL MEAN THE AMOUNT OF CREDIT SHOWN AS
CARRIED FORWARD TO THE TRANSACTION YEAR ON THE TRANSFEROR'S  TAX  RETURN
FOR  ITS  TAXABLE  YEAR  IMMEDIATELY PRECEDING THE TRANSACTION YEAR WITH
RESPECT TO THE PROPERTY DESCRIBED IN CLAUSE (A) OF THIS SUBPARAGRAPH.
  (F) THE TERM "TRANSACTION YEAR" MEANS THE TAXABLE YEAR  IN  WHICH  THE
QUALIFIED TRANSACTION OCCURS.
  (G) NOTWITHSTANDING ANY OTHER PROVISION OF LAW TO THE CONTRARY, IN THE
CASE  OF ALLOWANCE OF CREDIT PURSUANT TO THIS SUBPARAGRAPH TO A TAXPAYER
THE COMMISSIONER SHALL HAVE THE AUTHORITY TO REVEAL TO THE TAXPAYER  ANY
INFORMATION,  WITH RESPECT TO THE CREDIT OF THE TRANSFEROR, WHICH IS THE
BASIS FOR THE DENIAL IN WHOLE OR IN PART OF THE CREDIT CLAIMED  BY  SUCH
TAXPAYER.
  (H)  WHERE A CREDIT IS ALLOWED TO A TAXPAYER PURSUANT TO THIS SUBPARA-
GRAPH, THE TAXPAYER MAY TREAT THE AMOUNT OF SUCH CREDIT AS  AN  OVERPAY-
MENT 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.  SUCH
CREDIT  SHALL  BE  ALLOWED  AGAINST THE TAX IMPOSED BY THIS ARTICLE WITH
RESPECT TO THE SECOND SUCCEEDING TAXABLE YEAR NEXT FOLLOWING THE  TRANS-
ACTION  YEAR,  PROVIDED  THAT  NOT MORE THAN ONE-FOURTH OF THE AMOUNT OF
SUCH CREDIT MAY BE APPLIED BY THE TAXPAYER, WHETHER TO REDUCE TAX OTHER-
WISE DUE OR TO BE TREATED AS AN OVERPAYMENT TO BE CREDITED OR  REFUNDED,
WITH RESPECT TO SUCH SECOND SUCCEEDING TAXABLE YEAR AND EACH OF THE NEXT
THREE TAXABLE YEARS FOLLOWING SUCH SECOND SUCCEEDING TAXABLE YEAR.
  (F) NEW BUSINESS. FOR PURPOSES OF PARAGRAPH (D) OF THIS SUBDIVISION, A
NEW BUSINESS SHALL INCLUDE ANY CORPORATION, EXCEPT A CORPORATION WHICH:
  (I)  OVER FIFTY PERCENT OF THE NUMBER OF SHARES OF STOCK ENTITLING THE
HOLDERS THEREOF TO VOTE FOR THE ELECTION OF  DIRECTORS  OR  TRUSTEES  IS
OWNED  OR  CONTROLLED,  EITHER  DIRECTLY  OR  INDIRECTLY,  BY A TAXPAYER
SUBJECT TO TAX UNDER THIS ARTICLE; SECTION ONE HUNDRED  EIGHTY-THREE  OR
ONE HUNDRED EIGHTY-FOUR OF ARTICLE NINE; OR ARTICLE THIRTY-THREE OF THIS
CHAPTER; OR
  (II) IS SUBSTANTIALLY SIMILAR IN OPERATION AND IN OWNERSHIP TO A BUSI-
NESS  ENTITY  (OR  ENTITIES)  TAXABLE, OR PREVIOUSLY TAXABLE, UNDER THIS
ARTICLE; SECTION ONE  HUNDRED  EIGHTY-THREE,  ONE  HUNDRED  EIGHTY-FOUR,
FORMER  SECTION  ONE  HUNDRED  EIGHTY-FIVE OR FORMER SECTION ONE HUNDRED
EIGHTY-SIX OF ARTICLE NINE; ARTICLE THIRTY-TWO OF THIS CHAPTER (AS  SUCH
ARTICLE  WAS IN EFFECT ON DECEMBER THIRTY-FIRST, TWO THOUSAND FOURTEEN);
ARTICLE THIRTY-THREE OF THIS CHAPTER; ARTICLE TWENTY-THREE OF THIS CHAP-
TER OR  WHICH  WOULD  HAVE  BEEN  SUBJECT  TO  TAX  UNDER  SUCH  ARTICLE
TWENTY-THREE  (AS  SUCH ARTICLE WAS IN EFFECT ON JANUARY FIRST, NINETEEN
HUNDRED EIGHTY) OR THE INCOME (OR LOSSES) OF WHICH IS (OR WAS)  INCLUDA-
BLE  UNDER  ARTICLE  TWENTY-TWO  OF  THIS CHAPTER WHEREBY THE INTENT AND
PURPOSE OF THIS PARAGRAPH AND PARAGRAPH (D)  OF  THIS  SUBDIVISION  WITH
RESPECT TO REFUNDING OF CREDIT TO NEW BUSINESS WOULD BE EVADED; OR
  (III) HAS BEEN SUBJECT TO TAX UNDER THIS ARTICLE OR UNDER FORMER ARTI-
CLE THIRTY-TWO OF THIS CHAPTER FOR MORE THAN FIVE TAXABLE YEARS (EXCLUD-
ING SHORT TAXABLE YEARS).
  2.  EMPLOYMENT  INCENTIVE  CREDIT (EIC). (A)(I) APPLICATION OF CREDIT.
WHERE A TAXPAYER IS ALLOWED A  CREDIT  UNDER  SUBDIVISION  ONE  OF  THIS
SECTION,  OTHER  THAN  AT  THE  OPTIONAL RATE APPLICABLE TO RESEARCH AND
DEVELOPMENT PROPERTY, THE TAXPAYER SHALL BE ALLOWED A CREDIT FOR EACH OF
THE TWO YEARS NEXT SUCCEEDING THE TAXABLE  YEAR  FOR  WHICH  THE  CREDIT

S. 6359                            70                            A. 8559

UNDER  SUCH  SUBDIVISION  ONE  IS ALLOWED WITH RESPECT TO SUCH PROPERTY,
WHETHER OR NOT DEDUCTIBLE IN SUCH TAXABLE YEAR OR IN SUBSEQUENT  TAXABLE
YEARS  PURSUANT  TO  PARAGRAPH  (D)  OF  SUCH SUBDIVISION ONE. PROVIDED,
HOWEVER,  THAT THE CREDIT ALLOWABLE UNDER THIS SUBDIVISION FOR ANY TAXA-
BLE YEAR SHALL BE ALLOWED ONLY IF THE AVERAGE NUMBER OF EMPLOYEES DURING
SUCH TAXABLE YEAR IS AT LEAST ONE HUNDRED ONE  PERCENT  OF  THE  AVERAGE
NUMBER OF EMPLOYEES DURING THE EMPLOYMENT BASE YEAR. THE EMPLOYMENT BASE
YEAR  SHALL  BE  THE TAXABLE YEAR IMMEDIATELY PRECEDING THE TAXABLE YEAR
FOR WHICH THE CREDIT UNDER SUCH SUBDIVISION ONE IS ALLOWED  EXCEPT  THAT
IF  THE  TAXPAYER WAS NOT SUBJECT TO TAX AND DID NOT HAVE A TAXABLE YEAR
IMMEDIATELY PRECEDING THE TAXABLE YEAR FOR WHICH THE CREDIT  UNDER  SUCH
SUBDIVISION  ONE  OF  THIS  SECTION IS ALLOWED, THE EMPLOYMENT BASE YEAR
SHALL BE THE TAXABLE YEAR IN WHICH THE CREDIT UNDER SUCH SUBDIVISION ONE
IS ALLOWED.
  (II) AMOUNT OF CREDIT. THE AMOUNT OF THE  CREDIT  ALLOWED  UNDER  THIS
SUBDIVISION SHALL BE AS SET FORTH IN THE FOLLOWING TABLE:
AVERAGE NUMBER OF EMPLOYEES DURING THE      CREDIT ALLOWED UNDER THIS
TAXABLE YEAR EXPRESSED AS A PERCENTAGE      SUBDIVISION EXPRESSED AS A
OF AVERAGE EMPLOYEES IN EMPLOYMENT          PERCENTAGE OF THE APPLICABLE
BASE YEARS                                  INVESTMENT CREDIT BASIS
LESS THAN 102%                              1.5%
AT LEAST 102% AND LESS THAN 103%            2%
AT LEAST 103%                               2.5%
  (B)  AVERAGE NUMBER OF EMPLOYEES. THE AVERAGE NUMBER OF EMPLOYEES IN A
TAXABLE YEAR SHALL BE COMPUTED BY ASCERTAINING THE NUMBER  OF  EMPLOYEES
WITHIN  THE  STATE,  EXCEPT  GENERAL EXECUTIVE OFFICERS, EMPLOYED BY THE
TAXPAYER ON THE THIRTY-FIRST DAY OF MARCH, THE THIRTIETH  DAY  OF  JUNE,
THE  THIRTIETH  DAY OF SEPTEMBER AND THE THIRTY-FIRST DAY OF DECEMBER IN
THE TAXABLE YEAR, BY ADDING TOGETHER THE NUMBER OF EMPLOYEES ASCERTAINED
ON EACH OF SUCH DATES AND DIVIDING THE SUM SO OBTAINED BY THE NUMBER  OF
SUCH  ABOVE  MENTIONED DATES OCCURRING WITHIN THE TAXABLE YEAR. HOWEVER,
WITH RESPECT TO THE EMPLOYMENT BASE YEAR, THERE SHALL BE EXCLUDED THERE-
FROM ANY EMPLOYEE WITH RESPECT TO  WHOM  A  CREDIT  PROVIDED  FOR  UNDER
SUBDIVISION  SIX OF THIS SECTION IS CLAIMED, FOR THE TAXABLE YEAR, BASED
ON EMPLOYMENT WITHIN A ZONE EQUIVALENT AREA DESIGNATED AS SUCH  PURSUANT
TO ARTICLE EIGHTEEN-B OF THE GENERAL MUNICIPAL LAW.
  (C)  CARRYOVER.  IN  NO  EVENT SHALL THE CREDIT HEREIN PROVIDED FOR BE
ALLOWED IN AN AMOUNT WHICH WILL REDUCE THE TAX PAYABLE TO LESS THAN  THE
FIXED  DOLLAR  MINIMUM AMOUNT PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION
ONE OF SECTION TWO HUNDRED TEN OF THIS ARTICLE. HOWEVER, IF  THE  AMOUNT
OF  CREDIT ALLOWABLE UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES
THE TAX TO SUCH AMOUNT, ANY AMOUNT OF  CREDIT  NOT  DEDUCTIBLE  IN  SUCH
TAXABLE YEAR MAY BE CARRIED OVER TO THE FIFTEEN TAXABLE YEARS IMMEDIATE-
LY  FOLLOWING  SUCH TAXABLE YEAR AND MAY BE DEDUCTED FROM THE TAXPAYER'S
TAX FOR SUCH YEAR OR YEARS.
  3. EMPIRE ZONE INVESTMENT TAX CREDIT (EZ-ITC). (A) A TAXPAYER SHALL BE
ALLOWED A CREDIT, TO BE COMPUTED AS HEREIN  PROVIDED,  AGAINST  THE  TAX
IMPOSED  BY  THIS ARTICLE IF THE TAXPAYER HAS BEEN CERTIFIED PURSUANT TO
ARTICLE EIGHTEEN-B OF THE GENERAL MUNICIPAL LAW. THE AMOUNT OF THE CRED-
IT SHALL BE TEN PERCENT OF THE COST OR OTHER BASIS  FOR  FEDERAL  INCOME
TAX  PURPOSES OF TANGIBLE PERSONAL PROPERTY AND OTHER TANGIBLE PROPERTY,
INCLUDING BUILDINGS AND STRUCTURAL COMPONENTS OF BUILDINGS, DESCRIBED IN
PARAGRAPH (B) OF THIS SUBDIVISION, WHICH IS  LOCATED  WITHIN  AN  EMPIRE
ZONE  DESIGNATED AS SUCH PURSUANT TO ARTICLE EIGHTEEN-B OF SUCH LAW, BUT
ONLY IF THE ACQUISITION, CONSTRUCTION,  RECONSTRUCTION  OR  ERECTION  OF
SUCH  PROPERTY  OCCURRED  OR  WAS COMMENCED ON OR AFTER THE DATE OF SUCH

S. 6359                            71                            A. 8559

DESIGNATION AND PRIOR TO THE EXPIRATION THEREOF. PROVIDED, HOWEVER, THAT
IN THE CASE OF AN ACQUISITION, CONSTRUCTION, RECONSTRUCTION OR  ERECTION
WHICH WAS COMMENCED DURING SUCH PERIOD AND CONTINUED OR COMPLETED SUBSE-
QUENTLY,  SUCH CREDIT SHALL BE TEN PERCENT OF THE PORTION OF THE COST OR
OTHER BASIS FOR FEDERAL INCOME TAX PURPOSES ATTRIBUTABLE TO SUCH PERIOD,
WHICH PORTION SHALL BE ASCERTAINED BY MULTIPLYING SUCH COST OR BASIS  BY
A  FRACTION  THE  NUMERATOR  OF  WHICH SHALL BE THE EXPENDITURES PAID OR
INCURRED DURING SUCH PERIOD FOR SUCH PURPOSES  AND  THE  DENOMINATOR  OF
WHICH  SHALL  BE THE TOTAL OF ALL EXPENDITURES PAID OR INCURRED FOR SUCH
ACQUISITION, CONSTRUCTION, RECONSTRUCTION OR ERECTION.
  (B) QUALIFIED PROPERTY. A CREDIT SHALL BE ALLOWED UNDER THIS  SUBDIVI-
SION WITH RESPECT TO TANGIBLE PERSONAL PROPERTY AND OTHER TANGIBLE PROP-
ERTY, INCLUDING BUILDINGS AND STRUCTURAL COMPONENTS OF BUILDINGS, WHICH
  (I) ARE DEPRECIABLE PURSUANT TO SECTION ONE HUNDRED SIXTY-SEVEN OF THE
INTERNAL REVENUE CODE,
  (II) HAVE A USEFUL LIFE OF FOUR YEARS OR MORE,
  (III)  ARE  ACQUIRED  BY  PURCHASE  AS  DEFINED IN SECTION ONE HUNDRED
SEVENTY-NINE (D) OF THE INTERNAL REVENUE CODE,
  (IV) HAVE A SITUS IN AN EMPIRE ZONE DESIGNATED  AS  SUCH  PURSUANT  TO
ARTICLE EIGHTEEN-B OF THE GENERAL MUNICIPAL LAW, AND
  (V)  ARE  (A)  PRINCIPALLY  USED  BY THE TAXPAYER IN THE PRODUCTION OF
GOODS  BY  MANUFACTURING,  PROCESSING,  ASSEMBLING,  REFINING,   MINING,
EXTRACTING,  FARMING,  AGRICULTURE, HORTICULTURE, FLORICULTURE, VITICUL-
TURE 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,
  (E-1)  PRINCIPALLY USED IN THE ORDINARY COURSE OF THE TAXPAYER'S TRADE
OR BUSINESS OF PROVIDING INVESTMENT ADVISORY SERVICES OR THE SERVICE  OF
MANAGING INVESTMENT PORTFOLIOS TO ACHIEVE SPECIFIC INVESTMENT OBJECTIVES
FOR  ACCOUNTS  OVER ONE MILLION DOLLARS OF ACCREDITED INVESTORS (AS THAT
TERM IS DEFINED IN RULE 501 OF REGULATION D OF  THE  SECURITIES  ACT  OF
1933), IF THE TAXPAYER SATISFIES THE FOLLOWING CRITERIA:
  (I)  THE TAXPAYER IS A REGULATED BROKER OR DEALER OR AN AFFILIATE OF A
REGULATED BROKER OR DEALER,
  (II) THE TAXPAYER IS REGISTERED AS AN INVESTMENT ADVISER UNDER SECTION
TWO HUNDRED THREE OF THE INVESTMENT ADVISERS ACT OF  1940,  AS  AMENDED,
AND

S. 6359                            72                            A. 8559

  (III)  AT  LEAST  ONE CLIENT OF THE TAXPAYER IS A REGULATED INVESTMENT
COMPANY AS DEFINED IN SECTION EIGHT HUNDRED FIFTY-ONE  OF  THE  INTERNAL
REVENUE CODE THAT HAS ASSETS OF ONE HUNDRED MILLION DOLLARS, OR
  (F) PRINCIPALLY USED IN THE ORDINARY COURSE OF THE TAXPAYER'S BUSINESS
AS  AN  EXCHANGE REGISTERED AS A NATIONAL SECURITIES EXCHANGE WITHIN THE
MEANING OF SECTIONS 3(A)(1) AND 6(A) OF THE SECURITIES EXCHANGE  ACT  OF
1934  OR A BOARD OF TRADE AS DEFINED IN SUBDIVISION ONE OF PARAGRAPH (A)
OF SECTION FOURTEEN HUNDRED TEN OF THE NOT-FOR-PROFIT CORPORATION LAW OR
AS AN ENTITY THAT IS WHOLLY OWNED BY ONE OR MORE SUCH  NATIONAL  SECURI-
TIES  EXCHANGES OR BOARDS OR TRADE AND THAT PROVIDES AUTOMATION OR TECH-
NICAL SERVICES THERETO.
  (VI) FOR PURPOSES OF CLAUSES (D), (E), (E-1) AND (F)  OF  SUBPARAGRAPH
(V)  OF THIS PARAGRAPH, 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 OR 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), (E) AND (E-1) OF SUBPARA-
GRAPH  (V) OF THIS PARAGRAPH MAY BE AGGREGATED. IN ADDITION, THE USES BY
THE TAXPAYER, ITS AFFILIATED REGULATED  BROKER,  DEALER  AND  REGISTERED
INVESTMENT  ADVISER  UNDER  ANY  OF  THOSE  CLAUSES  MAY  BE AGGREGATED.
PROVIDED, HOWEVER, A TAXPAYER SHALL NOT BE ALLOWED THE  CREDIT  PROVIDED
BY CLAUSES (D), (E), (E-1) AND (F) OF SUBPARAGRAPH (V) OF THIS PARAGRAPH
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  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 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 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 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.
  (VII) FOR THE PURPOSES OF CLAUSE (III) OF SUBPARAGRAPH  (VI)  OF  THIS
PARAGRAPH  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

S. 6359                            73                            A. 8559

REGULATED BROKER, DEALER, AND REGISTERED INVESTMENT  ADVISER  USING  THE
PROPERTY.
  (VIII) FOR THE PURPOSE OF THIS SUBDIVISION, THE TERM "GOODS" SHALL NOT
INCLUDE ELECTRICITY.
  (IX)  FOR PURPOSES OF THIS SUBDIVISION, "MANUFACTURING" SHALL MEAN THE
PROCESS OF WORKING RAW MATERIALS INTO WARES SUITABLE FOR  USE  OR  WHICH
GIVES  NEW  SHAPES,  NEW  QUALITY  OR  NEW  COMBINATIONS TO MATTER WHICH
ALREADY HAS GONE THROUGH SOME ARTIFICIAL PROCESS BY THE USE  OF  MACHIN-
ERY, TOOLS, APPLIANCES AND OTHER SIMILAR EQUIPMENT. PROPERTY USED IN THE
PRODUCTION OF GOODS SHALL INCLUDE MACHINERY, EQUIPMENT OR OTHER TANGIBLE
PROPERTY  WHICH  IS  PRINCIPALLY USED IN THE REPAIR AND SERVICE OF OTHER
MACHINERY, EQUIPMENT OR OTHER TANGIBLE PROPERTY USED PRINCIPALLY IN  THE
PRODUCTION  OF  GOODS  AND  SHALL  INCLUDE  ALL  FACILITIES  USED IN THE
PRODUCTION OPERATION, INCLUDING  STORAGE  OF  MATERIAL  TO  BE  USED  IN
PRODUCTION  AND  OF THE PRODUCTS THAT ARE PRODUCED. FOR PURPOSES OF THIS
SUBDIVISION, THE TERMS "RESEARCH AND DEVELOPMENT PROPERTY",  "INDUSTRIAL
WASTE  TREATMENT  FACILITIES",  AND  "AIR  POLLUTION CONTROL FACILITIES"
SHALL HAVE THE MEANINGS ASCRIBED THERETO BY CLAUSES (B),  (C)  AND  (D),
RESPECTIVELY,  OF  SUBPARAGRAPH (IV) OF PARAGRAPH (B) OF SUBDIVISION ONE
OF THIS SECTION, AND THE PROVISIONS OF SUBPARAGRAPH (V)  OF  SUCH  PARA-
GRAPH (B) SHALL APPLY.
  (C)  NONQUALIFIED  PROPERTY.  A TAXPAYER SHALL NOT BE ALLOWED A CREDIT
UNDER THIS SUBDIVISION WITH RESPECT TO ANY  TANGIBLE  PERSONAL  PROPERTY
AND  OTHER  TANGIBLE PROPERTY, INCLUDING BUILDINGS AND STRUCTURAL COMPO-
NENTS OF BUILDINGS, WHICH IT LEASES TO ANY OTHER PERSON  OR  CORPORATION
EXCEPT  WHERE  A  TAXPAYER  LEASES  PROPERTY  TO AN AFFILIATED REGULATED
BROKER,  DEALER,  REGISTERED  INVESTMENT  ADVISER,  NATIONAL  SECURITIES
EXCHANGE  OR  BOARD  OF TRADE OR OTHER ENTITY DESCRIBED IN CLAUSE (F) OF
SUBPARAGRAPH (V) OF PARAGRAPH (B) OF THIS  SUBDIVISION  THAT  USES  SUCH
PROPERTY  IN  ACCORDANCE  WITH CLAUSE (D), (E), (E-1) OR (F) OF SUBPARA-
GRAPH (V) OF PARAGRAPH (B) OF THIS  SUBDIVISION.  FOR  PURPOSES  OF  THE
PRECEDING  SENTENCE, ANY CONTRACT OR AGREEMENT TO LEASE OR RENT OR FOR A
LICENSE TO USE SUCH PROPERTY SHALL BE CONSIDERED  A  LEASE.    PROVIDED,
HOWEVER,  IN  DETERMINING  WHETHER  A TAXPAYER SHALL BE ALLOWED A CREDIT
UNDER THIS SUBDIVISION WITH RESPECT TO SUCH PROPERTY, ANY ELECTION  MADE
WITH  RESPECT  TO  SUCH PROPERTY PURSUANT TO THE PROVISIONS OF PARAGRAPH
EIGHT OF SUBSECTION (F) OF SECTION ONE HUNDRED SIXTY-EIGHT OF THE INTER-
NAL REVENUE CODE, AS SUCH PARAGRAPH WAS IN EFFECT FOR AGREEMENTS ENTERED
INTO PRIOR TO JANUARY FIRST,  NINETEEN  HUNDRED  EIGHTY-FOUR,  SHALL  BE
DISREGARDED.
  (D) CARRYOVER. THE CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXA-
BLE  YEAR  SHALL  NOT  REDUCE THE TAX DUE FOR SUCH YEAR TO LESS THAN THE
FIXED DOLLAR MINIMUM AMOUNT PRESCRIBED IN PARAGRAPH (D)  OF  SUBDIVISION
ONE  OF SECTION TWO HUNDRED TEN OF THIS ARTICLE. PROVIDED, HOWEVER, THAT
IF THE AMOUNT OF CREDIT ALLOWED UNDER THIS SUBDIVISION FOR  ANY  TAXABLE
YEAR REDUCES THE TAX TO SUCH AMOUNT, ANY AMOUNT OF CREDIT NOT DEDUCTIBLE
IN  SUCH TAXABLE YEAR MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS
AND MAY BE DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR  YEARS.  IN
LIEU OF SUCH CARRYOVER, ANY SUCH TAXPAYER WHICH QUALIFIES AS A NEW BUSI-
NESS  UNDER  PARAGRAPH (F) OF SUBDIVISION ONE OF THIS SECTION MAY ELECT,
ON ITS REPORT FOR ITS TAXABLE YEAR WITH RESPECT TO WHICH SUCH CREDIT  IS
ALLOWED,  TO  TREAT  FIFTY PERCENT OF THE AMOUNT OF SUCH CARRYOVER AS AN
OVERPAYMENT OF TAX TO BE CREDITED OR REFUNDED  IN  ACCORDANCE  WITH  THE
PROVISIONS  OF SECTION ONE THOUSAND EIGHTY-SIX OF THIS CHAPTER. IN ADDI-
TION, ANY TAXPAYER WHICH IS APPROVED AS THE OWNER OF A QUALIFIED INVEST-
MENT PROJECT OR A SIGNIFICANT CAPITAL  INVESTMENT  PROJECT  PURSUANT  TO

S. 6359                            74                            A. 8559

SUBDIVISION (W) OF SECTION NINE HUNDRED FIFTY-NINE OF THE GENERAL MUNIC-
IPAL  LAW, ON ITS REPORT FOR ITS TAXABLE YEAR WITH RESPECT TO WHICH SUCH
CREDIT IS ALLOWED, IN LIEU OF SUCH CARRYOVER, MAY ELECT TO  TREAT  FIFTY
PERCENT  OF  THE  AMOUNT  OF SUCH CARRYOVER WHICH IS ATTRIBUTABLE TO THE
CREDIT ALLOWED UNDER THIS SUBDIVISION FOR PROPERTY WHICH IS PART OF SUCH
PROJECT AS AN OVERPAYMENT OF TAX TO BE CREDITED OR REFUNDED  IN  ACCORD-
ANCE  WITH  THE  PROVISIONS  OF  SECTION ONE THOUSAND EIGHTY-SIX OF THIS
CHAPTER. PROVIDED, HOWEVER, SUCH OWNER SHALL BE ALLOWED SUCH REFUND  FOR
A MAXIMUM OF TEN TAXABLE YEARS WITH RESPECT TO SUCH QUALIFIED INVESTMENT
PROJECT  AND  EACH SIGNIFICANT CAPITAL INVESTMENT PROJECT, STARTING WITH
THE FIRST TAXABLE YEAR IN WHICH  PROPERTY  COMPRISING  SUCH  PROJECT  IS
PLACED  IN  SERVICE.  PROVIDED,  FURTHER,  HOWEVER,  THE  PROVISIONS  OF
SUBSECTION (C) OF SECTION ONE  THOUSAND  EIGHTY-EIGHT  OF  THIS  CHAPTER
NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
  (D-1)  ANY  CARRYOVER OF A CREDIT FROM PRIOR TAXABLE YEARS WILL NOT BE
ALLOWED IF AN EMPIRE ZONE RETENTION CERTIFICATE IS NOT  ISSUED  PURSUANT
TO  SUBDIVISION  (W)  OF  SECTION NINE HUNDRED FIFTY-NINE OF THE GENERAL
MUNICIPAL LAW TO THE EMPIRE ZONE ENTERPRISE WHICH IS THE  BASIS  OF  THE
CREDIT.
  (E)  AT  THE  OPTION OF THE TAXPAYER, THE TAXPAYER MAY CHOOSE TO CLAIM
THE CREDIT DESCRIBED IN PARAGRAPH (A) OF THIS SUBDIVISION  FOR  PROPERTY
WHICH  ALSO  QUALIFIES  FOR THE CREDIT PROVIDED UNDER SUBDIVISION ONE OF
THIS SECTION. A TAXPAYER SHALL NOT BE ALLOWED A CREDIT UNDER THIS SUBDI-
VISION WITH RESPECT TO ANY PROPERTY DESCRIBED IN PARAGRAPH (A)  OF  THIS
SUBDIVISION  IF  A  CREDIT  IS TAKEN PURSUANT TO SUBDIVISION ONE OF THIS
SECTION.
  (F) RECAPTURE. (I) WITH  RESPECT  TO  PROPERTY  WHICH  IS  DEPRECIABLE
PURSUANT TO SECTION ONE HUNDRED SIXTY-SEVEN OF THE INTERNAL REVENUE CODE
BUT  IS NOT SUBJECT TO THE PROVISIONS OF SECTION ONE HUNDRED SIXTY-EIGHT
OF SUCH CODE AND WHICH IS DISPOSED OF OR CEASES TO BE IN  QUALIFIED  USE
PRIOR TO THE END OF THE TAXABLE YEAR IN WHICH THE CREDIT IS TO BE TAKEN,
THE  AMOUNT  OF  THE CREDIT SHALL BE THAT PORTION OF THE CREDIT PROVIDED
FOR IN THIS SUBDIVISION WHICH REPRESENTS THE RATIO WHICH THE  MONTHS  OF
QUALIFIED  USE  BEAR  TO THE MONTHS OF USEFUL LIFE. IF PROPERTY ON WHICH
CREDIT HAS BEEN TAKEN IS DISPOSED OF OR CEASES TO BE  IN  QUALIFIED  USE
PRIOR  TO  THE END OF ITS USEFUL LIFE, THE DIFFERENCE BETWEEN THE CREDIT
TAKEN AND THE CREDIT ALLOWED FOR ACTUAL USE MUST BE ADDED  BACK  IN  THE
YEAR  OF DISPOSITION. PROVIDED, HOWEVER, IF SUCH PROPERTY IS DISPOSED OF
OR CEASES TO BE IN QUALIFIED USE AFTER IT HAS BEEN IN QUALIFIED USE  FOR
MORE  THAN  TWELVE  CONSECUTIVE  YEARS, IT SHALL NOT BE NECESSARY TO ADD
BACK THE CREDIT AS PROVIDED IN THIS SUBPARAGRAPH. THE AMOUNT  OF  CREDIT
ALLOWED  FOR  ACTUAL USE SHALL BE DETERMINED BY MULTIPLYING THE ORIGINAL
CREDIT BY THE RATIO WHICH THE MONTHS OF QUALIFIED USE BEAR TO THE MONTHS
OF USEFUL LIFE. FOR PURPOSES OF THIS SUBPARAGRAPH, USEFUL LIFE OF  PROP-
ERTY  SHALL  BE  THE SAME AS THE TAXPAYER USES FOR DEPRECIATION PURPOSES
WHEN COMPUTING HIS FEDERAL INCOME TAX LIABILITY.
  (II) EXCEPT WITH RESPECT TO THAT PROPERTY TO WHICH  SUBPARAGRAPH  (IV)
OF  THIS  PARAGRAPH  APPLIES,  WITH  RESPECT  TO THREE-YEAR PROPERTY, AS
DEFINED IN SUBSECTION (E) OF SECTION  ONE  HUNDRED  SIXTY-EIGHT  OF  THE
INTERNAL REVENUE CODE, WHICH IS DISPOSED OF OR CEASES TO BE IN QUALIFIED
USE  PRIOR  TO  THE END OF THE TAXABLE YEAR IN WHICH THE CREDIT IS TO BE
TAKEN, THE AMOUNT OF THE CREDIT SHALL BE  THAT  PORTION  OF  THE  CREDIT
PROVIDED  FOR  IN  THIS SUBDIVISION WHICH REPRESENTS THE RATIO WHICH THE
MONTHS OF QUALIFIED USE BEAR TO THIRTY-SIX. IF PROPERTY ON WHICH  CREDIT
HAS  BEEN TAKEN IS DISPOSED OF OR CEASES TO BE IN QUALIFIED USE PRIOR TO
THE END OF THIRTY-SIX MONTHS, THE DIFFERENCE BETWEEN  THE  CREDIT  TAKEN

S. 6359                            75                            A. 8559

AND  THE CREDIT ALLOWED FOR ACTUAL USE MUST BE ADDED BACK IN THE YEAR OF
DISPOSITION. THE AMOUNT OF CREDIT ALLOWED FOR ACTUAL USE SHALL BE DETER-
MINED BY MULTIPLYING THE ORIGINAL CREDIT BY THE RATIO WHICH  THE  MONTHS
OF QUALIFIED USE BEAR TO THIRTY-SIX.
  (III)  EXCEPT WITH RESPECT TO THAT PROPERTY TO WHICH SUBPARAGRAPH (IV)
OF THIS PARAGRAPH APPLIES, WITH  RESPECT  TO  PROPERTY  SUBJECT  TO  THE
PROVISIONS  OF  SECTION  ONE HUNDRED SIXTY-EIGHT OF THE INTERNAL REVENUE
CODE OTHER THAN THREE-YEAR PROPERTY AS DEFINED IN SUBSECTION (E) OF SUCH
SECTION ONE HUNDRED SIXTY-EIGHT WHICH IS DISPOSED OF OR CEASES TO BE  IN
QUALIFIED  USE  PRIOR TO THE END OF THE TAXABLE YEAR IN WHICH THE CREDIT
IS TO BE TAKEN, THE AMOUNT OF THE CREDIT SHALL BE THAT  PORTION  OF  THE
CREDIT PROVIDED FOR IN THIS SUBDIVISION WHICH REPRESENTS THE RATIO WHICH
THE  MONTHS  OF QUALIFIED USE BEAR TO SIXTY. IF PROPERTY ON WHICH CREDIT
HAS BEEN TAKEN IS DISPOSED OF OR CEASES TO BE IN QUALIFIED USE PRIOR  TO
THE END OF SIXTY MONTHS, THE DIFFERENCE BETWEEN THE CREDIT TAKEN AND THE
CREDIT ALLOWED FOR ACTUAL USE MUST BE ADDED BACK IN THE YEAR OF DISPOSI-
TION. THE AMOUNT OF CREDIT ALLOWED FOR ACTUAL USE SHALL BE DETERMINED BY
MULTIPLYING  THE ORIGINAL CREDIT BY THE RATIO WHICH THE MONTHS OF QUALI-
FIED USE BEAR TO SIXTY.
  (IV) WITH RESPECT TO ANY PROPERTY TO WHICH SECTION ONE HUNDRED  SIXTY-
EIGHT  OF  THE  INTERNAL  REVENUE CODE APPLIES, WHICH IS A BUILDING OR A
STRUCTURAL COMPONENT OF A BUILDING AND WHICH IS DISPOSED OF OR CEASES TO
BE IN QUALIFIED USE PRIOR TO THE END OF THE TAXABLE YEAR  IN  WHICH  THE
CREDIT IS TO BE TAKEN, THE AMOUNT OF THE CREDIT SHALL BE THAT PORTION OF
THE  CREDIT  PROVIDED FOR IN THIS SUBDIVISION WHICH REPRESENTS THE RATIO
WHICH THE MONTHS OF QUALIFIED USE BEAR TO THE  TOTAL  NUMBER  OF  MONTHS
OVER  WHICH THE TAXPAYER CHOOSES TO DEDUCT THE PROPERTY UNDER THE INTER-
NAL REVENUE CODE. IF PROPERTY ON WHICH CREDIT HAS BEEN TAKEN IS DISPOSED
OF OR CEASES TO BE IN QUALIFIED USE PRIOR TO THE END OF THE PERIOD  OVER
WHICH  THE  TAXPAYER  CHOOSES  TO DEDUCT THE PROPERTY UNDER THE INTERNAL
REVENUE CODE, THE DIFFERENCE BETWEEN THE CREDIT  TAKEN  AND  THE  CREDIT
ALLOWED  FOR  ACTUAL  USE MUST BE ADDED BACK IN THE YEAR OF DISPOSITION.
PROVIDED, HOWEVER, IF SUCH PROPERTY IS DISPOSED OF OR CEASES  TO  BE  IN
QUALIFIED  USE  AFTER  IT HAS BEEN IN QUALIFIED USE FOR MORE THAN TWELVE
CONSECUTIVE YEARS, IT SHALL NOT BE NECESSARY TO ADD BACK THE  CREDIT  AS
PROVIDED  IN  THIS SUBPARAGRAPH. THE AMOUNT OF CREDIT ALLOWED FOR ACTUAL
USE SHALL BE DETERMINED BY MULTIPLYING THE ORIGINAL CREDIT BY THE  RATIO
WHICH  THE  MONTHS  OF  QUALIFIED USE BEAR TO THE TOTAL NUMBER OF MONTHS
OVER WHICH THE TAXPAYER CHOOSES TO DEDUCT THE PROPERTY UNDER THE  INTER-
NAL REVENUE CODE.
  (V) FOR PURPOSES OF THIS PARAGRAPH, DISPOSAL OR CESSATION OF QUALIFIED
USE  SHALL NOT BE DEEMED TO HAVE OCCURRED SOLELY BY REASON OF THE TERMI-
NATION OR EXPIRATION OF AN EMPIRE ZONE'S DESIGNATION AS SUCH.
  (VI)(A) FOR PURPOSES OF THIS PARAGRAPH, THE DECERTIFICATION OF A BUSI-
NESS ENTERPRISE WITH RESPECT  TO  AN  EMPIRE  ZONE  SHALL  CONSTITUTE  A
DISPOSAL  OR  CESSATION  OF  QUALIFIED  USE OF THE PROPERTY ON WHICH THE
CREDIT WAS TAKEN WHICH IS LOCATED IN THE ZONE  TO  WHICH  THE  DECERTIF-
ICATION APPLIES, ON THE EFFECTIVE DATE OF SUCH DECERTIFICATION.
  (B)  WHERE A BUSINESS ENTERPRISE HAS BEEN DECERTIFIED BASED ON A FIND-
ING PURSUANT TO CLAUSE ONE, TWO, OR FIVE OF SUBDIVISION (A)  OF  SECTION
NINE  HUNDRED  FIFTY-NINE  OF  THE  GENERAL  MUNICIPAL  LAW,  THE AMOUNT
REQUIRED TO BE ADDED BACK BY REASON OF THIS PARAGRAPH SHALL BE  (I)  THE
AMOUNT  OF  CREDIT, WITH RESPECT TO THE PROPERTY WHICH IS DISPOSED OF OR
CEASES TO BE IN QUALIFIED USE, WHICH WAS DEDUCTED  FROM  THE  TAXPAYER'S
TAX  OTHERWISE  DUE  UNDER  THIS  ARTICLE  FOR  ALL PRIOR TAXABLE YEARS,
REDUCED (BUT NOT BELOW ZERO) BY (II) THE CREDIT ALLOWED FOR ACTUAL  USE.

S. 6359                            76                            A. 8559

FOR  PURPOSES OF THIS SUBPARAGRAPH, THE ATTRIBUTION TO SPECIFIC PROPERTY
OF CREDIT AMOUNTS DEDUCTED FROM TAX SHALL BE ESTABLISHED  IN  ACCORDANCE
WITH  THE  DATE  OF  PLACEMENT IN SERVICE OF SUCH PROPERTY IN THE EMPIRE
ZONE.
  (C)  IN  NO  EVENT  SHALL THE AMOUNT OF THE CREDIT ALLOWED PURSUANT TO
THIS SUBDIVISION BE RENDERED, SOLELY BY REASON OF  CLAUSE  (A)  OF  THIS
SUBPARAGRAPH,  LESS  THAN THE AMOUNT OF THE CREDIT TO WHICH THE TAXPAYER
WOULD OTHERWISE BE ENTITLED UNDER SUBDIVISION ONE OF THIS SECTION.
  (D) NOTWITHSTANDING ANY OTHER PROVISION OF THIS  SUBDIVISION,  IN  THE
CASE  OF A BUSINESS ENTERPRISE WHICH HAS BEEN DECERTIFIED, ANY AMOUNT OF
CREDIT ALLOWED WITH RESPECT TO THE PROPERTY OF SUCH BUSINESS  ENTERPRISE
LOCATED  IN  THE  ZONE  TO  WHICH  THE  DECERTIFICATION APPLIES WHICH IS
CARRIED OVER PURSUANT TO PARAGRAPH (D) OF THIS SUBDIVISION SHALL NOT  BE
CARRIED  OVER BEYOND THE SEVENTH TAXABLE YEAR NEXT FOLLOWING THE TAXABLE
YEAR WITH RESPECT TO WHICH THE CREDIT PROVIDED FOR IN  THIS  SUBDIVISION
WAS ALLOWED.
  (VII)  FOR  PURPOSES OF THIS PARAGRAPH, WHERE A CREDIT IS ALLOWED WITH
RESPECT TO AN AIR POLLUTION CONTROL FACILITY ON THE BASIS OF  A  CERTIF-
ICATE  OF  COMPLIANCE  ISSUED PURSUANT TO THE ENVIRONMENTAL CONSERVATION
LAW AND THE CERTIFICATE IS REVOKED  PURSUANT  TO  SUBDIVISION  THREE  OF
SECTION  19-0309  OF THE ENVIRONMENTAL CONSERVATION LAW, SUCH REVOCATION
SHALL CONSTITUTE A DISPOSAL OR CESSATION OF QUALIFIED USE,  EXCEPT  WITH
RESPECT  TO  PROPERTY  CONTAINED IN OR COMPRISING SUCH FACILITY WHICH IS
DESCRIBED IN CLAUSE (A), (B), OR (C) OF SUBPARAGRAPH  (V)  OF  PARAGRAPH
(B)  OF  THIS  SUBDIVISION  OTHER  THAN  AS PART OF OR COMPRISING AN AIR
POLLUTION CONTROL FACILITY. ALSO FOR PURPOSES OF THIS PARAGRAPH, THE USE
OF AN AIR POLLUTION CONTROL FACILITY OR AN  INDUSTRIAL  WASTE  TREATMENT
FACILITY FOR THE PRIMARY PURPOSE OF SALVAGING MATERIALS WHICH ARE USABLE
IN THE MANUFACTURING PROCESS OR ARE MARKETABLE SHALL CONSTITUTE A CESSA-
TION  OF  QUALIFIED USE, EXCEPT WITH RESPECT TO PROPERTY CONTAINED IN OR
COMPRISING SUCH FACILITY WHICH IS DESCRIBED IN  CLAUSE  (A)  OR  (C)  OF
SUBPARAGRAPH (V) OF PARAGRAPH (B) OF THIS SUBDIVISION.
  (VIII)  EXCEPT  AS PROVIDED IN THIS SUBPARAGRAPH, THIS PARAGRAPH SHALL
NOT APPLY TO A CREDIT ALLOWED BY THIS SUBDIVISION TO A TAXPAYER THAT  IS
A  PARTNER  IN  A  PARTNERSHIP  IN  THE  CASE OF MANUFACTURING PROPERTY;
PROVIDED, AT THE TIME SUCH PROPERTY WAS PLACED IN SERVICE BY SUCH  PART-
NERSHIP  IN AN EMPIRE ZONE THE BASIS FOR FEDERAL INCOME TAX PURPOSES FOR
SUCH PROPERTY (OR A PROJECT THAT  INCLUDES  SUCH  PROPERTY)  EQUALED  OR
EXCEEDED  THREE HUNDRED MILLION DOLLARS AND SUCH PARTNER OWNED ITS PART-
NERSHIP INTEREST FOR AT LEAST THREE YEARS FROM THE  DATE  SUCH  PROPERTY
WAS  PLACED  IN  SERVICE. IF SUCH PROPERTY CEASES TO BE IN QUALIFIED USE
AFTER IT IS PLACED IN SERVICE, THIS PARAGRAPH SHALL APPLY TO SUCH  PART-
NER IN THE YEAR SUCH PROPERTY CEASES TO BE IN QUALIFYING USE.
  (IX)  IF A TAXPAYER, WHICH IS APPROVED BY THE COMMISSIONER OF ECONOMIC
DEVELOPMENT AS THE OWNER OF A QUALIFIED INVESTMENT PROJECT OR A  SIGNIF-
ICANT  CAPITAL INVESTMENT PROJECT PURSUANT TO SUBDIVISION (W) OF SECTION
NINE HUNDRED FIFTY-NINE OF THE  GENERAL  MUNICIPAL  LAW,  FAILS  TO  (A)
CREATE  AT  LEAST THE MINIMUM NUMBER OF JOBS AT SUCH PROJECT AS REQUIRED
BY THE PROVISIONS OF SUBDIVISION (S) OR  (T)  OF  SECTION  NINE  HUNDRED
FIFTY-SEVEN  AND  SUBDIVISION  (W) OF SECTION NINE HUNDRED FIFTY-NINE OF
THE GENERAL MUNICIPAL LAW OR (B) PLACE IN  SERVICE  PROPERTY  COMPRISING
SUCH  QUALIFIED  INVESTMENT  PROJECT  OR  SIGNIFICANT CAPITAL INVESTMENT
PROJECT WITH A BASIS FOR FEDERAL INCOME TAX PURPOSES EQUALING OR EXCEED-
ING THE APPLICABLE MINIMUM REQUIRED BASIS AS PROVIDED IN  SUCH  SUBDIVI-
SION  (S)  OR  (T),  WHICHEVER IS RELEVANT, BY THE LAST DAY OF THE FIFTH
TAXABLE YEAR FOLLOWING THE TAXABLE YEAR  IN  WHICH  A  CREDIT  IS  FIRST

S. 6359                            77                            A. 8559

ALLOWED  UNDER  THIS  SUBDIVISION  FOR THE PROPERTY WHICH COMPRISES SUCH
QUALIFIED INVESTMENT PROJECT  OR  SUCH  SIGNIFICANT  CAPITAL  INVESTMENT
PROJECT,  THE  TOTAL AMOUNT OF THE CREDIT ALLOWED UNDER THIS SUBDIVISION
FOR  ALL TAXABLE YEARS WITH RESPECT TO THE PROPERTY WHICH COMPRISES SUCH
PROJECT WHICH HAS BEEN REFUNDED TO SUCH TAXPAYER SHALL BE ADDED BACK  IN
SUCH TAXABLE YEAR.
  (G)  NOTWITHSTANDING  THE EXPIRATION OF THE EMPIRE ZONES PROGRAM UNDER
ARTICLE EIGHTEEN-B OF THE GENERAL MUNICIPAL  LAW,  A  TAXPAYER  THAT  IS
CERTIFIED  AS  A  QUALIFIED  INVESTMENT PROJECT PURSUANT TO SUCH ARTICLE
EIGHT-B ON THE DAY  IMMEDIATELY  PRECEDING  THE  DAY  THE  EMPIRE  ZONES
PROGRAM EXPIRED SHALL CONTINUE TO BE DEEMED CERTIFIED UNDER SUCH ARTICLE
EIGHTEEN-B  FOR  PURPOSES  OF  THIS SUBDIVISION FOR THE REMAINDER OF THE
TAXABLE YEAR IN WHICH THE EXPIRATION OCCURRED AND FOR THE NEXT  SUCCEED-
ING  NINE  TAXABLE  YEARS.  IN  ADDITION, THE AREAS DESIGNATED AS EMPIRE
ZONES IN WHICH THE TAXPAYER  IS  CERTIFIED  AS  A  QUALIFIED  INVESTMENT
PROJECT  ON  THE  DAY  IMMEDIATELY  PRECEDING  THE  DAY THE EMPIRE ZONES
PROGRAM EXPIRED SHALL CONTINUE TO BE DEEMED EMPIRE ZONES FOR PURPOSES OF
THIS SUBDIVISION FOR THE REMAINDER OF THE  TAXABLE  YEAR  IN  WHICH  THE
EXPIRATION OCCURRED AND FOR THE NEXT SUCCEEDING NINE TAXABLE YEARS.
  (H)  NOTWITHSTANDING  THE EXPIRATION OF THE EMPIRE ZONES PROGRAM UNDER
ARTICLE EIGHTEEN-B OF THE GENERAL MUNICIPAL LAW AND EXCEPT  AS  PROVIDED
IN PARAGRAPH (G) OF THIS SUBDIVISION, A TAXPAYER THAT IS CERTIFIED AS AN
EMPIRE  ZONE  BUSINESS  PURSUANT  TO  SUCH ARTICLE EIGHTEEN-B ON THE DAY
IMMEDIATELY PRECEDING THE DAY THE  EMPIRE  ZONE  PROGRAM  EXPIRED  SHALL
CONTINUE  TO  BE  DEEMED  CERTIFIED  UNDER  SUCH  ARTICLE EIGHTEEN-B FOR
PURPOSES OF THIS SUBDIVISION UNTIL APRIL FIRST, TWO  THOUSAND  FOURTEEN.
IN  ADDITION, THE AREAS DESIGNATED AS EMPIRE ZONES IN WHICH THE TAXPAYER
IS CERTIFIED AS AN EMPIRE ZONE BUSINESS ON THE DAY IMMEDIATELY PRECEDING
THE DAY THE EMPIRE ZONES PROGRAM EXPIRED SHALL  CONTINUE  TO  BE  DEEMED
EMPIRE  ZONES  FOR  PURPOSES OF THIS SUBDIVISIONS UNTIL APRIL FIRST, TWO
THOUSAND FOURTEEN.
  4. EMPIRE ZONE EMPLOYMENT INCENTIVE CREDIT (EZ-EIC).  (A)  APPLICATION
OF  CREDIT. WHERE A TAXPAYER IS ALLOWED A CREDIT UNDER SUBDIVISION THREE
OF THIS SECTION, THE TAXPAYER SHALL BE ALLOWED A CREDIT FOR EACH OF  THE
THREE  YEARS NEXT SUCCEEDING THE TAXABLE YEAR FOR WHICH THE CREDIT UNDER
SUCH SUBDIVISION THREE IS ALLOWED, WITH RESPECT TO SUCH PROPERTY, WHETH-
ER OR NOT DEDUCTIBLE IN SUCH TAXABLE YEAR OR IN SUBSEQUENT TAXABLE YEARS
PURSUANT TO PARAGRAPH (D) OF SUCH SUBDIVISION THREE, OF  THIRTY  PERCENT
OF THE CREDIT ALLOWABLE UNDER SUCH SUBDIVISION THREE; PROVIDED, HOWEVER,
THAT  THE  CREDIT  ALLOWABLE UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR
SHALL ONLY BE ALLOWED IF THE AVERAGE NUMBER OF EMPLOYEES EMPLOYED BY THE
TAXPAYER IN THE EMPIRE ZONE, DESIGNATED PURSUANT TO  ARTICLE  EIGHTEEN-B
OF  THE  GENERAL MUNICIPAL LAW, IN WHICH SUCH PROPERTY IS LOCATED DURING
SUCH TAXABLE YEAR IS AT LEAST ONE HUNDRED ONE  PERCENT  OF  THE  AVERAGE
NUMBER OF EMPLOYEES EMPLOYED BY THE TAXPAYER IN SUCH EMPIRE ZONE, DURING
THE  TAXABLE  YEAR  IMMEDIATELY PRECEDING THE TAXABLE YEAR FOR WHICH THE
CREDIT UNDER SUCH SUBDIVISION THREE IS ALLOWED  AND  PROVIDED,  FURTHER,
THAT  IF  THE TAXPAYER WAS NOT SUBJECT TO TAX AND DID NOT HAVE A TAXABLE
YEAR IMMEDIATELY PRECEDING THE TAXABLE YEAR FOR WHICH THE  CREDIT  UNDER
SUBDIVISION THREE OF THIS SECTION IS ALLOWED, THE CREDIT ALLOWABLE UNDER
THIS  SUBDIVISION  FOR  ANY TAXABLE YEAR SHALL BE ALLOWED IF THE AVERAGE
NUMBER OF EMPLOYEES EMPLOYED IN SUCH EMPIRE ZONE IN SUCH TAXABLE YEAR IS
AT LEAST ONE HUNDRED ONE PERCENT OF THE AVERAGE NUMBER OF SUCH EMPLOYEES
DURING THE TAXABLE YEAR IN WHICH THE CREDIT UNDER SUCH SUBDIVISION THREE
IS ALLOWED.

S. 6359                            78                            A. 8559

  (B) AVERAGE NUMBER OF  EMPLOYEES.  THE  AVERAGE  NUMBER  OF  EMPLOYEES
EMPLOYED IN AN EMPIRE ZONE IN A TAXABLE YEAR SHALL BE COMPUTED BY ASCER-
TAINING  THE  NUMBER  OF  SUCH EMPLOYEES WITHIN SUCH ZONE EXCEPT GENERAL
EXECUTIVE OFFICERS, EMPLOYED BY THE TAXPAYER ON THE THIRTY-FIRST DAY  OF
MARCH, THE THIRTIETH DAY OF JUNE, THE THIRTIETH DAY OF SEPTEMBER AND THE
THIRTY-FIRST DAY OF DECEMBER IN THE TAXABLE YEAR, BY ADDING TOGETHER THE
NUMBER  OF  EMPLOYEES ASCERTAINED ON EACH OF SUCH DATES AND DIVIDING THE
SUM SO OBTAINED BY THE NUMBER OF SUCH  ABOVE-MENTIONED  DATES  OCCURRING
WITHIN THE TAXABLE YEAR.
  (C)  CARRYOVER.  IN  NO  EVENT SHALL THE CREDIT HEREIN PROVIDED FOR BE
ALLOWED IN AN AMOUNT WHICH WILL REDUCE THE TAX PAYABLE TO LESS THAN  THE
FIXED  DOLLAR  MINIMUM AMOUNT PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION
ONE OF SECTION TWO HUNDRED TEN OF THIS ARTICLE. PROVIDED, HOWEVER,  THAT
IF THE AMOUNT OF CREDIT ALLOWABLE UNDER THIS SUBDIVISION FOR ANY TAXABLE
YEAR REDUCES THE TAX TO SUCH AMOUNT, ANY AMOUNT OF CREDIT NOT DEDUCTIBLE
IN  SUCH TAXABLE YEAR MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS
AND MAY BE DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR  YEARS.  IN
LIEU  OF  SUCH  CARRYOVER,  ANY  SUCH TAXPAYER, WHICH IS APPROVED AS THE
OWNER OF A QUALIFIED INVESTMENT PROJECT OR A SIGNIFICANT CAPITAL INVEST-
MENT PROJECT PURSUANT TO SUBDIVISION (V) OF SECTION NINE HUNDRED  FIFTY-
NINE  OF  THE  GENERAL  MUNICIPAL  LAW, MAY ELECT, ON ITS REPORT FOR ITS
TAXABLE YEAR WITH RESPECT TO WHICH SUCH  CREDIT  IS  ALLOWED,  TO  TREAT
FIFTY  PERCENT  OF THE AMOUNT OF SUCH CARRYOVER 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, IN THE CASE
OF SUCH OWNER OF A QUALIFIED INVESTMENT PROJECT OR A SIGNIFICANT CAPITAL
INVESTMENT PROJECT, ONLY FIFTY PERCENT OF THE AMOUNT OF  SUCH  CARRYOVER
WHICH  IS ATTRIBUTABLE TO THE CREDIT ALLOWED UNDER THIS SUBDIVISION WITH
RESPECT TO PROPERTY WHICH IS PART OF SUCH PROJECT SHALL BE ALLOWED TO BE
CREDITED OR REFUNDED AND SUCH OWNER SHALL  BE  ALLOWED  SUCH  CREDIT  OR
REFUND ONLY FOR THOSE TAXABLE YEARS IN WHICH SUCH OWNER WOULD BE ALLOWED
A  CREDIT OR REFUND OF THE EMPIRE ZONE INVESTMENT TAX CREDIT PURSUANT TO
PARAGRAPH (D) OF SUBDIVISION THREE OF THIS SECTION.  PROVIDED,  FURTHER,
HOWEVER, THE PROVISIONS OF SUBSECTION (C) OF SECTION ONE THOUSAND EIGHT-
Y-EIGHT OF THIS CHAPTER NOTWITHSTANDING, NO INTEREST SHALL BE PAID THER-
EON.
  (C-1)  ANY  CARRYOVER OF A CREDIT FROM PRIOR TAXABLE YEARS WILL NOT BE
ALLOWED IF AN EMPIRE ZONE RETENTION CERTIFICATE IS NOT  ISSUED  PURSUANT
TO  SUBDIVISION  (W)  OF  SECTION NINE HUNDRED FIFTY-NINE OF THE GENERAL
MUNICIPAL LAW TO THE EMPIRE ZONE ENTERPRISE WHICH IS THE  BASIS  OF  THE
CREDIT.
  (D)  NOTWITHSTANDING  THE EXPIRATION OF THE EMPIRE ZONES PROGRAM UNDER
ARTICLE EIGHTEEN-B OF THE GENERAL MUNICIPAL  LAW,  A  TAXPAYER  THAT  IS
CERTIFIED  AS  A  QUALIFIED  INVESTMENT PROJECT PURSUANT TO SUCH ARTICLE
EIGHTEEN-B ON THE DAY IMMEDIATELY PRECEDING THE  DAY  THE  EMPIRE  ZONES
PROGRAM EXPIRED SHALL CONTINUE TO BE DEEMED CERTIFIED UNDER SUCH ARTICLE
EIGHTEEN-B  FOR  PURPOSES  OF  THIS SUBDIVISION FOR THE REMAINDER OF THE
TAXABLE YEAR IN WHICH THE EXPIRATION OCCURRED AND FOR THE NEXT  SUCCEED-
ING  NINE  TAXABLE  YEARS.  IN  ADDITION, THE AREAS DESIGNATED AS EMPIRE
ZONES IN WHICH THE TAXPAYER  IS  CERTIFIED  AS  A  QUALIFIED  INVESTMENT
PROJECT  ON  THE  DAY  IMMEDIATELY  PRECEDING  THE  DAY THE EMPIRE ZONES
PROGRAM EXPIRED SHALL CONTINUE TO BE DEEMED EMPIRE ZONES FOR PURPOSES OF
THIS SUBDIVISION FOR THE REMAINDER OF THE  TAXABLE  YEAR  IN  WHICH  THE
EXPIRATION OCCURRED AND FOR THE NEXT SUCCEEDING NINE TAXABLE YEARS.
  (E)  NOTWITHSTANDING  THE EXPIRATION OF THE EMPIRE ZONES PROGRAM UNDER
ARTICLE EIGHTEEN-B OF THE GENERAL MUNICIPAL LAW AND EXCEPT  AS  PROVIDED

S. 6359                            79                            A. 8559

IN PARAGRAPH (D) OF THIS SUBDIVISION, A TAXPAYER THAT IS CERTIFIED AS AN
EMPIRE  ZONE  BUSINESS  PURSUANT  TO  SUCH ARTICLE EIGHTEEN-B ON THE DAY
IMMEDIATELY PRECEDING THE DAY THE EMPIRE  ZONES  PROGRAM  EXPIRED  SHALL
CONTINUE  TO  BE  DEEMED  IN  THE  EMPIRE ZONE IN WHICH THE TAXPAYER WAS
CERTIFIED AS AN EMPIRE ZONE BUSINESS ON THE  DAY  IMMEDIATELY  PRECEDING
THE  DAY  THE  EMPIRE  ZONES PROGRAM EXPIRED FOR EACH OF THE THREE YEARS
NEXT SUCCEEDING THE TAXABLE YEAR FOR WHICH THE CREDIT UNDER  SUBDIVISION
THREE OF THIS SECTION IS ALLOWED.
  5.  QEZE  CREDIT  FOR  REAL PROPERTY TAXES. (A) ALLOWANCE OF CREDIT. A
TAXPAYER WHICH IS A QUALIFIED EMPIRE ZONE ENTERPRISE SHALL BE ALLOWED  A
CREDIT  FOR  ELIGIBLE REAL PROPERTY TAXES, TO BE COMPUTED AS PROVIDED IN
SECTION FIFTEEN OF THIS CHAPTER, AGAINST THE TAX IMPOSED BY  THIS  ARTI-
CLE.
  (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  FIXED  DOLLAR  MINIMUM  AMOUNT PRESCRIBED IN PARAGRAPH (D) OF
SUBDIVISION ONE OF SECTION TWO HUNDRED TEN OF THIS ARTICLE. 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.
  6.  QEZE  TAX  REDUCTION  CREDIT.  (A) ALLOWANCE OF CREDIT. A TAXPAYER
WHICH IS A QUALIFIED EMPIRE ZONE ENTERPRISE SHALL BE ALLOWED A QEZE  TAX
REDUCTION  CREDIT, TO BE COMPUTED AS PROVIDED IN SECTION SIXTEEN 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 FIXED DOLLAR MINIMUM AMOUNT  PRESCRIBED  IN  PARAGRAPH  (D)  OF
SUBDIVISION  ONE  OF  SECTION TWO HUNDRED TEN OF THIS ARTICLE. PROVIDED,
HOWEVER, THIS PARAGRAPH SHALL NOT APPLY TO A TAXPAYER WITH A ZONE  ALLO-
CATION FACTOR OF ONE HUNDRED PERCENT.
  7. QUALIFIED EMERGING TECHNOLOGY COMPANY EMPLOYMENT CREDIT. (A) APPLI-
CATION  OF  CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED
AS HEREINAFTER PROVIDED,  AGAINST  THE  TAX  IMPOSED  BY  THIS  ARTICLE,
PROVIDED:
  (I)  THE  TAXPAYER IS A QUALIFIED EMERGING TECHNOLOGY COMPANY PURSUANT
TO THE PROVISIONS OF SECTION THIRTY-ONE  HUNDRED  TWO-E  OF  THE  PUBLIC
AUTHORITIES LAW; AND
  (II)  THE  AVERAGE  NUMBER  OF  INDIVIDUALS  EMPLOYED FULL TIME BY THE
TAXPAYER IN NEW YORK STATE DURING THE  TAXABLE  YEAR  IS  AT  LEAST  ONE
HUNDRED  ONE  PERCENT  OF  THE  TAXPAYER'S BASE YEAR EMPLOYMENT. FOR THE
PURPOSES OF THIS SUBDIVISION, "BASE YEAR EMPLOYMENT" MEANS  THE  AVERAGE
NUMBER  OF  INDIVIDUALS  EMPLOYED FULL-TIME BY THE TAXPAYER IN THE STATE
DURING THE THREE TAXABLE YEARS IMMEDIATELY PRECEDING THE  FIRST  TAXABLE
YEAR  IN  WHICH  THE  CREDIT  IS  CLAIMED.  WHERE  THE TAXPAYER PROVIDED
FULL-TIME EMPLOYMENT WITHIN THE STATE DURING  ONLY  A  PORTION  OF  SUCH
THREE-YEAR PERIOD, THEN THE FIRST EFFECTIVE DATE FOR THE COMPANY TO TAKE
ADVANTAGE OF THIS CREDIT SHALL BE THE NEXT YEAR FOLLOWING THE FIRST FULL
TAXABLE  YEAR  THAT  THE  COMPANY  HAD  FULL-TIME EMPLOYMENT IN NEW YORK
STATE. FOR THE PURPOSES OF THIS PARAGRAPH THE TERM "THREE  YEARS"  SHALL
BE  DEEMED  TO  REFER  INSTEAD  TO THE PRIOR YEAR'S FULL-TIME EMPLOYMENT
AFTER THE FIRST YEAR AND THE AVERAGE OF  THE  FIRST  EIGHT  QUARTERS  OF
EMPLOYMENT AFTER THE FIRST TWO TAXABLE YEARS IN NEW YORK STATE.

S. 6359                            80                            A. 8559

  (B)  CREDIT  LIMITATION. THE CREDIT SHALL BE ALLOWED ONLY IN THE FIRST
TAXABLE YEAR IN WHICH THE CREDIT IS CLAIMED AND IN EACH OF THE NEXT  TWO
TAXABLE  YEARS,  PROVIDED  THAT  THE CONDITIONS OF PARAGRAPH (A) OF THIS
SUBDIVISION ARE SATISFIED IN EACH TAXABLE YEAR.
  (C) AVERAGE NUMBER OF INDIVIDUALS EMPLOYED FULL-TIME. FOR THE PURPOSES
OF  THIS  SUBDIVISION,  AVERAGE NUMBER OF INDIVIDUALS EMPLOYED FULL-TIME
SHALL BE COMPUTED BY ADDING THE NUMBER OF SUCH INDIVIDUALS  EMPLOYED  BY
THE  TAXPAYER  AT  THE  END  OF EACH QUARTER DURING EACH TAXABLE YEAR OR
OTHER APPLICABLE PERIOD AND DIVIDING THE SUM SO OBTAINED BY  THE  NUMBER
OF  SUCH QUARTERS OCCURRING WITHIN SUCH TAXABLE YEAR OR OTHER APPLICABLE
PERIOD; PROVIDED HOWEVER, EXCEPT THAT IN COMPUTING BASE YEAR EMPLOYMENT,
THERE SHALL BE EXCLUDED THEREFROM ANY EMPLOYEE WITH RESPECT  TO  WHOM  A
CREDIT PROVIDED FOR UNDER SUBDIVISION SIX OF THIS SECTION IS CLAIMED FOR
THE TAXABLE YEAR.
  (D) AMOUNT OF CREDIT. THE AMOUNT OF THE CREDIT SHALL EQUAL THE PRODUCT
OF  ONE  THOUSAND  DOLLARS  TIMES  THE  NUMBER  OF  INDIVIDUALS EMPLOYED
FULL-TIME BY THE TAXPAYER IN THE TAXABLE YEAR THAT ARE IN EXCESS OF  ONE
HUNDRED PERCENT OF THE TAXPAYER'S BASE YEAR EMPLOYMENT.
  (E) CARRYOVER. THE CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXA-
BLE  YEAR  SHALL  NOT  REDUCE THE TAX DUE FOR SUCH YEAR TO LESS THAN THE
FIXED DOLLAR MINIMUM AMOUNT PRESCRIBED IN PARAGRAPH (D)  OF  SUBDIVISION
ONE  OF  SECTION TWO HUNDRED TEN OF THIS ARTICLE. 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.
  8. QUALIFIED EMERGING  TECHNOLOGY  COMPANY  CAPITAL  TAX  CREDIT.  (A)
AMOUNT  OF  CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT AGAINST THE TAX
IMPOSED BY THIS ARTICLE. THE AMOUNT OF THE CREDIT SHALL BE EQUAL TO  ONE
OF  THE FOLLOWING PERCENTAGES, PER EACH QUALIFIED INVESTMENT IN A QUALI-
FIED EMERGING  TECHNOLOGY  COMPANY  AS  DEFINED  IN  SECTION  THIRTY-ONE
HUNDRED  TWO-E  OF  THE  PUBLIC AUTHORITIES LAW, MADE DURING THE TAXABLE
YEAR, AND CERTIFIED BY THE COMMISSIONER, EITHER:
  (1) TEN PERCENT OF QUALIFIED INVESTMENTS IN QUALIFIED  EMERGING  TECH-
NOLOGY  COMPANIES,  EXCEPT  FOR  INVESTMENTS  MADE BY OR ON BEHALF OF AN
OWNER OF THE BUSINESS, INCLUDING, BUT NOT  LIMITED  TO,  A  STOCKHOLDER,
PARTNER OR SOLE PROPRIETOR, OR ANY RELATED PERSON, AS DEFINED IN SUBPAR-
AGRAPH  (C) OF PARAGRAPH THREE OF SUBSECTION (B) OF SECTION FOUR HUNDRED
SIXTY-FIVE OF THE INTERNAL REVENUE CODE, AND PROVIDED, HOWEVER, THAT THE
TAXPAYER CERTIFIES TO THE COMMISSIONER  THAT  THE  QUALIFIED  INVESTMENT
WILL  NOT  BE  SOLD, TRANSFERRED, TRADED, OR DISPOSED OF DURING THE FOUR
YEARS FOLLOWING THE YEAR IN WHICH THE CREDIT IS FIRST CLAIMED; OR
  (2) TWENTY PERCENT OF  QUALIFIED  INVESTMENTS  IN  QUALIFIED  EMERGING
TECHNOLOGY  COMPANIES, EXCEPT FOR INVESTMENTS MADE BY OR ON BEHALF OF AN
OWNER OF THE BUSINESS, INCLUDING, BUT NOT  LIMITED  TO,  A  STOCKHOLDER,
PARTNER OR SOLE PROPRIETOR, OR ANY RELATED PERSON, AS DEFINED IN SUBPAR-
AGRAPH  (C) OF PARAGRAPH THREE OF SUBSECTION (B) OF SECTION FOUR HUNDRED
SIXTY-FIVE OF THE INTERNAL REVENUE CODE, AND PROVIDED, HOWEVER, THAT THE
TAXPAYER CERTIFIES TO THE COMMISSIONER  THAT  THE  QUALIFIED  INVESTMENT
WILL  NOT  BE  SOLD, TRANSFERRED, TRADED, OR DISPOSED OF DURING THE NINE
YEARS FOLLOWING THE YEAR IN WHICH THE CREDIT IS FIRST CLAIMED.
  (B) QUALIFIED INVESTMENT. "QUALIFIED INVESTMENT"  MEANS  THE  CONTRIB-
UTION  OF PROPERTY TO A CORPORATION IN EXCHANGE FOR ORIGINAL ISSUE CAPI-

S. 6359                            81                            A. 8559

TAL STOCK OR OTHER OWNERSHIP INTEREST, THE CONTRIBUTION OF PROPERTY TO A
PARTNERSHIP IN EXCHANGE FOR AN INTEREST IN THE PARTNERSHIP, AND  SIMILAR
CONTRIBUTIONS IN THE CASE OF A BUSINESS ENTITY NOT IN CORPORATE OR PART-
NERSHIP  FORM IN EXCHANGE FOR AN OWNERSHIP INTEREST IN SUCH ENTITY.  THE
TOTAL AMOUNT OF CREDIT ALLOWABLE TO A TAXPAYER UNDER THIS PROVISION  FOR
ALL  YEARS,  TAKEN  IN THE AGGREGATE, SHALL NOT EXCEED ONE HUNDRED FIFTY
THOUSAND DOLLARS IN THE CASE OF INVESTMENTS MADE  PURSUANT  TO  SUBPARA-
GRAPH  ONE  OF  PARAGRAPH  (A)  OF THIS SUBDIVISION AND SHALL NOT EXCEED
THREE HUNDRED THOUSAND DOLLARS IN THE CASE OF INVESTMENTS MADE  PURSUANT
TO SUBPARAGRAPH TWO OF PARAGRAPH (A) OF THIS SUBDIVISION.
  (C)  CARRYOVER.  IN  NO  EVENT  SHALL THE CREDIT AND CARRYOVER OF SUCH
CREDIT ALLOWED UNDER THIS SUBDIVISION  FOR  ANY  TAXABLE  YEAR,  IN  THE
AGGREGATE,  REDUCE  THE  TAX  DUE  FOR  SUCH YEAR TO LESS THAN THE FIXED
DOLLAR MINIMUM AMOUNT PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION ONE  OF
SECTION TWO HUNDRED TEN OF THIS CHAPTER. HOWEVER, IF THE AMOUNT OF CRED-
IT OR CARRYOVERS OF SUCH CREDIT, OR BOTH, ALLOWED UNDER THIS SUBDIVISION
FOR  ANY  TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT, OR IF ANY PART OF
THE CREDIT OR CARRYOVERS OF SUCH CREDIT MAY NOT BE DEDUCTED FROM THE TAX
OTHERWISE DUE BY REASON OF THE FINAL SENTENCE  OF  THIS  PARAGRAPH,  ANY
AMOUNT  OF  CREDIT  OR  CARRYOVERS OF SUCH CREDIT THUS NOT DEDUCTIBLE IN
SUCH TAXABLE YEAR MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND
MAY BE DEDUCTED FROM THE TAX FOR SUCH YEAR OR YEARS.  IN  ADDITION,  THE
AMOUNT  OF  SUCH  CREDIT,  AND  CARRYOVERS OF SUCH CREDIT TO THE TAXABLE
YEAR, DEDUCTED FROM THE TAX OTHERWISE DUE MAY  NOT,  IN  THE  AGGREGATE,
EXCEED  FIFTY  PERCENT OF THE TAX IMPOSED UNDER SECTION TWO HUNDRED NINE
OF THIS ARTICLE COMPUTED WITHOUT REGARD TO ANY CREDIT  PROVIDED  FOR  BY
THIS SECTION.
  (D)  RECAPTURE.  (1)  WHERE  A  TAXPAYER SELLS, TRANSFERS OR OTHERWISE
DISPOSES OF CORPORATE STOCK, A PARTNERSHIP INTEREST OR  OTHER  OWNERSHIP
INTEREST ARISING FROM THE MAKING OF A QUALIFIED INVESTMENT WHICH WAS THE
BASIS, IN WHOLE OR IN PART, FOR THE ALLOWANCE OF THE CREDIT PROVIDED FOR
UNDER SUBPARAGRAPH ONE OF PARAGRAPH (A) OF THIS SUBDIVISION, OR WHERE AN
INVESTMENT  WHICH  WAS  THE  BASIS FOR SUCH ALLOWANCE IS, IN WHOLE OR IN
PART, RECOVERED BY SUCH  TAXPAYER,  AND  SUCH  DISPOSITION  OR  RECOVERY
OCCURS  DURING  THE  TAXABLE  YEAR OR WITHIN FORTY-EIGHT MONTHS FROM THE
CLOSE OF THE TAXABLE YEAR WITH RESPECT TO WHICH SUCH CREDIT IS  ALLOWED,
THE  TAXPAYER  SHALL ADD BACK, WITH RESPECT TO THE TAXABLE YEAR IN WHICH
THE DISPOSITION OR  RECOVERY  DESCRIBED  ABOVE  OCCURRED,  THE  REQUIRED
PORTION OF THE CREDIT ORIGINALLY ALLOWED.
  (2)  WHERE A TAXPAYER SELLS, TRANSFERS OR OTHERWISE DISPOSES OF CORPO-
RATE STOCK, A PARTNERSHIP INTEREST OR OTHER OWNERSHIP  INTEREST  ARISING
FROM  THE MAKING OF A QUALIFIED INVESTMENT WHICH WAS THE BASIS, IN WHOLE
OR IN PART, FOR THE ALLOWANCE OF THE CREDIT PROVIDED FOR UNDER  SUBPARA-
GRAPH  TWO  OF PARAGRAPH (A) OF THIS SUBDIVISION, OR WHERE AN INVESTMENT
WHICH WAS THE BASIS FOR SUCH ALLOWANCE IS IN ANY MANNER, IN WHOLE OR  IN
PART,  RECOVERED  BY  SUCH  TAXPAYER,  AND  SUCH DISPOSITION OR RECOVERY
OCCURS DURING THE TAXABLE YEAR OR WITHIN ONE HUNDRED EIGHT  MONTHS  FROM
THE  CLOSE  OF  THE  TAXABLE  YEAR  WITH RESPECT TO WHICH SUCH CREDIT IS
ALLOWED, THE TAXPAYER SHALL ADD BACK, WITH RESPECT TO THE  TAXABLE  YEAR
IN  WHICH  THE  DISPOSITION OR RECOVERY DESCRIBED IN SUBPARAGRAPH ONE OF
THIS PARAGRAPH OCCURRED THE REQUIRED PORTION OF  THE  CREDIT  ORIGINALLY
ALLOWED.
  (3) THE REQUIRED PORTION OF THE CREDIT ORIGINALLY ALLOWED SHALL BE THE
PRODUCT  OF  (A) THE PORTION OF SUCH CREDIT ATTRIBUTABLE TO THE PROPERTY
DISPOSED OF AND (B) THE APPLICABLE PERCENTAGE.
  (4) THE APPLICABLE PERCENTAGE SHALL BE:

S. 6359                            82                            A. 8559

  (A) FOR CREDITS ALLOWED PURSUANT TO SUBPARAGRAPH ONE OF PARAGRAPH  (A)
OF THIS SUBDIVISION:
  (I)  ONE HUNDRED PERCENT, IF THE DISPOSITION OR RECOVERY OCCURS WITHIN
THE TAXABLE YEAR WITH RESPECT TO WHICH THE CREDIT IS ALLOWED  OR  WITHIN
TWELVE MONTHS OF THE END OF SUCH TAXABLE YEAR,
  (II)  SEVENTY-FIVE PERCENT, IF THE DISPOSITION OR RECOVERY OCCURS MORE
THAN TWELVE BUT NOT MORE THAN TWENTY-FOUR MONTHS AFTER THE  END  OF  THE
TAXABLE YEAR WITH RESPECT TO WHICH THE CREDIT IS ALLOWED,
  (III)  FIFTY  PERCENT, IF THE DISPOSITION OR RECOVERY OCCURS MORE THAN
TWENTY-FOUR MONTHS BUT NOT MORE THAN THIRTY-SIX MONTHS AFTER THE END  OF
THE TAXABLE YEAR WITH RESPECT TO WHICH THE CREDIT IS ALLOWED, OR
  (IV)  TWENTY-FIVE  PERCENT, IF THE DISPOSITION OR RECOVERY OCCURS MORE
THAN THIRTY-SIX MONTHS BUT NOT MORE THAN FORTY-EIGHT  MONTHS  AFTER  THE
END OF THE TAXABLE YEAR WITH RESPECT TO WHICH THE CREDIT IS ALLOWED; OR
  (B)  FOR CREDITS ALLOWED PURSUANT TO SUBPARAGRAPH TWO OF PARAGRAPH (A)
OF THIS SUBDIVISION:
  (I) ONE HUNDRED PERCENT, IF THE DISPOSITION OR RECOVERY OCCURS  WITHIN
THE  TAXABLE  YEAR WITH RESPECT TO WHICH THE CREDIT IS ALLOWED OR WITHIN
TWELVE MONTHS OF THE END OF SUCH TAXABLE YEAR,
  (II) EIGHTY PERCENT, IF THE DISPOSITION OR RECOVERY OCCURS  MORE  THAN
TWELVE BUT NOT MORE THAN FORTY-EIGHT MONTHS AFTER THE END OF THE TAXABLE
YEAR WITH RESPECT TO WHICH THE CREDIT IS ALLOWED,
  (III)  SIXTY  PERCENT, IF THE DISPOSITION OR RECOVERY OCCURS MORE THAN
FORTY-EIGHT MONTHS BUT NOT MORE THAN SEVENTY-TWO MONTHS AFTER THE END OF
THE TAXABLE YEAR WITH RESPECT TO WHICH THE CREDIT IS ALLOWED,
  (IV) FORTY PERCENT, IF THE DISPOSITION OR RECOVERY  OCCURS  MORE  THAN
SEVENTY-TWO  MONTHS BUT NOT MORE THAN NINETY-SIX MONTHS AFTER THE END OF
THE TAXABLE YEAR WITH RESPECT TO WHICH THE CREDIT IS ALLOWED, OR
  (V) TWENTY PERCENT, IF THE DISPOSITION OR RECOVERY  OCCURS  MORE  THAN
NINETY-SIX  MONTHS  BUT NOT MORE THAN ONE HUNDRED EIGHT MONTHS AFTER THE
END OF THE TAXABLE YEAR WITH RESPECT TO WHICH THE CREDIT IS ALLOWED.
  9. CREDIT FOR THE  SPECIAL  ADDITIONAL  MORTGAGE  RECORDING  TAX.  (A)
APPLICATION OF CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE CRED-
ITED AGAINST THE TAX IMPOSED BY THIS ARTICLE, EQUAL TO THE AMOUNT OF THE
SPECIAL  ADDITIONAL MORTGAGE RECORDING TAX PAID BY THE TAXPAYER PURSUANT
TO  THE  PROVISIONS  OF  SUBDIVISION  ONE-A  OF  SECTION   TWO   HUNDRED
FIFTY-THREE OF THIS CHAPTER OR MORTGAGES RECORDED. PROVIDED, HOWEVER, NO
CREDIT  SHALL  BE  ALLOWED  WITH  RESPECT TO A MORTGAGE OF REAL PROPERTY
PRINCIPALLY IMPROVED OR  TO  BE  IMPROVED  BY  ONE  OR  MORE  STRUCTURES
CONTAINING  IN  THE  AGGREGATE  NOT  MORE  THAN SIX RESIDENTIAL DWELLING
UNITS, EACH DWELLING UNIT HAVING ITS OWN  SEPARATE  COOKING  FACILITIES,
WHERE  THE  REAL  PROPERTY  IS  LOCATED  IN  ONE OR MORE OF THE COUNTIES
COMPRISING  THE  METROPOLITAN  COMMUTER  TRANSPORTATION  AREA.  PROVIDED
FURTHER,  HOWEVER, NO CREDIT SHALL BE ALLOWED WITH RESPECT TO A MORTGAGE
OF REAL PROPERTY PRINCIPALLY IMPROVED OR TO BE IMPROVED BY ONE  OR  MORE
STRUCTURES  CONTAINING  IN  THE  AGGREGATE NOT MORE THAN SIX RESIDENTIAL
DWELLING UNITS, EACH DWELLING  UNIT  HAVING  ITS  OWN  SEPARATE  COOKING
FACILITIES, WHERE THE REAL PROPERTY IS LOCATED IN THE COUNTY OF ERIE.
  (B)  CARRYOVER.  IN  NO  EVENT SHALL THE CREDIT HEREIN PROVIDED FOR BE
ALLOWED IN AN AMOUNT WHICH WILL REDUCE THE TAX PAYABLE TO LESS THAN  THE
FIXED  DOLLAR  MINIMUM AMOUNT PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION
ONE OF SECTION TWO HUNDRED TEN OF THIS ARTICLE. IF, HOWEVER, THE  AMOUNT
OF CREDIT ALLOWABLE UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR, INCLUD-
ING  ANY  CREDIT CARRIED OVER FROM A PRIOR TAXABLE YEAR, REDUCES THE TAX
TO SUCH AMOUNT, ANY AMOUNT OF CREDIT NOT DEDUCTIBLE IN SUCH TAXABLE YEAR

S. 6359                            83                            A. 8559

MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND MAY  BE  DEDUCTED
FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS.
  10. CREDIT FOR SERVICING CERTAIN MORTGAGES. (A) GENERAL. EVERY TAXPAY-
ER  MEETING  THE  REQUIREMENTS  OF THE STATE OF NEW YORK MORTGAGE AGENCY
APPLICABLE TO THE SERVICING OF MORTGAGES ACQUIRED BY SUCH AGENCY  PURSU-
ANT  TO  THE  STATE  OF  NEW  YORK MORTGAGE AGENCY ACT, WHICH SHALL HAVE
ENTERED INTO A CONTRACT WITH THE STATE OF NEW YORK  MORTGAGE  AGENCY  TO
SERVICE  MORTGAGES  ACQUIRED BY SUCH AGENCY PURSUANT TO THE STATE OF NEW
YORK MORTGAGE AGENCY ACT, SHALL HAVE CREDITED TO IT OR AN  AMOUNT  EQUAL
TO TWO AND NINETY-THREE ONE HUNDREDTHS PER CENTUM OF THE TOTAL PRINCIPAL
AND  INTEREST  COLLECTED BY THE TAXPAYER DURING ITS TAXABLE YEAR ON EACH
SUCH MORTGAGE SECURED BY A LIEN ON REAL ESTATE IMPROVED BY A  ONE-FAMILY
TO FOUR-FAMILY RESIDENTIAL STRUCTURE AND AN AMOUNT EQUAL TO THE INTEREST
COLLECTED  BY THE TAXPAYER DURING ITS TAXABLE YEAR ON EACH SUCH MORTGAGE
SECURED BY A LIEN ON REAL PROPERTY IMPROVED BY A STRUCTURE  OCCUPIED  AS
THE  RESIDENCE  OF  FIVE  OR  MORE FAMILIES LIVING INDEPENDENTLY OF EACH
OTHER, MULTIPLIED BY A FRACTION THE DENOMINATOR OF WHICH  SHALL  BE  THE
INTEREST  RATE PAYABLE ON THE MORTGAGE (COMPUTED TO FIVE DECIMAL PLACES)
AND THE NUMERATOR OF WHICH SHALL BE .00125 IN THE CASE OF SUCH  A  MORT-
GAGE  ACQUIRED  BY  SUCH  AGENCY  FOR LESS THAN ONE MILLION DOLLARS, AND
.00100 IN THE CASE OF SUCH A MORTGAGE ACQUIRED BY SUCH  AGENCY  FOR  ONE
MILLION DOLLARS OR MORE. IN NO EVENT SHALL THE CREDIT ALLOWED UNDER THIS
SUBDIVISION  REDUCE THE TAX TO LESS THAN THE FIXED DOLLAR MINIMUM AMOUNT
PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION ONE OF  SECTION  TWO  HUNDRED
TEN  OF  THIS ARTICLE. IN COMPUTING SUCH TAX CREDIT FOR THE SERVICING OF
MORTGAGES ON  ONE-FAMILY  TO  FOUR-FAMILY  RESIDENTIAL  STRUCTURES,  THE
TAXPAYER  SHALL NOT BE ENTITLED TO CREDIT FOR THE COLLECTION OF CURTAIL-
MENT OR PAYMENTS IN DISCHARGE OF ANY SUCH MORTGAGE. FOR THE PURPOSES  OF
THIS SUBDIVISION,
  (B)(I) A "CURTAILMENT" SHALL MEAN AMOUNTS PAID BY MORTGAGORS
  (A)  IN  EXCESS  OF  THE  MONTHLY  CONSTANT  DUE  DURING  THE MONTH OF
COLLECTION AND
  (B) IN REDUCTION OF THE UNPAID PRINCIPAL BALANCE OF THE  MORTGAGE;  IN
THE ABSENCE OF CLEAR EVIDENCE TO THE CONTRARY, AMOUNTS PAID IN EXCESS OF
THE  MONTHLY CONSTANT DUE DURING THE MONTH OF COLLECTION SHALL BE DEEMED
TO BE IN REDUCTION OF THE UNPAID PRINCIPAL BALANCE OF THE MORTGAGE; AND
  (II) "MONTHLY CONSTANT" SHALL MEAN THE AMOUNT OF PRINCIPAL AND  INTER-
EST WHICH IS DUE AND PAYABLE ACCORDING TO THE MORTGAGE DOCUMENTS ON EACH
PERIODIC PAYMENT DATE.
  11.  AGRICULTURAL  PROPERTY  TAX CREDIT. (A) GENERAL. IN THE CASE OF A
TAXPAYER WHICH IS AN ELIGIBLE FARMER OR AN ELIGIBLE FARMER WHO HAS  PAID
TAXES  PURSUANT  TO A LAND CONTRACT, THERE SHALL BE ALLOWED A CREDIT FOR
THE ALLOWABLE SCHOOL DISTRICT PROPERTY TAXES. THE TERM "ALLOWABLE SCHOOL
DISTRICT PROPERTY TAXES" MEANS THE SCHOOL DISTRICT PROPERTY  TAXES  PAID
DURING  THE  TAXABLE YEAR ON QUALIFIED AGRICULTURAL PROPERTY, SUBJECT TO
THE ACREAGE LIMITATION PROVIDED IN PARAGRAPH (E) OF THIS SUBDIVISION AND
THE INCOME LIMITATION PROVIDED IN PARAGRAPH (F) OF THIS SUBDIVISION.
  (B) ELIGIBLE FARMER.  FOR  PURPOSES  OF  THIS  SUBDIVISION,  THE  TERM
"ELIGIBLE FARMER" MEANS A TAXPAYER WHOSE FEDERAL GROSS INCOME FROM FARM-
ING  FOR THE TAXABLE YEAR IS AT LEAST TWO-THIRDS OF EXCESS FEDERAL GROSS
INCOME. THE TERM "ELIGIBLE FARMER" ALSO  INCLUDES  A  CORPORATION  OTHER
THAN  THE  TAXPAYER  OF RECORD FOR QUALIFIED AGRICULTURAL LAND WHICH HAS
PAID THE SCHOOL DISTRICT PROPERTY TAXES  ON  SUCH  LAND  PURSUANT  TO  A
CONTRACT FOR THE FUTURE PURCHASE OF SUCH LAND; PROVIDED THAT SUCH CORPO-
RATION  HAS  A  FEDERAL  GROSS  INCOME FROM FARMING FOR THE TAXABLE YEAR
WHICH IS AT  LEAST  TWO-THIRDS  OF  EXCESS  FEDERAL  GROSS  INCOME;  AND

S. 6359                            84                            A. 8559

PROVIDED FURTHER THAT, IN DETERMINING SUCH INCOME ELIGIBILITY, A TAXPAY-
ER  MAY,  FOR  ANY  TAXABLE  YEAR, USE THE AVERAGE OF SUCH FEDERAL GROSS
INCOME FROM FARMING FOR THAT TAXABLE YEAR AND SUCH INCOME  FOR  THE  TWO
CONSECUTIVE  TAXABLE  YEARS  IMMEDIATELY  PRECEDING  SUCH  TAXABLE YEAR.
EXCESS FEDERAL GROSS INCOME MEANS THE AMOUNT  OF  FEDERAL  GROSS  INCOME
FROM  ALL  SOURCES  FOR  THE  TAXABLE  YEAR IN EXCESS OF THIRTY THOUSAND
DOLLARS. FOR THE PURPOSES OF THIS PARAGRAPH, PAYMENTS FROM  THE  STATE'S
FARMLAND  PROTECTION PROGRAM, ADMINISTERED BY THE DEPARTMENT OF AGRICUL-
TURE AND MARKETS, SHALL BE INCLUDED AS FEDERAL GROSS INCOME FROM FARMING
FOR OTHERWISE ELIGIBLE FARMERS.
  (C) SCHOOL DISTRICT PROPERTY TAXES. FOR PURPOSES OF THIS  SUBDIVISION,
THE  TERM  "SCHOOL  DISTRICT  PROPERTY  TAXES" MEANS ALL PROPERTY TAXES,
SPECIAL AD VALOREM LEVIES AND SPECIAL ASSESSMENTS, EXCLUSIVE  OF  PENAL-
TIES  AND INTEREST, LEVIED FOR SCHOOL DISTRICT PURPOSES ON THE QUALIFIED
AGRICULTURAL PROPERTY OWNED BY THE TAXPAYER.
  (D) QUALIFIED AGRICULTURAL PROPERTY. FOR PURPOSES OF THIS SUBDIVISION,
THE TERM "QUALIFIED AGRICULTURAL PROPERTY" MEANS LAND  LOCATED  IN  THIS
STATE  WHICH  IS USED IN AGRICULTURAL PRODUCTION, AND LAND IMPROVEMENTS,
STRUCTURES AND BUILDINGS (EXCLUDING BUILDINGS USED  FOR  THE  TAXPAYER'S
RESIDENTIAL  PURPOSE) LOCATED ON SUCH LAND WHICH ARE USED OR OCCUPIED TO
CARRY OUT SUCH PRODUCTION. QUALIFIED AGRICULTURAL PROPERTY ALSO INCLUDES
LAND SET ASIDE OR RETIRED UNDER A  FEDERAL  SUPPLY  MANAGEMENT  OR  SOIL
CONSERVATION  PROGRAM  OR  LAND THAT AT THE TIME IT BECOMES SUBJECT TO A
CONSERVATION EASEMENT, AS DEFINED UNDER SUBDIVISION TWENTY-EIGHT OF THIS
SECTION, MET THE REQUIREMENTS UNDER THIS PARAGRAPH.
  (E) ACREAGE LIMITATION. (I) ELIGIBLE TAXES.  IN  THE  EVENT  THAT  THE
QUALIFIED  AGRICULTURAL  PROPERTY OWNED BY THE TAXPAYER INCLUDES LAND IN
EXCESS OF THE BASE ACREAGE AS PROVIDED IN THIS PARAGRAPH, THE AMOUNT  OF
SCHOOL  DISTRICT  PROPERTY TAXES ELIGIBLE FOR CREDIT UNDER THIS SUBDIVI-
SION SHALL BE THAT PORTION OF THE SCHOOL DISTRICT PROPERTY  TAXES  WHICH
BEARS  THE  SAME  RATIO TO THE TOTAL SCHOOL DISTRICT PROPERTY TAXES PAID
DURING THE TAXABLE YEAR, AS THE ACREAGE ALLOWABLE UNDER  THIS  PARAGRAPH
BEARS TO THE ENTIRE ACREAGE OF SUCH LAND.
  (II)  ALLOWABLE  ACREAGE. THE ALLOWABLE ACREAGE IS THE SUM OF THE BASE
ACREAGE SET FORTH BELOW AND FIFTY PERCENT OF  THE  INCREMENTAL  ACREAGE.
THE INCREMENTAL ACREAGE IS THE EXCESS OF THE ENTIRE ACREAGE OF QUALIFIED
AGRICULTURAL LAND OWNED BY THE TAXPAYER OVER THE BASE ACREAGE. EXCEPT AS
PROVIDED  IN  SUBPARAGRAPH  (III) OF THIS PARAGRAPH, THE BASE ACREAGE IS
THREE HUNDRED FIFTY ACRES.
THE TOTAL BASE ACREAGE MAY BE  INCREASED  BY  ANY  ACREAGE  ENROLLED  OR
PARTICIPATING DURING THE TAXABLE YEAR IN A FEDERAL ENVIRONMENTAL CONSER-
VATION  ACREAGE  RESERVE  PROGRAM PURSUANT TO TITLE THREE OF THE FEDERAL
AGRICULTURE IMPROVEMENT AND REFORM ACT OF NINETEEN HUNDRED NINETY-SIX.
  (III) BASE ACREAGE OF RELATED PERSONS. WHERE THE TAXPAYER AND  ONE  OR
MORE  RELATED  PERSONS  EACH  OWN QUALIFIED AGRICULTURAL PROPERTY ON THE
FIRST DAY OF MARCH OF ANY YEAR, THE BASE ACREAGE UNDER SUBPARAGRAPH (II)
OF THIS PARAGRAPH SHALL  BE  DIVIDED  EQUALLY  AND  ALLOTTED  AMONG  THE
TAXPAYER  AND  SUCH RELATED PERSONS, AND THE TAXPAYER'S BASE ACREAGE FOR
THE TAXABLE YEAR WHICH INCLUDES SUCH MARCH FIRST SHALL BE LIMITED TO ITS
ALLOTTED SHARE. PROVIDED, HOWEVER, IF THE TAXPAYER AND ALL SUCH  RELATED
PERSONS CONSENT (AT SUCH TIME AND IN SUCH MANNER AS THE COMMISSIONER MAY
PRESCRIBE)  TO AN UNEQUAL DIVISION, THE TAXPAYER'S BASE ACREAGE FOR SUCH
TAXABLE YEAR SHALL BE LIMITED TO ITS ALLOTTED SHARE UNDER  SUCH  UNEQUAL
DIVISION.
  (IV)  RELATED  PERSONS. (A) FOR PURPOSES OF SUBPARAGRAPH (III) OF THIS
PARAGRAPH, THE TERM "RELATED PERSON" MEANS:

S. 6359                            85                            A. 8559

  (I) A CORPORATION SUBJECT TO TAX UNDER THIS ARTICLE, WHERE THE TAXPAY-
ER AND THE CORPORATION ARE MEMBERS OF  THE  SAME  CONTROLLED  GROUP,  AS
DEFINED IN SECTION 267(F) OF THE INTERNAL REVENUE CODE;
  (II)  AN  INDIVIDUAL,  PARTNERSHIP,  ESTATE  OR TRUST, WHERE MORE THAN
FIFTY PERCENT IN VALUE OF THE  OUTSTANDING  STOCK  OF  THE  TAXPAYER  IS
OWNED,  DIRECTLY  OR INDIRECTLY, BY OR FOR SUCH INDIVIDUAL, PARTNERSHIP,
ESTATE OR TRUST OR BY OR FOR THE GRANTOR OF SUCH TRUST;
  (III) A CORPORATION SUBJECT TO TAX UNDER THIS ARTICLE, OR  A  PARTNER-
SHIP,  ESTATE  OR TRUST, IF THE SAME PERSON OWNS MORE THAN FIFTY PERCENT
IN VALUE OF THE OUTSTANDING STOCK OF THE TAXPAYER AND  MORE  THAN  FIFTY
PERCENT  IN  VALUE OF  THE OUTSTANDING STOCK OF THE CORPORATION, OR MORE
THAN FIFTY PERCENT OF THE CAPITAL OR PROFITS INTEREST  IN  THE  PARTNER-
SHIP,  OR  MORE  THAN  FIFTY  PERCENT  OF THE BENEFICIAL INTEREST IN THE
ESTATE OR TRUST;
  (IV) A PARTNERSHIP, ESTATE  OR  TRUST  OF  WHICH  THE  TAXPAYER  OWNS,
DIRECTLY  OR INDIRECTLY, MORE THAN FIFTY PERCENT OF THE CAPITAL, PROFITS
OR BENEFICIAL INTEREST.
  (B) IN DETERMINING WHETHER A PERSON IS A  RELATED  PERSON  WITHIN  THE
MEANING OF THIS SUBPARAGRAPH:
  (I)  STOCK  OWNED,  DIRECTLY  OR  INDIRECTLY, BY OR FOR A CORPORATION,
PARTNERSHIP, ESTATE OR TRUST SHALL BE CONSIDERED AS BEING OWNED  PROPOR-
TIONATELY BY OR FOR ITS SHAREHOLDERS, PARTNERS OR BENEFICIARIES;
  (II)  AN  INDIVIDUAL  SHALL  BE  CONSIDERED AS OWNING THE STOCK OWNED,
DIRECTLY OR INDIRECTLY, BY OR FOR HIS SPOUSE;
  (III) STOCK CONSTRUCTIVELY OWNED BY A PERSON BY REASON OF THE APPLICA-
TION OF ITEM (I) OF THIS CLAUSE SHALL, FOR THE PURPOSE OF APPLYING  ITEM
(I) OR (II) OF THIS CLAUSE, BE TREATED AS ACTUALLY OWNED BY SUCH PERSON.
  (F)  INCOME  LIMITATION. (I) IN THE EVENT THAT THE MODIFIED ENTIRE NET
INCOME OF THE TAXPAYER EXCEEDS TWO HUNDRED THOUSAND DOLLARS, THE  ALLOW-
ABLE SCHOOL DISTRICT PROPERTY TAXES UNDER PARAGRAPH (A) OF THIS SUBDIVI-
SION SHALL BE THE ELIGIBLE TAXES UNDER SUBPARAGRAPH (I) OF PARAGRAPH (E)
OF  THIS SUBDIVISION REDUCED BY THE PRODUCT OF THE AMOUNT OF SUCH ELIGI-
BLE TAXES AND A PERCENTAGE, SUCH PERCENTAGE TO BE DETERMINED  BY  MULTI-
PLYING  ONE HUNDRED PERCENT BY A FRACTION, THE NUMERATOR OF WHICH IS THE
LESSER OF ONE HUNDRED THOUSAND DOLLARS OR THE EXCESS OF  THE  TAXPAYER'S
MODIFIED  ENTIRE  NET  INCOME  OVER TWO HUNDRED THOUSAND DOLLARS AND THE
DENOMINATOR OF WHICH IS ONE HUNDRED THOUSAND DOLLARS.  FOR  PURPOSES  OF
THE  PRECEDING  SENTENCE,  THE  TERM "ELIGIBLE TAXES", WHERE THE ACREAGE
LIMITATION OF PARAGRAPH (E) OF THIS SUBDIVISION DOES  NOT  APPLY,  SHALL
MEAN  THE  TOTAL  SCHOOL DISTRICT PROPERTY TAXES PAID DURING THE TAXABLE
YEAR.
  (II) THE TERM "MODIFIED ENTIRE NET INCOME" MEANS THE ENTIRE NET INCOME
FOR THE TAXABLE YEAR REDUCED BY THE AMOUNT OF  PRINCIPAL  PAID  ON  FARM
INDEBTEDNESS DURING THE TAXABLE YEAR. THE TERM "FARM INDEBTEDNESS" MEANS
DEBT INCURRED OR REFINANCED WHICH IS SECURED BY FARM PROPERTY, WHERE THE
PROCEEDS  OF  THE  DEBT  ARE  DISBURSED FOR EXPENDITURES INCURRED IN THE
BUSINESS OF FARMING.
  (G) CARRYOVER. IN NO EVENT SHALL THE CREDIT PROVIDED HEREIN BE ALLOWED
IN AN AMOUNT WHICH WILL REDUCE THE TAX PAYABLE TO LESS  THAN  THE  FIXED
DOLLAR  MINIMUM AMOUNT PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION ONE OF
SECTION TWO HUNDRED TEN OF THIS ARTICLE.  IF,  HOWEVER,  THE  AMOUNT  OF
CREDIT ALLOWABLE UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE
TAX  TO SUCH AMOUNT, ANY AMOUNT OF CREDIT NOT DEDUCTIBLE IN SUCH TAXABLE
YEAR MAY BE CARRIED OVER TO THE FOLLOWING  YEAR  OR  YEARS  AND  MAY  BE
DEDUCTED  FROM  THE  TAXPAYER'S  TAX  FOR  SUCH YEAR OR YEARS. PROVIDED,
HOWEVER, IN LIEU OF CARRYING OVER THE UNUSED PORTION OF SUCH CREDIT, THE

S. 6359                            86                            A. 8559

TAXPAYER MAY ELECT TO TREAT SUCH UNUSED PORTION AS AN OVERPAYMENT OF TAX
TO BE CREDITED OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF  SECTION
ONE THOUSAND EIGHTY-SIX OF THIS CHAPTER EXCEPT THAT NO INTEREST SHALL BE
PAID ON SUCH OVERPAYMENT.
  (H)  NONQUALIFIED  USE. (I) NO CREDIT IN CONVERSION YEAR. IN THE EVENT
THAT QUALIFIED AGRICULTURAL PROPERTY IS CONVERTED  BY  THE  TAXPAYER  TO
NONQUALIFIED  USE,  CREDIT  UNDER  THIS SUBDIVISION SHALL NOT BE ALLOWED
WITH RESPECT TO SUCH PROPERTY FOR THE TAXABLE YEAR  OF  CONVERSION  (THE
CONVERSION YEAR).
  (II)  CREDIT RECAPTURE. IF THE CONVERSION BY THE TAXPAYER OF QUALIFIED
AGRICULTURAL PROPERTY TO NONQUALIFIED USE OCCURS DURING  THE  PERIOD  OF
THE  TWO  TAXABLE  YEARS FOLLOWING THE TAXABLE YEAR FOR WHICH THE CREDIT
UNDER THIS SUBDIVISION WAS FIRST CLAIMED WITH RESPECT TO SUCH  PROPERTY,
THE  CREDIT  ALLOWED WITH RESPECT TO SUCH PROPERTY FOR THE TAXABLE YEARS
PRIOR TO THE CONVERSION YEAR MUST BE ADDED BACK IN THE CONVERSION  YEAR.
WHERE  THE PROPERTY CONVERTED INCLUDES LAND, AND WHERE THE CONVERSION IS
OF ONLY A PORTION OF SUCH LAND, THE CREDIT ALLOWED WITH RESPECT  TO  THE
PROPERTY  CONVERTED SHALL BE DETERMINED BY MULTIPLYING THE ENTIRE CREDIT
UNDER THIS SUBDIVISION FOR THE TAXABLE YEARS  PRIOR  TO  THE  CONVERSION
YEAR  BY A FRACTION, THE NUMERATOR OF WHICH IS THE ACREAGE CONVERTED AND
THE DENOMINATOR OF WHICH IS THE ENTIRE ACREAGE OF SUCH LAND OWNED BY THE
TAXPAYER IMMEDIATELY PRIOR TO THE CONVERSION.
  (III) EXCEPTION TO RECAPTURE.  SUBPARAGRAPH  (II)  OF  THIS  PARAGRAPH
SHALL NOT APPLY TO THE CONVERSION OF PROPERTY WHERE THE CONVERSION IS BY
REASON  OF  INVOLUNTARY  CONVERSION,  WITHIN  THE MEANING OF SECTION ONE
THOUSAND THIRTY-THREE OF THE INTERNAL REVENUE CODE.
  (IV) CONVERSION TO NONQUALIFIED USE. FOR PURPOSES OF THIS PARAGRAPH, A
SALE OR OTHER DISPOSITION OF QUALIFIED AGRICULTURAL PROPERTY ALONE SHALL
NOT CONSTITUTE A CONVERSION TO A NONQUALIFIED USE.
  (I) SPECIAL RULES. FOR PURPOSES OF THIS SUBDIVISION, THE TERM "FEDERAL
GROSS  INCOME  FROM  FARMING"  SHALL  INCLUDE  GROSS  INCOME  FROM   THE
PRODUCTION OF MAPLE SYRUP, CIDER, CHRISTMAS TREES DERIVED FROM A MANAGED
CHRISTMAS  TREE  OPERATION WHETHER DUG FOR TRANSPLANTING OR CUT FROM THE
STUMP, OR FROM A COMMERCIAL  HORSE  BOARDING  OPERATION  AS  DEFINED  IN
SUBDIVISION THIRTEEN OF SECTION THREE HUNDRED ONE OF THE AGRICULTURE AND
MARKETS  LAW,  OR  FROM  THE SALE OF WINE FROM A LICENSED FARM WINERY AS
PROVIDED FOR IN ARTICLE SIX OF THE ALCOHOLIC BEVERAGE  CONTROL  LAW,  OR
FROM  THE  SALE  OF CIDER FROM A LICENSED FARM CIDERY AS PROVIDED FOR IN
SECTION FIFTY-EIGHT-C OF THE ALCOHOLIC BEVERAGE CONTROL LAW.
  (J) ELECTION TO DEEM GROSS INCOME OF NEW YORK C CORPORATION TO  SHARE-
HOLDERS.  FOR  PURPOSES  OF  THIS SUBDIVISION, FEDERAL GROSS INCOME FROM
FARMING SHALL BE ZERO FOR ANY TAXABLE YEAR OF A NEW YORK  C  CORPORATION
FOR WHICH THE ELECTION UNDER PARAGRAPH NINE OF SUBSECTION (N) OF SECTION
SIX HUNDRED SIX OF THIS CHAPTER IS IN EFFECT.
  12.  CREDIT FOR EMPLOYMENT OF PERSONS WITH DISABILITIES. (A) ALLOWANCE
OF CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS HERE-
INAFTER PROVIDED, AGAINST THE TAX IMPOSED BY THIS ARTICLE, FOR EMPLOYING
WITHIN THE STATE A QUALIFIED EMPLOYEE.
  (B) QUALIFIED EMPLOYEE. A QUALIFIED EMPLOYEE IS AN INDIVIDUAL:
  (1) WHO IS CERTIFIED BY THE EDUCATION DEPARTMENT, OR IN THE CASE OF AN
INDIVIDUAL WHO IS BLIND OR VISUALLY HANDICAPPED,  BY  THE  STATE  AGENCY
RESPONSIBLE  FOR  PROVISION OF VOCATIONAL REHABILITATION SERVICES TO THE
BLIND AND VISUALLY HANDICAPPED: (I) AS A PERSON WITH A DISABILITY  WHICH
CONSTITUTES  OR RESULTS IN A SUBSTANTIAL HANDICAP TO EMPLOYMENT AND (II)
AS HAVING COMPLETED OR AS RECEIVING  SERVICES  UNDER  AN  INDIVIDUALIZED
WRITTEN  REHABILITATION  PLAN  APPROVED  BY  THE EDUCATION DEPARTMENT OR

S. 6359                            87                            A. 8559

OTHER STATE AGENCY RESPONSIBLE FOR PROVIDING  VOCATIONAL  REHABILITATION
SERVICES TO SUCH INDIVIDUAL; AND
  (2) WHO HAS WORKED ON A FULL-TIME BASIS FOR THE EMPLOYER WHO IS CLAIM-
ING  THE  CREDIT  FOR  AT  LEAST ONE HUNDRED EIGHTY DAYS OR FOUR HUNDRED
HOURS.
  (C) AMOUNT OF CREDIT. EXCEPT AS PROVIDED  IN  PARAGRAPH  (D)  OF  THIS
SUBDIVISION,  THE  AMOUNT  OF CREDIT SHALL BE THIRTY-FIVE PERCENT OF THE
FIRST SIX THOUSAND DOLLARS IN QUALIFIED FIRST-YEAR WAGES EARNED BY  EACH
QUALIFIED  EMPLOYEE.  "QUALIFIED  FIRST-YEAR  WAGES" MEANS WAGES PAID OR
INCURRED BY THE TAXPAYER DURING THE TAXABLE YEAR TO QUALIFIED  EMPLOYEES
WHICH  ARE  ATTRIBUTABLE, WITH RESPECT TO ANY SUCH EMPLOYEE, TO SERVICES
RENDERED DURING THE ONE-YEAR PERIOD BEGINNING WITH THE DAY THE  EMPLOYEE
BEGINS WORK FOR THE TAXPAYER.
  (D)  CREDIT  WHERE  FEDERAL  WORK OPPORTUNITY TAX CREDIT APPLIES. WITH
RESPECT TO ANY QUALIFIED EMPLOYEE WHOSE QUALIFIED FIRST-YEAR WAGES UNDER
PARAGRAPH (C) OF THIS SUBDIVISION ALSO CONSTITUTE  QUALIFIED  FIRST-YEAR
WAGES  FOR  PURPOSES  OF  THE WORK OPPORTUNITY TAX CREDIT FOR VOCATIONAL
REHABILITATION REFERRALS UNDER SECTION FIFTY-ONE OF THE INTERNAL REVENUE
CODE, THE AMOUNT OF CREDIT UNDER  THIS SUBDIVISION SHALL BE  THIRTY-FIVE
PERCENT OF THE FIRST SIX THOUSAND DOLLARS IN QUALIFIED SECOND-YEAR WAGES
EARNED  BY EACH SUCH EMPLOYEE. "QUALIFIED SECOND-YEAR WAGES" MEANS WAGES
PAID OR INCURRED BY THE TAXPAYER DURING THE TAXABLE  YEAR  TO  QUALIFIED
EMPLOYEES  WHICH ARE ATTRIBUTABLE, WITH RESPECT TO ANY SUCH EMPLOYEE, TO
SERVICES RENDERED DURING THE ONE-YEAR PERIOD BEGINNING  ONE  YEAR  AFTER
THE EMPLOYEE BEGINS WORK FOR THE TAXPAYER.
  (E) CARRYOVER. THE CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXA-
BLE  YEAR  SHALL  NOT  REDUCE THE TAX DUE FOR SUCH YEAR TO LESS THAN THE
FIXED DOLLAR MINIMUM AMOUNT PRESCRIBED IN PARAGRAPH (D)  OF  SUBDIVISION
ONE  OF  SECTION TWO HUNDRED TEN OF THIS CHAPTER. HOWEVER, IF THE AMOUNT
OF CREDIT ALLOWABLE UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR  REDUCES
THE  TAX  TO  SUCH  AMOUNT,  ANY AMOUNT OF CREDIT NOT DEDUCTIBLE IN SUCH
TAXABLE YEAR MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS, AND MAY
BE DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS.
  (F)  COORDINATION  WITH  FEDERAL  WORK  OPPORTUNITY  TAX  CREDIT.  THE
PROVISIONS  OF  SECTION  FIFTY-ONE AND FIFTY-TWO OF THE INTERNAL REVENUE
CODE, AS SUCH SECTIONS APPLIED ON OCTOBER FIRST, NINETEEN HUNDRED  NINE-
TY-SIX,  THAT APPLY TO THE FEDERAL WORK OPPORTUNITY TAX CREDIT FOR VOCA-
TIONAL REHABILITATION REFERRALS SHALL APPLY TO  THE  CREDIT  UNDER  THIS
SUBDIVISION  TO  THE  EXTENT  THAT SUCH SECTIONS ARE CONSISTENT WITH THE
SPECIFIC PROVISIONS OF THIS SUBDIVISION, PROVIDED THAT IN THE EVENT OF A
CONFLICT THE PROVISIONS OF THIS SUBDIVISION SHALL CONTROL.
  13. CREDIT FOR PURCHASE OF  AN  AUTOMATED  EXTERNAL  DEFIBRILLATOR.  A
TAXPAYER  SHALL  BE  ALLOWED  A  CREDIT,  TO  BE COMPUTED AS HEREINAFTER
PROVIDED, AGAINST THE TAX IMPOSED BY THIS  ARTICLE,  FOR  THE  PURCHASE,
OTHER  THAN  FOR RESALE, OF AN AUTOMATED EXTERNAL DEFIBRILLATOR, AS SUCH
TERM IS DEFINED IN SECTION THREE THOUSAND-B OF THE  PUBLIC  HEALTH  LAW.
THE  AMOUNT  OF  CREDIT  SHALL  BE THE COST TO THE TAXPAYER OF AUTOMATED
EXTERNAL DEFIBRILLATORS PURCHASED DURING THE TAXABLE YEAR,  SUCH  CREDIT
NOT  TO EXCEED FIVE HUNDRED DOLLARS WITH RESPECT TO EACH UNIT PURCHASED.
THE CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR SHALL NOT
REDUCE THE TAX DUE FOR SUCH YEAR TO LESS THAN THE FIXED  DOLLAR  MINIMUM
AMOUNT  PRESCRIBED  IN  PARAGRAPH  (D) OF SUBDIVISION ONE OF SECTION TWO
HUNDRED TEN OF THIS CHAPTER.
  14. CREDIT FOR PURCHASE OF LONG-TERM CARE INSURANCE.  (A)  GENERAL.  A
TAXPAYER SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED BY THIS ARTI-
CLE  EQUAL TO TWENTY PERCENT OF THE PREMIUM PAID DURING THE TAXABLE YEAR

S. 6359                            88                            A. 8559

FOR LONG-TERM CARE INSURANCE. IN ORDER TO QUALIFY FOR SUCH  CREDIT,  THE
TAXPAYER'S PREMIUM PAYMENT MUST BE FOR THE PURCHASE OF OR FOR CONTINUING
COVERAGE UNDER A LONG-TERM CARE INSURANCE POLICY THAT QUALIFIES FOR SUCH
CREDIT  PURSUANT  TO  SECTION  ONE THOUSAND ONE HUNDRED SEVENTEEN OF THE
INSURANCE LAW.
  (B) CARRYOVER. THE CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY  YEAR
SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS THAN THE FIXED DOLLAR
MINIMUM AMOUNT PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION ONE OF SECTION
TWO  HUNDRED  TEN  OF  THIS  ARTICLE.  IF, HOWEVER, THE AMOUNT OF CREDIT
ALLOWABLE UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE TAX TO
SUCH AMOUNT, ANY AMOUNT OF CREDIT NOT DEDUCTIBLE IN  SUCH  TAXABLE  YEAR
MAY  BE  CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND MAY BE DEDUCTED
FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS.
  15. LOW-INCOME HOUSING CREDIT. (A) ALLOWANCE  OF  CREDIT.  A  TAXPAYER
SHALL  BE  ALLOWED A CREDIT AGAINST THE TAX IMPOSED BY THIS ARTICLE WITH
RESPECT TO THE OWNERSHIP OF ELIGIBLE LOW-INCOME BUILDINGS,  COMPUTED  AS
PROVIDED IN SECTION EIGHTEEN OF THIS CHAPTER.
  (B)  APPLICATION  OF  CREDIT. THE CREDIT AND CARRYOVERS OF SUCH CREDIT
ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR SHALL  NOT,  IN  THE
AGGREGATE,  REDUCE  THE  TAX  DUE  FOR  SUCH YEAR TO LESS THAN THE FIXED
DOLLAR MINIMUM AMOUNT PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION ONE  OF
SECTION TWO HUNDRED TEN OF THIS ARTICLE. HOWEVER, IF THE AMOUNT OF CRED-
IT OR CARRYOVERS OF SUCH CREDIT, OR BOTH, ALLOWED UNDER THIS SUBDIVISION
FOR ANY TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT, ANY AMOUNT OF CRED-
IT OR CARRYOVERS OF SUCH CREDIT THUS NOT DEDUCTIBLE IN SUCH TAXABLE YEAR
MAY  BE  CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND MAY BE DEDUCTED
FROM THE TAX FOR SUCH YEAR OR YEARS.
  (C) CREDIT RECAPTURE. FOR PROVISIONS REQUIRING  RECAPTURE  OF  CREDIT,
SEE SUBDIVISION (B) OF SECTION EIGHTEEN OF THIS CHAPTER.
  16.  GREEN  BUILDING CREDIT. (A) ALLOWANCE OF CREDIT. A TAXPAYER SHALL
BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED IN SECTION  NINETEEN  OF
THIS CHAPTER, AGAINST THE TAX IMPOSED BY THIS ARTICLE.
  (B) CARRYOVERS. THE CREDIT AND CARRYOVERS OF SUCH CREDIT ALLOWED UNDER
THIS  SUBDIVISION  FOR  ANY  TAXABLE  YEAR  SHALL NOT, IN THE AGGREGATE,
REDUCE THE TAX DUE FOR SUCH YEAR TO LESS THAN THE FIXED  DOLLAR  MINIMUM
AMOUNT  PRESCRIBED  IN  PARAGRAPH  (D) OF SUBDIVISION ONE OF SECTION TWO
HUNDRED TEN OF THIS ARTICLE. HOWEVER, IF THE AMOUNT OF CREDIT OR  CARRY-
OVERS  OF  SUCH  CREDIT, OR BOTH, ALLOWED UNDER THIS SUBDIVISION FOR ANY
TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT, ANY  AMOUNT  OF  CREDIT  OR
CARRYOVERS  OF  SUCH CREDIT THUS NOT DEDUCTIBLE IN SUCH TAXABLE YEAR MAY
BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND MAY BE DEDUCTED  FROM
THE TAX FOR SUCH YEAR OR YEARS.
  17.  BROWNFIELD  REDEVELOPMENT  TAX CREDIT. (A) ALLOWANCE OF CREDIT. A
TAXPAYER SHALL BE ALLOWED A  CREDIT,  TO  BE  COMPUTED  AS  PROVIDED  IN
SECTION  TWENTY-ONE  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 FIXED DOLLAR MINIMUM AMOUNT  PRESCRIBED  IN  PARAGRAPH  (D)  OF
SUBDIVISION  ONE OF SECTION TWO HUNDRED TEN OF THIS ARTICLE. HOWEVER, IF
THE AMOUNT OF CREDITS 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

S. 6359                            89                            A. 8559

PROVISIONS  OF  SUBSECTION  (C)  OF SECTION ONE THOUSAND EIGHTY-EIGHT OF
THIS CHAPTER NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
  18. REMEDIATED BROWNFIELD CREDIT FOR REAL PROPERTY TAXES FOR QUALIFIED
SITES.  (A)  ALLOWANCE  OF  CREDIT. A TAXPAYER WHICH IS A DEVELOPER OF A
QUALIFIED SITE SHALL BE ALLOWED A  CREDIT  FOR  ELIGIBLE  REAL  PROPERTY
TAXES,  TO BE COMPUTED AS PROVIDED IN SUBDIVISION (B) OF SECTION TWENTY-
TWO OF THIS CHAPTER, AGAINST  THE  TAX  IMPOSED  BY  THIS  ARTICLE.  FOR
PURPOSES OF THIS SUBDIVISION, THE TERMS "QUALIFIED SITE" AND "DEVELOPER"
SHALL  HAVE  THE  SAME MEANING AS SET FORTH IN PARAGRAPHS TWO AND THREE,
RESPECTIVELY, OF SUBDIVISION (A) OF SECTION TWENTY-TWO OF THIS CHAPTER.
  (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 FIXED DOLLAR MINIMUM AMOUNT  PRESCRIBED  IN  PARAGRAPH  (D)  OF
SUBDIVISION  ONE OF SECTION TWO HUNDRED TEN OF THIS ARTICLE. 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.
  19. ENVIRONMENTAL REMEDIATION INSURANCE CREDIT. (A) ALLOWANCE OF CRED-
IT.  A TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED IN
SECTION TWENTY-THREE OF THIS CHAPTER, AGAINST THE TAX  IMPOSED  BY  THIS
ARTICLE.
  (B)  APPLICATION  OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION
FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO  LESS
THAN  THE  FIXED  DOLLAR  MINIMUM  AMOUNT PRESCRIBED IN PARAGRAPH (D) OF
SUBDIVISION ONE OF SECTION TWO HUNDRED TEN OF THIS ARTICLE. HOWEVER,  IF
THE  AMOUNT  OF  CREDITS  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.
  20.  EMPIRE  STATE  FILM PRODUCTION CREDIT. (A) ALLOWANCE OF CREDIT. A
TAXPAYER WHO IS ELIGIBLE PURSUANT TO SECTION TWENTY-FOUR OF THIS CHAPTER
SHALL BE ALLOWED A CREDIT TO BE COMPUTED AS  PROVIDED  IN  SUCH  SECTION
TWENTY-FOUR 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  FIXED  DOLLAR  MINIMUM  AMOUNT PRESCRIBED IN PARAGRAPH (D) OF
SUBDIVISION ONE OF SECTION TWO HUNDRED TEN OF  THIS  ARTICLE.  PROVIDED,
HOWEVER,  THAT IF THE AMOUNT OF THE CREDIT ALLOWABLE UNDER THIS SUBDIVI-
SION FOR ANY TAXABLE YEAR REDUCES THE TAX TO  SUCH  AMOUNT,  THE  EXCESS
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.
  21.  SECURITY TRAINING TAX CREDIT. (A) ALLOWANCE OF CREDIT. A TAXPAYER
SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED IN  SECTION  TWEN-
TY-SIX 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

S. 6359                            90                            A. 8559

THAN  THE  FIXED  DOLLAR  MINIMUM  AMOUNT PRESCRIBED IN PARAGRAPH (D) OF
SUBDIVISION ONE OF SECTION TWO HUNDRED TEN OF THIS CHAPTER. HOWEVER,  IF
THE  AMOUNT  OF  CREDITS  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.
  22. CONSERVATION EASEMENT TAX CREDIT. (A) CREDIT ALLOWED. IN THE  CASE
OF  A  TAXPAYER WHO OWNS LAND THAT IS SUBJECT TO A CONSERVATION EASEMENT
HELD BY A PUBLIC OR PRIVATE CONSERVATION AGENCY, THERE SHALL BE  ALLOWED
A CREDIT FOR TWENTY-FIVE PERCENT OF THE ALLOWABLE SCHOOL DISTRICT, COUN-
TY  AND TOWN REAL PROPERTY TAXES ON SUCH LAND. IN NO SUCH CASE SHALL THE
CREDIT ALLOWED UNDER THIS SUBDIVISION  IN  COMBINATION  WITH  ANY  OTHER
CREDIT  FOR  SUCH  SCHOOL  DISTRICT, COUNTY AND TOWN REAL PROPERTY TAXES
UNDER THIS SECTION EXCEED SUCH TAXES.
  (B) CONSERVATION EASEMENT. FOR PURPOSES OF THIS SUBDIVISION, THE  TERM
"CONSERVATION  EASEMENT"  MEANS  A  PERPETUAL AND PERMANENT CONSERVATION
EASEMENT AS DEFINED IN ARTICLE FORTY-NINE OF THE ENVIRONMENTAL CONSERVA-
TION LAW THAT SERVES TO PROTECT OPEN SPACE, SCENIC,  NATURAL  RESOURCES,
BIODIVERSITY,   AGRICULTURAL,  WATERSHED  AND/OR  HISTORIC  PRESERVATION
RESOURCES. ANY CONSERVATION EASEMENT FOR WHICH A TAX CREDIT  IS  CLAIMED
UNDER  THIS  SUBDIVISION  SHALL BE FILED WITH THE DEPARTMENT OF ENVIRON-
MENTAL CONSERVATION, AS PROVIDED FOR IN ARTICLE FORTY-NINE OF THE  ENVI-
RONMENTAL  CONSERVATION  LAW AND SUCH CONSERVATION EASEMENT SHALL COMPLY
WITH THE PROVISIONS OF TITLE THREE OF SUCH ARTICLE, AND  THE  PROVISIONS
OF  SUBDIVISION  (H)  OF SECTION 170 OF THE INTERNAL REVENUE CODE. DEDI-
CATIONS OF LAND FOR OPEN SPACE THROUGH  THE  EXECUTION  OF  CONSERVATION
EASEMENTS  FOR  THE PURPOSE OF FULFILLING DENSITY REQUIREMENTS TO OBTAIN
SUBDIVISION OR BUILDING PERMITS SHALL NOT BE CONSIDERED  A  CONSERVATION
EASEMENT UNDER THIS SUBDIVISION.
  (C)  LAND.  FOR  PURPOSES OF THIS SUBDIVISION, THE TERM "LAND" MEANS A
FEE SIMPLE TITLE TO REAL PROPERTY LOCATED IN THIS STATE, WITH OR WITHOUT
IMPROVEMENTS THEREON; RIGHTS OF WAY; WATER AND  RIPARIAN  RIGHTS;  EASE-
MENTS;  PRIVILEGES  AND  ALL  OTHER  RIGHTS  OR INTERESTS OF ANY LAND OR
DESCRIPTION IN, RELATING TO OR CONNECTED WITH REAL  PROPERTY,  EXCLUDING
BUILDINGS, STRUCTURES, OR IMPROVEMENTS.
  (D) PUBLIC OR PRIVATE CONSERVATION AGENCY. FOR PURPOSES OF THIS SUBDI-
VISION,  THE  TERM  "PUBLIC  OR  PRIVATE  CONSERVATION AGENCY" MEANS ANY
STATE, LOCAL, OR FEDERAL GOVERNMENTAL BODY; OR ANY PRIVATE  NOT-FOR-PRO-
FIT  CHARITABLE  CORPORATION OR TRUST WHICH IS AUTHORIZED TO DO BUSINESS
IN THE STATE OF NEW YORK, IS ORGANIZED AND OPERATED TO PROTECT LAND  FOR
NATURAL  RESOURCES,  CONSERVATION  OR HISTORIC PRESERVATION PURPOSES, IS
EXEMPT FROM FEDERAL INCOME  TAXATION  UNDER  SECTION  501(C)(3)  OF  THE
INTERNAL  REVENUE  CODE, AND HAS THE POWER TO ACQUIRE, HOLD AND MAINTAIN
LAND AND/OR INTERESTS IN LAND FOR SUCH PURPOSES.
  (E) CREDIT LIMITATION. THE AMOUNT OF THE CREDIT THAT MAY BE CLAIMED BY
A TAXPAYER PURSUANT TO THIS SUBSECTION SHALL NOT  EXCEED  FIVE  THOUSAND
DOLLARS IN ANY GIVEN YEAR.
  (F)  APPLICATION OF THE CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVI-
SION FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR  TO
LESS THAN THE FIXED DOLLAR MINIMUM AMOUNT PRESCRIBED IN PARAGRAPH (D) OF
SUBDIVISION  ONE OF SECTION TWO HUNDRED TEN OF THIS ARTICLE. HOWEVER, IF
THE AMOUNT OF THE CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY  TAXABLE
YEAR  REDUCES  THE TAX TO SUCH AMOUNT, ANY AMOUNT OF THE CREDIT THUS NOT

S. 6359                            91                            A. 8559

DEDUCTIBLE IN SUCH TAXABLE YEAR SHALL BE TREATED AS  AN  OVERPAYMENT  OF
TAX  TO  BE  CREDITED  OR  REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF
SUBSECTION (C) OF SECTION ONE THOUSAND  EIGHTY-EIGHT  OF  THIS  CHAPTER,
EXCEPT THAT, NO INTEREST SHALL BE PAID THEREON.
  23.  EMPIRE STATE COMMERCIAL PRODUCTION CREDIT. (A) ALLOWANCE OF CRED-
IT.  A TAXPAYER THAT IS ELIGIBLE PURSUANT TO PROVISIONS OF SECTION TWEN-
TY-EIGHT OF THIS CHAPTER SHALL BE ALLOWED A CREDIT  TO  BE  COMPUTED  AS
PROVIDED IN SUCH SECTION 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  FIXED  DOLLAR  MINIMUM  AMOUNT PRESCRIBED IN PARAGRAPH (D) OF
SUBDIVISION ONE OF SECTION TWO HUNDRED TEN OF  THIS  ARTICLE.  PROVIDED,
HOWEVER,  THAT IF THE AMOUNT OF THE CREDIT ALLOWABLE UNDER THIS SUBDIVI-
SION FOR ANY TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT, FIFTY  PERCENT
OF  THE  EXCESS 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. THE BALANCE OF SUCH
CREDIT NOT CREDITED OR REFUNDED IN SUCH TAXABLE YEAR MAY BE CARRIED OVER
TO THE IMMEDIATELY SUCCEEDING TAXABLE YEAR AND MAY BE DEDUCTED FROM  THE
TAXPAYER'S TAX FOR SUCH YEAR. THE EXCESS, IF ANY, OF THE AMOUNT OF CRED-
IT OVER THE TAX FOR SUCH SUCCEEDING YEAR SHALL BE TREATED AS AN OVERPAY-
MENT 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.
  (C) EXPIRATION OF CREDIT. THE CREDIT ALLOWED  UNDER  THIS  SUBDIVISION
SHALL  NOT BE APPLICABLE TO TAXABLE YEARS BEGINNING ON OR AFTER DECEMBER
THIRTY-FIRST, TWO THOUSAND SEVENTEEN.
  24. BIOFUEL PRODUCTION  CREDIT.  (A)  GENERAL.  A  TAXPAYER  SHALL  BE
ALLOWED  A CREDIT, TO BE COMPUTED AS PROVIDED IN SECTION TWENTY-EIGHT OF
THIS CHAPTER ADDED AS PART X OF CHAPTER SIXTY-TWO OF  THE  LAWS  OF  TWO
THOUSAND  SIX,  AGAINST  THE  TAX  IMPOSED  BY  THIS ARTICLE. THE CREDIT
ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE
TAX DUE FOR SUCH YEAR TO LESS  THAN  THE  FIXED  DOLLAR  MINIMUM  AMOUNT
PRESCRIBED  IN  PARAGRAPH  (D) OF SUBDIVISION ONE OF SECTION TWO HUNDRED
TEN OF THIS ARTICLE.  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 ACCORD-
ANCE 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. THE TAX CREDIT ALLOWED PURSUANT TO THIS SECTION
SHALL APPLY TO TAXABLE YEARS BEGINNING BEFORE JANUARY FIRST,  TWO  THOU-
SAND TWENTY.
  25.  CLEAN  HEATING  FUEL  CREDIT.  (A)  GENERAL.  A TAXPAYER SHALL BE
ALLOWED A CREDIT AGAINST THE TAX IMPOSED BY THIS ARTICLE.  SUCH  CREDIT,
TO  BE  COMPUTED  AS HEREINAFTER PROVIDED, SHALL BE ALLOWED FOR BIOHEAT,
USED FOR SPACE HEATING OR HOT WATER PRODUCTION FOR RESIDENTIAL  PURPOSES
WITHIN  THIS  STATE  PURCHASED BEFORE JANUARY FIRST, TWO THOUSAND SEVEN-
TEEN. SUCH CREDIT SHALL BE $0.01 PER PERCENT OF BIODIESEL PER GALLON  OF
BIOHEAT,  NOT  TO  EXCEED  TWENTY  CENTS  PER  GALLON, PURCHASED BY SUCH
TAXPAYER.

S. 6359                            92                            A. 8559

  (B) DEFINITIONS. FOR PURPOSES OF THIS SUBDIVISION, THE FOLLOWING DEFI-
NITIONS SHALL APPLY:
  (I)  "BIODIESEL" SHALL MEAN A FUEL COMPRISED EXCLUSIVELY OF MONO-ALKYL
ESTERS OF LONG CHAIN FATTY ACIDS DERIVED FROM VEGETABLE OILS  OR  ANIMAL
FATS, DESIGNATED B100, WHICH MEETS THE SPECIFICATIONS OF AMERICAN SOCIE-
TY OF TESTING AND MATERIALS DESIGNATION D 6751.
  (II)  "BIOHEAT"  SHALL MEAN A FUEL COMPRISED OF BIODIESEL BLENDED WITH
CONVENTIONAL HOME HEATING OIL, WHICH MEETS  THE  SPECIFICATIONS  OF  THE
AMERICAN SOCIETY OF TESTING AND MATERIALS DESIGNATION D 396 OR D 975.
  (C)  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  FIXED  DOLLAR  MINIMUM  AMOUNT PRESCRIBED IN PARAGRAPH (D) OF
SUBDIVISION ONE OF SECTION TWO HUNDRED TEN OF THIS ARTICLE. 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.
  26.  CREDIT FOR REHABILITATION OF HISTORIC PROPERTIES. (A) APPLICATION
OF CREDIT. (I) FOR TAXABLE YEARS BEGINNING ON OR  AFTER  JANUARY  FIRST,
TWO  THOUSAND  TEN,  AND  BEFORE  JANUARY  FIRST, TWO THOUSAND TWENTY, A
TAXPAYER SHALL BE ALLOWED A CREDIT AS HEREINAFTER PROVIDED, AGAINST  THE
TAX  IMPOSED  BY THIS ARTICLE, IN AN AMOUNT EQUAL TO ONE HUNDRED PERCENT
OF THE AMOUNT OF CREDIT ALLOWED THE TAXPAYER FOR THE SAME  TAXABLE  YEAR
WITH  RESPECT  TO A CERTIFIED HISTORIC STRUCTURE UNDER SUBSECTION (C)(2)
OF SECTION 47 OF THE INTERNAL REVENUE CODE WITH RESPECT TO  A  CERTIFIED
HISTORIC  STRUCTURE  LOCATED  WITHIN  THE  STATE. PROVIDED, HOWEVER, THE
CREDIT SHALL NOT EXCEED FIVE MILLION DOLLARS.
  (II) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO  THOU-
SAND  TWENTY,  A  TAXPAYER  SHALL  BE  ALLOWED  A  CREDIT AS HEREINAFTER
PROVIDED, AGAINST THE TAX IMPOSED BY THIS ARTICLE, IN AN AMOUNT EQUAL TO
THIRTY PERCENT OF THE AMOUNT OF CREDIT ALLOWED THE TAXPAYER FOR THE SAME
TAXABLE YEAR WITH  RESPECT  TO  A  CERTIFIED  HISTORIC  STRUCTURE  UNDER
SUBSECTION  (C)(3)  OF  SECTION  47  OF  THE  INTERNAL REVENUE CODE WITH
RESPECT TO A CERTIFIED HISTORIC  STRUCTURE  LOCATED  WITHIN  THE  STATE.
PROVIDED,  HOWEVER,  THE  CREDIT  SHALL  NOT EXCEED ONE HUNDRED THOUSAND
DOLLARS.
  (B) IF THE TAXPAYER IS A PARTNER IN A PARTNERSHIP OR A SHAREHOLDER  IN
A  NEW  YORK S CORPORATION, THEN THE CREDIT CAPS IMPOSED IN SUBPARAGRAPH
(A) OF THIS PARAGRAPH SHALL BE APPLIED AT THE ENTITY LEVEL, SO THAT  THE
AGGREGATE  CREDIT  ALLOWED  TO  ALL THE PARTNERS OR SHAREHOLDERS OF EACH
SUCH ENTITY IN THE TAXABLE YEAR DOES NOT EXCEED THE CREDIT CAP  THAT  IS
APPLICABLE IN THAT TAXABLE YEAR.
  (B)  TAX CREDITS ALLOWED PURSUANT TO THIS SUBDIVISION SHALL BE ALLOWED
IN THE TAXABLE YEAR THAT  THE  QUALIFIED  REHABILITATION  IS  PLACED  IN
SERVICE UNDER SECTION 167 OF THE FEDERAL INTERNAL REVENUE CODE.
  (C)  IF  THE CREDIT ALLOWED THE TAXPAYER PURSUANT TO SECTION 47 OF THE
INTERNAL REVENUE CODE WITH RESPECT  TO  A  QUALIFIED  REHABILITATION  IS
RECAPTURED  PURSUANT  TO  SUBSECTION  (A)  OF SECTION 50 OF THE INTERNAL
REVENUE CODE, A PORTION OF THE CREDIT ALLOWED UNDER THIS SUBSECTION MUST
BE ADDED BACK IN THE SAME TAXABLE YEAR AND IN THE SAME PROPORTION AS THE
FEDERAL CREDIT.
  (D) THE CREDIT ALLOWED UNDER THIS SUBDIVISION  FOR  ANY  TAXABLE  YEAR
SHALL  NOT  REDUCE  THE  TAX  DUE  FOR SUCH YEAR TO LESS THAN THE AMOUNT

S. 6359                            93                            A. 8559

PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION ONE OF  SECTION  TWO  HUNDRED
TEN  OF THIS ARTICLE. HOWEVER, IF THE AMOUNT OF THE 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 RECREDITED OR REFUNDED IN ACCORD-
ANCE 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.
  (E)  TO  BE  ELIGIBLE FOR THE CREDIT ALLOWABLE UNDER THIS SUBDIVISION,
THE REHABILITATION PROJECT SHALL BE IN WHOLE OR IN PART LOCATED WITHIN A
CENSUS TRACT WHICH IS IDENTIFIED  AS  BEING  AT  OR  BELOW  ONE  HUNDRED
PERCENT  OF  THE  STATE MEDIAN FAMILY INCOME AS CALCULATED AS OF JANUARY
FIRST OF EACH YEAR USING THE MOST RECENT FIVE  YEAR  ESTIMATE  FROM  THE
AMERICAN COMMUNITY SURVEY PUBLISHED BY THE UNITED STATES CENSUS BUREAU.
  27.  CREDITS  OF NEW YORK S CORPORATIONS. (A) GENERAL. NOTWITHSTANDING
THE PROVISIONS OF THIS SECTION, NO CARRYOVER OF CREDIT  ALLOWABLE  IN  A
NEW  YORK C YEAR SHALL BE DEDUCTED FROM THE TAX OTHERWISE DUE UNDER THIS
ARTICLE IN A NEW YORK S YEAR, AND NO CREDIT ALLOWABLE IN A  NEW  YORK  S
YEAR,  OR  CARRYOVER  OF  SUCH  CREDIT,  SHALL  BE DEDUCTED FROM THE TAX
IMPOSED BY THIS ARTICLE.  HOWEVER, A NEW YORK S YEAR SHALL BE TREATED AS
A TAXABLE YEAR FOR PURPOSES OF DETERMINING THE NUMBER OF  TAXABLE  YEARS
TO  WHICH A CREDIT MAY BE CARRIED OVER UNDER THIS SECTION. NOTWITHSTAND-
ING THE FIRST SENTENCE OF THIS SUBDIVISION, HOWEVER, THE CREDIT FOR  THE
SPECIAL  ADDITIONAL  MORTGAGE RECORDING TAX SHALL BE ALLOWED AS PROVIDED
IN SUBDIVISION FIFTEEN OF THIS SECTION, AND THE CARRYOVER  OF  ANY  SUCH
CREDIT  SHALL  BE  DETERMINED  WITHOUT  REGARD  TO WHETHER THE CREDIT IS
CARRIED FROM A NEW YORK C YEAR TO A NEW YORK S YEAR OR VICE-VERSA.
  28. NET OPERATING LOSS CONVERSION CREDIT. (A) BASE  YEAR  DESIGNATION.
FOR  THE  PURPOSES  OF  THIS SUBDIVISION, THE TERM "BASE YEAR" MEANS THE
LAST TAXABLE YEAR BEGINNING ON OR  AFTER  JANUARY  FIRST,  TWO  THOUSAND
THIRTEEN AND BEFORE JANUARY FIRST, TWO THOUSAND FOURTEEN.
  (B) ALLOWANCE OF CREDIT. A TAXPAYER WHICH HAS ANY UNABSORBED NET OPER-
ATING  LOSS CARRYOVER, REFERRED TO IN THIS SUBDIVISION AS A "NOL", AFTER
CALCULATING ITS ENTIRE NET INCOME UNDER ARTICLE NINE-A OR ARTICLE  THIR-
TY-TWO  FOR  THE  BASE  YEAR  SHALL  BE ALLOWED A CREDIT AGAINST THE TAX
IMPOSED BY THIS ARTICLE FOR TAXABLE YEARS BEGINNING ON OR AFTER  JANUARY
FIRST, TWO THOUSAND FIFTEEN.
  (C)  CALCULATION  OF  CREDIT.  THE  TOTAL AMOUNT OF THE NOL CONVERSION
CREDIT SHALL BE THE PRODUCT OF:
  (I) ANY UNABSORBED PORTION OF NET OPERATING LOSS AS  CALCULATED  UNDER
PARAGRAPH  (F)  OF SUBDIVISION NINE OF SECTION TWO HUNDRED EIGHT OF THIS
ARTICLE OR SUBSECTION (K-1) OF SECTION FOURTEEN HUNDRED  FIFTY-THREE  OF
ARTICLE  THIRTY-TWO, AS SUCH SECTIONS WERE IN EFFECT ON DECEMBER THIRTY-
FIRST, TWO THOUSAND FOURTEEN, THAT WAS NOT DEDUCTIBLE IN PREVIOUS  TAXA-
BLE  YEARS  AND  WAS  ELIGIBLE FOR CARRYOVER ON THE LAST DAY OF THE BASE
YEAR, INCLUDING ANY NET OPERATING LOSS SUSTAINED BY THE TAXPAYER  DURING
THE BASE YEAR;
  (II) THE TAXPAYER'S BUSINESS ALLOCATION PERCENTAGE AS CALCULATED UNDER
PARAGRAPH  (A)  OF  SUBDIVISION THREE OF SECTION TWO HUNDRED TEN OF THIS
ARTICLE FOR THE BASE YEAR, OR THE TAXPAYER'S  ALLOCATION  PERCENTAGE  AS
CALCULATED  UNDER SECTION FOURTEEN HUNDRED FIFTY-FOUR OF ARTICLE THIRTY-
TWO FOR PURPOSES OF ALLOCATING ENTIRE NET INCOME FOR THE BASE YEAR (SUCH
ALLOCATION PERCENTAGES REFERRED TO IN THIS  SUBDIVISION  AS  "BAP"),  AS
SUCH  SECTIONS  WERE  IN  EFFECT  ON DECEMBER THIRTY-FIRST, TWO THOUSAND
FOURTEEN; AND

S. 6359                            94                            A. 8559

  (III) THE TAXPAYER'S TAX RATE FOR THE BASE YEAR  AS  CALCULATED  UNDER
PARAGRAPH  (A)  OF  SUBDIVISION  ONE  OF SECTION TWO HUNDRED TEN OF THIS
ARTICLE OR SUBSECTION (A) OF  SECTION  FOURTEEN  HUNDRED  FIFTY-FIVE  OF
ARTICLE  THIRTY-TWO, AS SUCH SECTIONS WERE IN EFFECT ON DECEMBER THIRTY-
FIRST, TWO THOUSAND FOURTEEN.
  (D)  APPLICATION  OF  CREDIT.  A TAXPAYER, OTHER THAN A SMALL BUSINESS
CORPORATION AS DEFINED IN PARAGRAPH (E) OF THIS SUBDIVISION, IS  ALLOWED
AN  ANNUAL NOL CONVERSION CREDIT THAT IS EQUAL TO ONE-TENTH OF THE TOTAL
NOL CONVERSION CREDIT AS CALCULATED IN PARAGRAPH (C)  OF  THIS  SUBDIVI-
SION.  SUCH  CREDIT  SHALL NOT BE ALLOWED AGAINST THE TAX COMPUTED UNDER
PARAGRAPH (B) OR (D) OF SUBDIVISION ONE OF SECTION TWO  HUNDRED  TEN  OF
THIS ARTICLE.
  (E) SMALL BUSINESS PROVISIONS. (I) FOR PURPOSES OF THIS SUBDIVISION, A
SMALL  BUSINESS  CORPORATION IS A CORPORATION DEFINED IN PARAGRAPH THREE
OF SUBSECTION (C) OF SECTION TWELVE HUNDRED FORTY-FOUR OF  THE  INTERNAL
REVENUE  CODE (WITHOUT REGARD TO THE SECOND SENTENCE OF SUBPARAGRAPH (A)
THEREOF) AS OF THE LAST DAY OF THE BASE YEAR.
  (II) APPLICATION OF CREDIT. A SMALL BUSINESS CORPORATION IS ALLOWED TO
CLAIM THE TOTAL NOL CONVERSION CREDIT AS CALCULATED IN PARAGRAPH (C)  OF
THIS  SUBDIVISION  IN  A  TAXABLE YEAR. SUCH CREDIT SHALL NOT BE ALLOWED
AGAINST THE TAX COMPUTED UNDER PARAGRAPH (B) OR (D) OF  SUBDIVISION  ONE
OF SECTION TWO HUNDRED TEN OF THIS ARTICLE.
  (F)  CARRYOVER.  (I)  THE  CREDIT  ALLOWED BY THIS SUBDIVISION FOR ANY
TAXABLE YEAR MAY ONLY REDUCE THE TAX DUE FOR SUCH YEAR TO THE HIGHER  OF
THE  AMOUNT  PRESCRIBED  IN  PARAGRAPH  (B) OR (D) OF SUBDIVISION ONE OF
SECTION TWO HUNDRED TEN OF THIS ARTICLE.
  (II) HOWEVER, IF THE AMOUNT OF CREDIT ALLOWABLE UNDER THIS SUBDIVISION
FOR ANY TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT, OR, IF THE TAXPAYER
IS REQUIRED TO PAY A TAX UNDER  PARAGRAPH  (B)  OF  SUBDIVISION  ONE  OF
SECTION  TWO HUNDRED TEN OF THIS ARTICLE, ANY REMAINING AMOUNT OF CREDIT
ALLOWED FOR THAT TAXABLE YEAR MAY BE CARRIED OVER TO  THE  NEXT  TAXABLE
YEAR  OR  YEARS FOLLOWING SUCH TAXABLE YEAR AND MAY BE DEDUCTED FROM THE
TAXPAYER'S TAX FOR SUCH YEAR OR YEARS.
  (G) COMBINED GROUPS. (I) WHERE A TAXPAYER  WAS  PROPERLY  INCLUDED  OR
REQUIRED  TO BE INCLUDED IN A COMBINED REPORT FOR THE BASE YEAR PURSUANT
TO SUBDIVISION FOUR OF SECTION TWO HUNDRED ELEVEN OF THIS  ARTICLE,  THE
COMBINED  GROUP  SHALL  CALCULATE  ITS CREDIT USING THE COMBINED GROUP'S
TOTAL NOL, BAP, AND TAX RATE ACCORDING TO PARAGRAPH (C) OF THIS SUBDIVI-
SION.
  (II) IF THE MEMBERS OF THE COMBINED GROUP IN A COMBINED REPORT FOR THE
BASE YEAR ARE THE SAME AS  THE  MEMBERS  OF  THE  COMBINED  GROUP  IN  A
COMBINED  REPORT  FOR  THE  TAXABLE YEAR IMMEDIATELY SUCCEEDING THE BASE
YEAR, THE CREDIT SHALL BE CALCULATED USING THE COMBINED GROUP'S NOL, BAP
AND APPLICABLE TAX RATE ACCORDING TO PARAGRAPH (C) OF THIS  SUBDIVISION.
IF  A  TAXPAYER  WAS PROPERLY INCLUDED IN A COMBINED REPORT FOR THE BASE
YEAR AND FILES A SEPARATE REPORT IN A SUBSEQUENT TAXABLE YEAR, THEN  THE
AMOUNT  OF REMAINING NOL CONVERSION CREDIT ALLOWED TO THE SEPARATE FILER
SHALL BE PROPORTIONATE TO THE AMOUNT THAT SUCH TAXPAYER  CONTRIBUTED  TO
THE  ORIGINAL NOL CONVERSION CREDIT ON A COMBINED BASIS, AND THE REMAIN-
ING NOL CONVERSION CREDIT  ALLOWED  TO  THE  REMAINING  MEMBERS  OF  THE
COMBINED  GROUP  SHALL  BE  REDUCED  BY  THE AMOUNT OF PROPORTIONATE NOL
CONVERSION CREDIT ALLOWED TO THE TAXPAYER OR TAXPAYERS FILING  SEPARATE-
LY.  IF A COMBINED GROUP INCLUDES ADDITIONAL MEMBERS IN THE TAXABLE YEAR
IMMEDIATELY SUCCEEDING THE BASE  YEAR  WHO  WERE  NOT  INCLUDED  IN  THE
COMBINED  GROUP DURING THE BASE YEAR, EACH INDIVIDUAL COMBINED GROUP AND
SEPARATELY FILING TAXPAYER SHALL CALCULATE ITS CREDIT FOR THE BASE  YEAR

S. 6359                            95                            A. 8559

AND  THE  SUM OF THE CREDITS SHALL BE THE COMBINED NOL CONVERSION CREDIT
OF THE COMBINED GROUP.
  (H)  EXPIRATION  OF  CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION
SHALL NOT BE APPLICABLE TO TAXABLE YEARS BEGINNING ON OR  AFTER  JANUARY
FIRST, TWO THOUSAND THIRTY-FIVE.
  29.  HIRE  A  VET  CREDIT.  (A) ALLOWANCE OF CREDIT. FOR TAXABLE YEARS
BEGINNING ON OR AFTER JANUARY FIRST, TWO  THOUSAND  FIFTEEN  AND  BEFORE
JANUARY  FIRST,  TWO  THOUSAND  SEVENTEEN, A TAXPAYER SHALL BE ALLOWED A
CREDIT, TO BE COMPUTED AS PROVIDED IN THIS SUBDIVISION, AGAINST THE  TAX
IMPOSED BY THIS ARTICLE, FOR HIRING AND EMPLOYING, FOR NOT LESS THAN ONE
YEAR  AND  FOR  NOT  LESS  THAN THIRTY-FIVE HOURS EACH WEEK, A QUALIFIED
VETERAN WITHIN THE STATE. THE TAXPAYER MAY CLAIM THE CREDIT IN THE  YEAR
IN  WHICH  THE QUALIFIED VETERAN COMPLETES ONE YEAR OF EMPLOYMENT BY THE
TAXPAYER. IF THE TAXPAYER CLAIMS THE CREDIT ALLOWED UNDER THIS  SUBDIVI-
SION, THE TAXPAYER MAY NOT USE THE HIRING OF A QUALIFIED VETERAN THAT IS
THE BASIS FOR THIS CREDIT IN THE BASIS OF ANY OTHER CREDIT ALLOWED UNDER
THIS ARTICLE.
  (B) QUALIFIED VETERAN. A QUALIFIED VETERAN IS AN INDIVIDUAL:
  (1)  WHO  SERVED  ON  ACTIVE DUTY IN THE UNITED STATES ARMY, NAVY, AIR
FORCE, MARINE CORPS, COAST GUARD OR THE RESERVES THEREOF, OR WHO  SERVED
IN  ACTIVE MILITARY SERVICE OF THE UNITED STATES AS A MEMBER OF THE ARMY
NATIONAL GUARD, AIR NATIONAL GUARD, NEW YORK GUARD  OR  NEW  YORK  NAVAL
MILITIA;  WHO  WAS  RELEASED  FROM  ACTIVE  DUTY BY GENERAL OR HONORABLE
DISCHARGE AFTER SEPTEMBER ELEVENTH, TWO THOUSAND ONE;
  (2) WHO COMMENCES EMPLOYMENT BY THE QUALIFIED  TAXPAYER  ON  OR  AFTER
JANUARY  FIRST,  TWO  THOUSAND  FOURTEEN,  AND BEFORE JANUARY FIRST, TWO
THOUSAND SIXTEEN; AND
  (3) WHO CERTIFIES BY SIGNED AFFIDAVIT, UNDER PENALTY OF PERJURY,  THAT
HE OR SHE HAS NOT BEEN EMPLOYED FOR THIRTY-FIVE OR MORE HOURS DURING ANY
WEEK  IN  THE  ONE HUNDRED EIGHTY DAY PERIOD IMMEDIATELY PRIOR TO HIS OR
HER EMPLOYMENT BY THE TAXPAYER.
  (C) EMPLOYER PROHIBITION. AN EMPLOYER SHALL NOT DISCHARGE AN  EMPLOYEE
AND  HIRE  A QUALIFYING VETERAN SOLELY FOR THE PURPOSE OF QUALIFYING FOR
THIS CREDIT.
  (D) AMOUNT OF CREDIT. THE AMOUNT OF THE CREDIT SHALL BE TEN PERCENT OF
THE TOTAL AMOUNT OF WAGES PAID  TO  THE  QUALIFIED  VETERAN  DURING  THE
VETERAN'S FIRST FULL YEAR OF EMPLOYMENT. PROVIDED, HOWEVER, THAT, IF THE
QUALIFIED  VETERAN IS A DISABLED VETERAN, AS DEFINED IN PARAGRAPH (B) OF
SUBDIVISION ONE OF SECTION EIGHTY-FIVE OF THE  CIVIL  SERVICE  LAW,  THE
AMOUNT  OF  THE  CREDIT  SHALL BE FIFTEEN PERCENT OF THE TOTAL AMOUNT OF
WAGES PAID TO THE QUALIFIED VETERAN DURING THE VETERAN'S FIRST FULL YEAR
OF EMPLOYMENT. THE CREDIT ALLOWED PURSUANT TO THIS SUBDIVISION SHALL NOT
EXCEED IN ANY TAXABLE YEAR, FIVE  THOUSAND  DOLLARS  FOR  ANY  QUALIFIED
VETERAN  AND FIFTEEN THOUSAND DOLLARS FOR ANY QUALIFIED VETERAN WHO IS A
DISABLED VETERAN.
  (E) CARRYOVER. THE CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXA-
BLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR  TO  LESS  THAN  THE
AMOUNT  PRESCRIBED  IN  PARAGRAPH  (D) OF SUBDIVISION ONE OF SECTION TWO
HUNDRED TEN OF THIS ARTICLE. HOWEVER, IF THE AMOUNT OF CREDIT  ALLOWABLE
UNDER  THIS  SUBDIVISION  FOR  ANY  TAXABLE YEAR REDUCES THE TAX TO SUCH
AMOUNT, ANY AMOUNT OF CREDIT NOT DEDUCTIBLE IN SUCH TAXABLE YEAR MAY  BE
CARRIED  OVER  TO THE FOLLOWING THREE YEARS AND MAY BE DEDUCTED FROM THE
TAXPAYER'S TAX FOR SUCH YEAR OR YEARS.
  30. ALTERNATIVE FUELS AND ELECTRIC VEHICLE RECHARGING PROPERTY CREDIT.
(A) GENERAL. A TAXPAYER SHALL BE ALLOWED A CREDIT,  TO  BE  COMPUTED  AS
HEREINAFTER PROVIDED, AGAINST THE TAX IMPOSED BY THIS ARTICLE FOR ALTER-

S. 6359                            96                            A. 8559

NATIVE  FUEL  VEHICLE REFUELING AND ELECTRIC VEHICLE RECHARGING PROPERTY
PLACED IN SERVICE DURING THE TAXABLE YEAR.
  (B)  ALTERNATIVE  FUEL VEHICLE REFUELING PROPERTY AND ELECTRIC VEHICLE
RECHARGING PROPERTY. THE CREDIT UNDER THIS SUBDIVISION  FOR  ALTERNATIVE
FUEL VEHICLE REFUELING PROPERTY AND ELECTRIC VEHICLE RECHARGING PROPERTY
SHALL  EQUAL  FOR EACH INSTALLATION OF PROPERTY THE LESSER OF FIVE THOU-
SAND DOLLARS OR FIFTY PERCENT OF THE COST OF ANY SUCH PROPERTY:
  (I) WHICH IS LOCATED IN THIS STATE;
  (II) WHICH CONSTITUTES ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY  OR
ELECTRIC VEHICLE RECHARGING PROPERTY; AND
  (III)  FOR  WHICH NONE OF THE COST HAS BEEN PAID FOR FROM THE PROCEEDS
OF GRANTS, INCLUDING GRANTS FROM THE NEW YORK STATE ENERGY RESEARCH  AND
DEVELOPMENT AUTHORITY OR THE NEW YORK POWER AUTHORITY.
  (C)  DEFINITIONS.  (I)  THE  TERM  "ALTERNATIVE FUEL VEHICLE REFUELING
PROPERTY" MEANS ALL OF THE EQUIPMENT NEEDED  TO  DISPENSE  ANY  FUEL  AT
LEAST EIGHTY-FIVE PERCENT OF THE VOLUME OF WHICH CONSISTS OF ONE OR MORE
OF THE FOLLOWING: NATURAL GAS, LIQUIFIED NATURAL GAS, LIQUIFIED PETROLE-
UM, OR HYDROGEN.
  (II)  THE TERM "ELECTRIC VEHICLE RECHARGING PROPERTY" MEANS ALL OF THE
EQUIPMENT NEEDED TO CONVEY ELECTRIC POWER  FROM  THE  ELECTRIC  GRID  OR
ANOTHER POWER SOURCE TO AN ONBOARD VEHICLE ENERGY STORAGE SYSTEM.
  (D) CARRYOVERS. IN NO EVENT SHALL THE CREDIT UNDER THIS SUBDIVISION BE
ALLOWED  IN AN AMOUNT WHICH WILL REDUCE THE TAX PAYABLE TO LESS THAN THE
AMOUNT PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION  ONE  OF  SECTION  TWO
HUNDRED  TEN  OF  THIS ARTICLE. PROVIDED, HOWEVER, THAT IF THE AMOUNT OF
CREDIT ALLOWABLE UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE
TAX TO SUCH AMOUNT, ANY AMOUNT OF CREDIT NOT DEDUCTIBLE IN SUCH  TAXABLE
YEAR  MAY  BE  CARRIED  OVER  TO  THE FOLLOWING YEAR OR YEARS AND MAY BE
DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS.
  (E) CREDIT RECAPTURE. IF, AT ANY TIME BEFORE THE END OF  ITS  RECOVERY
PERIOD,  ALTERNATIVE FUEL VEHICLE REFUELING OR ELECTRIC VEHICLE RECHARG-
ING PROPERTY CEASES TO BE QUALIFIED, A RECAPTURE AMOUNT  MUST  BE  ADDED
BACK IN THE YEAR IN WHICH SUCH CESSATION OCCURS.
  (I)  ALTERNATIVE  FUEL  VEHICLE REFUELING PROPERTY OR ELECTRIC VEHICLE
RECHARGING PROPERTY CEASES TO BE QUALIFIED IF:
  (I) THE PROPERTY NO LONGER QUALIFIES AS ALTERNATIVE FUEL VEHICLE REFU-
ELING PROPERTY OR ELECTRIC VEHICLE RECHARGING PROPERTY; OR
  (II) FIFTY PERCENT OR MORE OF THE USE OF THE  PROPERTY  IN  A  TAXABLE
YEAR IS OTHER THAN IN A TRADE OR BUSINESS IN THIS STATE; OR
  (III)  THE  TAXPAYER RECEIVING THE CREDIT UNDER THIS SUBDIVISION SELLS
OR DISPOSES OF THE PROPERTY AND KNOWS OR HAS REASON  TO  KNOW  THAT  THE
PROPERTY  WILL  BE USED IN A MANNER DESCRIBED IN CLAUSES (I) AND (II) OF
THIS SUBPARAGRAPH.
  (II) RECAPTURE AMOUNT. THE RECAPTURE AMOUNT IS  EQUAL  TO  THE  CREDIT
ALLOWABLE UNDER THIS SUBDIVISION MULTIPLIED BY A FRACTION, THE NUMERATOR
OF  WHICH IS THE TOTAL RECOVERY PERIOD FOR THE PROPERTY MINUS THE NUMBER
OF RECOVERY YEARS PRIOR TO, BUT NOT INCLUDING, THE RECAPTURE  YEAR,  AND
THE DENOMINATOR OF WHICH IS THE TOTAL RECOVERY PERIOD.
  (F)  TERMINATION. THE CREDIT ALLOWED BY PARAGRAPH (B) OF THIS SUBDIVI-
SION  SHALL  NOT  APPLY  IN  TAXABLE  YEARS  BEGINNING  AFTER   DECEMBER
THIRTY-FIRST, TWO THOUSAND SEVENTEEN.
  31. EXCELSIOR JOBS PROGRAM CREDIT. (A) ALLOWANCE OF CREDIT. A TAXPAYER
WILL  BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED IN SECTION THIRTY-
ONE OF THIS CHAPTER, AGAINST THE TAX IMPOSED BY THIS ARTICLE.
  (B) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER  THIS  SUBDIVISION
FOR  ANY  TAXABLE  YEAR MAY NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS

S. 6359                            97                            A. 8559

THAN THE AMOUNT PRESCRIBED  IN  PARAGRAPH  (D)  OF  SUBDIVISION  ONE  OF
SECTION TWO HUNDRED TEN OF THIS ARTICLE. HOWEVER, IF THE AMOUNT OF CRED-
IT  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 WILL 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 WILL BE PAID THEREON.
  32. EMPIRE STATE FILM POST PRODUCTION CREDIT. (A) ALLOWANCE OF CREDIT.
A TAXPAYER WHO IS ELIGIBLE PURSUANT TO SECTION THIRTY-ONE OF THIS  CHAP-
TER SHALL BE ALLOWED A CREDIT TO BE COMPUTED AS PROVIDED IN SUCH SECTION
THIRTY-ONE AGAINST THE TAX IMPOSED BY THIS ARTICLE.
  (B)  APPLICATION  OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION
FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO  LESS
THAN  THE  AMOUNT  PRESCRIBED  IN  PARAGRAPH  (D)  OF SUBDIVISION ONE OF
SECTION TWO HUNDRED TEN OF THIS ARTICLE. PROVIDED, HOWEVER, THAT IF  THE
AMOUNT  OF  THE  CREDIT ALLOWABLE UNDER THIS SUBDIVISION FOR ANY TAXABLE
YEAR REDUCES THE TAX TO SUCH AMOUNT, FIFTY PERCENT OF THE  EXCESS  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. THE BALANCE OF SUCH CREDIT NOT CREDITED
OR REFUNDED IN SUCH TAXABLE YEAR MAY BE A CARRYOVER TO  THE  IMMEDIATELY
SUCCEEDING  TAXABLE YEAR AND MAY BE DEDUCTED FROM THE TAXPAYER'S TAX FOR
SUCH YEAR. THE EXCESS, IF ANY, OF THE AMOUNT OF THE CREDIT OVER THE  TAX
FOR SUCH SUCCEEDING 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.
  33. TEMPORARY DEFERRAL NONREFUNDABLE PAYOUT CREDIT. (A)  ALLOWANCE  OF
CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED
IN  SUBDIVISION  ONE OF SECTION THIRTY-FOUR OF THIS CHAPTER, AGAINST THE
TAX IMPOSED BY THIS ARTICLE.
  (B) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER  THIS  SUBDIVISION
FOR  ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR THAT YEAR TO LESS
THAN THE AMOUNT PRESCRIBED  IN  PARAGRAPH  (D)  OF  SUBDIVISION  ONE  OF
SECTION TWO HUNDRED TEN OF THIS ARTICLE. HOWEVER, IF THE AMOUNT OF CRED-
IT  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 MAY BE CARRIED OVER TO THE FOLLOWING  YEAR  OR  YEARS  AND  MAY  BE
DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS.
  34.  TEMPORARY  DEFERRAL  REFUNDABLE  PAYOUT  CREDIT. (A) ALLOWANCE OF
CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED
IN SUBDIVISION TWO OF SECTION THIRTY-FOUR OF THIS CHAPTER,  AGAINST  THE
TAX IMPOSED BY THIS ARTICLE.
  (B)  APPLICATION  OF  CREDIT.  IN NO EVENT SHALL THE CREDIT UNDER THIS
SUBDIVISION BE ALLOWED IN AN AMOUNT WHICH WILL REDUCE THE  TAX  TO  LESS
THAN  THE  AMOUNT  PRESCRIBED  IN  PARAGRAPH  (D)  OF SUBDIVISION ONE OF
SECTION TWO HUNDRED TEN OF THIS ARTICLE.  IF,  HOWEVER,  THE  AMOUNT  OF
CREDIT  ALLOWED  UNDER THIS SUBDIVISION 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 REFUNDED IN ACCORD-

S. 6359                            98                            A. 8559

ANCE  WITH  THE  PROVISIONS  OF  SECTION ONE THOUSAND EIGHTY-SIX OF THIS
CHAPTER, PROVIDED HOWEVER, THAT NO INTEREST SHALL BE PAID THEREON.
  35.  ECONOMIC  TRANSFORMATION  AND  FACILITY REDEVELOPMENT PROGRAM TAX
CREDIT. (A) ALLOWANCE OF CREDIT. A TAXPAYER SHALL BE ALLOWED  A  CREDIT,
TO  BE  COMPUTED  AS  PROVIDED  IN  SECTION THIRTY-FIVE OF THIS CHAPTER,
AGAINST THE TAX IMPOSED BY THIS ARTICLE.
  (B) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER  THIS  SUBDIVISION
FOR  ANY  TAXABLE  YEAR MAY NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS
THAN THE AMOUNT PRESCRIBED  IN  PARAGRAPH  (D)  OF  SUBDIVISION  ONE  OF
SECTION TWO HUNDRED TEN OF THIS ARTICLE. HOWEVER, IF THE AMOUNT OF CRED-
IT  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 WILL 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 WILL BE PAID THEREON.
  36.  NEW  YORK  YOUTH  WORKS  TAX CREDIT. (A) A TAXPAYER THAT HAS BEEN
CERTIFIED BY THE COMMISSIONER OF LABOR AS A QUALIFIED EMPLOYER  PURSUANT
TO  SECTION  TWENTY-FIVE-A  OF  THE  LABOR LAW SHALL BE ALLOWED A CREDIT
AGAINST THE TAX IMPOSED BY  THIS  ARTICLE  EQUAL  TO  (I)  FIVE  HUNDRED
DOLLARS  PER  MONTH FOR UP TO SIX MONTHS FOR EACH QUALIFIED EMPLOYEE THE
EMPLOYER EMPLOYS IN A FULL-TIME JOB OR TWO  HUNDRED  FIFTY  DOLLARS  PER
MONTH  FOR  UP  TO  SIX  MONTHS FOR EACH QUALIFIED EMPLOYEE THE EMPLOYER
EMPLOYS IN A PART-TIME JOB OF AT LEAST TWENTY  HOURS  PER  WEEK  OR  TEN
HOURS  PER  WEEK  WHEN THE QUALIFIED EMPLOYEE IS ENROLLED IN HIGH SCHOOL
FULL-TIME, (II) ONE THOUSAND DOLLARS FOR EACH QUALIFIED EMPLOYEE WHO  IS
EMPLOYED FOR AT LEAST AN ADDITIONAL SIX MONTHS BY THE QUALIFIED EMPLOYER
IN  A  FULL-TIME JOB OR FIVE HUNDRED DOLLARS FOR EACH QUALIFIED EMPLOYEE
WHO IS EMPLOYED FOR AT LEAST AN ADDITIONAL SIX MONTHS BY  THE  QUALIFIED
EMPLOYER  IN  A  PART-TIME  JOB OF AT LEAST TWENTY HOURS PER WEEK OR TEN
HOURS PER WEEK WHEN THE QUALIFIED EMPLOYEE IS ENROLLED  IN  HIGH  SCHOOL
FULL-TIME,  AND (III) AN ADDITIONAL ONE THOUSAND DOLLARS FOR EACH QUALI-
FIED EMPLOYEE WHO IS EMPLOYED FOR AT LEAST AN ADDITIONAL YEAR AFTER  THE
FIRST  YEAR  OF THE EMPLOYEE'S EMPLOYMENT BY THE QUALIFIED EMPLOYER IN A
FULL-TIME JOB OR FIVE HUNDRED DOLLARS FOR EACH QUALIFIED EMPLOYEE WHO IS
EMPLOYED FOR AT LEAST AN ADDITIONAL YEAR AFTER THE  FIRST  YEAR  OF  THE
EMPLOYEE'S EMPLOYMENT BY THE QUALIFIED EMPLOYER IN A PART-TIME JOB OF AT
LEAST  TWENTY  HOURS  PER  WEEK OR TEN HOURS PER WEEK WHEN THE QUALIFIED
EMPLOYEE IS ENROLLED IN HIGH SCHOOL  FULL-TIME.  FOR  PURPOSES  OF  THIS
SUBDIVISION,  THE  TERM "QUALIFIED EMPLOYEE" SHALL HAVE THE SAME MEANING
AS SET FORTH IN SUBDIVISION (B) OF SECTION TWENTY-FIVE-A  OF  THE  LABOR
LAW.  THE  PORTION  OF  THE CREDIT DESCRIBED IN SUBPARAGRAPH (I) OF THIS
PARAGRAPH SHALL BE ALLOWED FOR THE TAXABLE YEAR IN WHICH THE  WAGES  ARE
PAID  TO THE QUALIFIED EMPLOYEE, AND THE PORTION OF THE CREDIT DESCRIBED
IN SUBPARAGRAPH (II) OF THIS PARAGRAPH SHALL BE ALLOWED IN  THE  TAXABLE
YEAR IN WHICH THE ADDITIONAL SIX MONTH PERIOD ENDS.
  (B) THE CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR MAY
NOT  REDUCE THE TAX DUE FOR THAT YEAR TO LESS THAN THE AMOUNT PRESCRIBED
IN PARAGRAPH (D) OF SUBDIVISION ONE OF SECTION TWO HUNDRED TEN  OF  THIS
ARTICLE.  HOWEVER, IF THE AMOUNT OF THE CREDIT ALLOWED UNDER THIS SUBDI-
VISION FOR ANY TAXABLE YEAR REDUCES THE TAX TO THAT AMOUNT,  ANY  AMOUNT
OF  CREDIT  NOT  DEDUCTIBLE  IN  THAT TAXABLE YEAR WILL 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, NO INTEREST WILL BE PAID THEREON.

S. 6359                            99                            A. 8559

  (C)  THE  TAXPAYER  MAY  BE  REQUIRED  TO ATTACH TO ITS TAX RETURN ITS
CERTIFICATE OF ELIGIBILITY ISSUED BY THE COMMISSIONER OF LABOR  PURSUANT
TO SECTION TWENTY-FIVE-A OF THE LABOR LAW. IN NO EVENT SHALL THE TAXPAY-
ER  BE  ALLOWED A CREDIT GREATER THAN THE AMOUNT OF THE CREDIT LISTED ON
THE  CERTIFICATE  OF  ELIGIBILITY. NOTWITHSTANDING ANY PROVISION OF THIS
CHAPTER TO THE CONTRARY, THE COMMISSIONER AND THE COMMISSIONER'S  DESIG-
NEES  MAY  RELEASE THE NAMES AND ADDRESSES OF ANY TAXPAYER CLAIMING THIS
CREDIT AND THE AMOUNT OF THE CREDIT EARNED BY THE TAXPAYER.    PROVIDED,
HOWEVER,  IF  A  TAXPAYER CLAIMS THIS CREDIT BECAUSE IT IS A MEMBER OF A
LIMITED LIABILITY COMPANY OR A PARTNER IN A PARTNERSHIP, ONLY THE AMOUNT
OF CREDIT EARNED BY THE ENTITY AND NOT THE AMOUNT OF CREDIT  CLAIMED  BY
THE TAXPAYER MAY BE RELEASED.
  37. EMPIRE STATE JOBS RETENTION PROGRAM CREDIT. (A) ALLOWANCE OF CRED-
IT.   A TAXPAYER WILL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED IN
SECTION THIRTY-SIX OF THIS CHAPTER, AGAINST THE TAXES  IMPOSED  BY  THIS
ARTICLE.
  (B)  APPLICATION  OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION
FOR ANY TAXABLE YEAR WILL NOT REDUCE THE TAX DUE FOR SUCH YEAR  TO  LESS
THAN  THE  AMOUNT  PRESCRIBED  IN  PARAGRAPH  (D)  OF SUBDIVISION ONE OF
SECTION TWO HUNDRED TEN OF THIS ARTICLE. HOWEVER, IF THE AMOUNT OF CRED-
IT 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 WILL 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 WILL BE PAID THEREON.
  38. CREDIT FOR COMPANIES WHO  PROVIDE  TRANSPORTATION  TO  INDIVIDUALS
WITH  DISABILITIES.  (A) ALLOWANCE AND AMOUNT OF CREDIT. A TAXPAYER, WHO
PROVIDES  A  TAXICAB  SERVICE  AS  DEFINED  IN   SECTION   ONE   HUNDRED
FORTY-EIGHT-A  OF  THE  VEHICLE  AND TRAFFIC LAW, OR A LIVERY SERVICE AS
DEFINED IN SECTION ONE HUNDRED TWENTY-ONE-E OF THE VEHICLE  AND  TRAFFIC
LAW,  SHALL  BE  ALLOWED  A  CREDIT,  TO BE COMPUTED AS PROVIDED IN THIS
SUBDIVISION, AGAINST THE TAX IMPOSED BY THIS ARTICLE. THE AMOUNT OF  THE
CREDIT  SHALL BE EQUAL TO THE INCREMENTAL COST ASSOCIATED WITH UPGRADING
A VEHICLE SO THAT IT IS ACCESSIBLE BY INDIVIDUALS WITH  DISABILITIES  AS
DEFINED  IN  PARAGRAPH  (B) OF THIS SUBDIVISION. PROVIDED, HOWEVER, THAT
SUCH CREDIT SHALL NOT EXCEED  TEN  THOUSAND  DOLLARS  PER  VEHICLE.  FOR
PURPOSES  OF  THIS  SUBDIVISION,  PURCHASES  OF  NEW  VEHICLES  THAT ARE
INITIALLY MANUFACTURED TO BE ACCESSIBLE FOR INDIVIDUALS  WITH  DISABILI-
TIES  AND  FOR WHICH THERE IS NO COMPARABLE MAKE AND MODEL THAT DOES NOT
INCLUDE THE EQUIPMENT NECESSARY TO PROVIDE ACCESSIBILITY TO  INDIVIDUALS
WITH DISABILITIES, THE CREDIT SHALL BE TEN THOUSAND DOLLARS PER VEHICLE.
  (B) DEFINITION. THE TERM "ACCESSIBLE BY INDIVIDUALS WITH DISABILITIES"
SHALL,  FOR  THE  PURPOSES  OF THIS SUBDIVISION, REFER TO A VEHICLE THAT
COMPLIES WITH FEDERAL REGULATIONS PROMULGATED PURSUANT TO THE  AMERICANS
WITH  DISABILITIES  ACT  APPLICABLE  TO  VANS  UNDER  TWENTY-TWO FEET IN
LENGTH, BY THE FEDERAL DEPARTMENT OF TRANSPORTATION, IN CODE OF  FEDERAL
REGULATIONS,  TITLE 49, PARTS 37 AND 38, AND BY THE FEDERAL ARCHITECTURE
AND TRANSPORTATION BARRIERS COMPLIANCE BOARD, IN CODE OF  FEDERAL  REGU-
LATIONS, TITLE 36, SECTION 1192.23, AND THE FEDERAL MOTOR VEHICLE SAFETY
STANDARDS, CODE OF FEDERAL REGULATIONS, TITLE 49, PART 57.
  (C)  APPLICATION OF CREDIT. IN NO EVENT SHALL THE CREDIT ALLOWED UNDER
THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCE THE TAX DUE FOR  SUCH  YEAR
TO  LESS  THAN THE AMOUNT PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION ONE
OF SECTION TWO HUNDRED TEN OF THIS ARTICLE. HOWEVER, IF  THE  AMOUNT  OF

S. 6359                            100                           A. 8559

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 CARRIED OVER TO THE FOLLOWING YEAR OR YEARS, AND
MAY BE DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS.
  39.  BEER  PRODUCTION CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT, TO
BE COMPUTED AS PROVIDED IN SECTION THIRTY-SEVEN OF THIS CHAPTER, AGAINST
THE TAX IMPOSED BY THIS ARTICLE. IN NO EVENT SHALL  THE  CREDIT  ALLOWED
UNDER  THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCE THE TAX DUE FOR SUCH
YEAR TO LESS THAN THE AMOUNT PRESCRIBED IN PARAGRAPH (D) OF  SUBDIVISION
ONE  OF  SECTION TWO HUNDRED TEN OF THIS ARTICLE. 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.
  40. MINIMUM WAGE REIMBURSEMENT CREDIT.  (A)  ALLOWANCE  OF  CREDIT.  A
TAXPAYER  SHALL  BE  ALLOWED  A  CREDIT,  TO  BE COMPUTED AS PROVIDED IN
SECTION THIRTY-EIGHT OF THIS CHAPTER, AGAINST THE TAX  IMPOSED  BY  THIS
ARTICLE.
  (B)  APPLICATION  OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION
FOR ANY TAXABLE YEAR MAY NOT REDUCE THE TAX DUE FOR SUCH  YEAR  TO  LESS
THAN  THE  AMOUNT  PRESCRIBED  IN  PARAGRAPH  (D)  OF SUBDIVISION ONE OF
SECTION TWO HUNDRED TEN OF THIS ARTICLE. HOWEVER, IF THE AMOUNT OF CRED-
IT 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 WILL 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 WILL BE PAID THEREON.
  41. THE TAX-FREE NY AREA TAX ELIMINATION CREDIT. A TAXPAYER  SHALL  BE
ALLOWED  A  CREDIT  TO  BE COMPUTED AS PROVIDED IN SECTION FORTY OF THIS
CHAPTER, AGAINST THE TAX IMPOSED BY THIS ARTICLE.  UNLESS  THE  TAXPAYER
HAS  A  TAX-FREE  NY  AREA ALLOCATION FACTOR OF ONE HUNDRED PERCENT, THE
CREDIT ALLOWED UNDER THIS SUBDIVISION FOR ANY  TAXABLE  YEAR  SHALL  NOT
REDUCE  THE  TAX DUE FOR SUCH YEAR TO LESS THAN THE AMOUNT PRESCRIBED IN
PARAGRAPH (D) OF SUBDIVISION ONE OF SECTION  TWO  HUNDRED  TEN  OF  THIS
ARTICLE.  HOWEVER,  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 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.
  42. ALTERNATIVE BASE CREDIT. (A) IF THE TAX IMPOSED ON A  TAXPAYER  BY
SUBDIVISION  ONE  OF  SECTION  TWO  HUNDRED  NINE OF THIS ARTICLE IS THE
AMOUNT PRESCRIBED IN PARAGRAPH (B) OF SUBDIVISION  ONE  OF  SECTION  TWO
HUNDRED  TEN  OF  THIS  ARTICLE,  THE TAXPAYER SHALL BE ALLOWED A CREDIT
AGAINST THE TAX IMPOSED UNDER THIS ARTICLE EQUAL TO THE  AMOUNT  OF  TAX
PAID  TO  ANOTHER STATE COMPUTED ON A TAX BASE IDENTICAL TO THE TAX BASE
PRESCRIBED IN SUCH PARAGRAPH (B). IF THE TAX IMPOSED ON  A  TAXPAYER  BY
SUBDIVISION  ONE  OF  SECTION  TWO  HUNDRED  NINE OF THIS ARTICLE IS THE
AMOUNT PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION  ONE  OF  SECTION  TWO
HUNDRED  TEN  OF  THIS  ARTICLE,  THE TAXPAYER SHALL BE ALLOWED A CREDIT
AGAINST THE TAX IMPOSED UNDER THIS ARTICLE EQUAL TO THE  AMOUNT  OF  TAX

S. 6359                            101                           A. 8559

PAID  TO  ANOTHER STATE COMPUTED ON A TAX BASE IDENTICAL TO THE TAX BASE
PRESCRIBED IN SUCH PARAGRAPH (D).
  (B)  IN  NO  EVENT SHALL THE CREDIT ALLOWED UNDER THIS SUBDIVISION FOR
ANY TAXABLE YEAR REDUCE THE TAX DUE FOR  SUCH  YEAR  TO  LESS  THAN  THE
AMOUNT  PRESCRIBED  IN  PARAGRAPH  (D) OF SUBDIVISION ONE OF SECTION TWO
HUNDRED TEN OF THIS ARTICLE. 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  CARRIED  OVER  TO  THE  FOLLOWING  YEAR  OR YEARS, AND MAY BE
DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS.
  43. REAL PROPERTY TAX CREDIT FOR MANUFACTURERS. (A)  A  QUALIFIED  NEW
YORK  MANUFACTURER,  AS  DEFINED  IN  SUBDIVISION FIFTEEN OF SECTION TWO
HUNDRED EIGHT OF THIS ARTICLE, WILL BE ALLOWED A CREDIT EQUAL TO  TWENTY
PERCENT  OF  THE  REAL  PROPERTY TAX IT PAID DURING THE TAXABLE YEAR FOR
REAL PROPERTY OWNED BY SUCH MANUFACTURER IN NEW YORK WHICH  WAS  PRINCI-
PALLY  USED  DURING THE TAXABLE YEAR FOR MANUFACTURING TO THE EXTENT NOT
DEDUCTED IN DETERMINING   ENTIRE NET INCOME. THIS  CREDIT  WILL  NOT  BE
ALLOWED  IF  THE  REAL PROPERTY TAXES THAT ARE THE BASIS FOR THIS CREDIT
ARE INCLUDED IN THE CALCULATION OF ANOTHER CREDIT CLAIMED BY THE TAXPAY-
ER.
  (B) FOR PURPOSES OF THIS SUBDIVISION, THE TERM REAL PROPERTY TAX MEANS
A CHARGE IMPOSED UPON REAL PROPERTY BY OR ON BEHALF OF A  COUNTY,  CITY,
TOWN,  VILLAGE  OR  SCHOOL  DISTRICT  FOR  MUNICIPAL  OR SCHOOL DISTRICT
PURPOSES, PROVIDED THAT THE CHARGE IS  LEVIED  FOR  THE  GENERAL  PUBLIC
WELFARE  BY  THE  PROPER  TAXING  AUTHORITIES AT A LIKE RATE AGAINST ALL
PROPERTY OVER WHICH SUCH AUTHORITIES  HAVE  JURISDICTION,  AND  PROVIDED
THAT  WHERE TAXES ARE LEVIED PURSUANT TO ARTICLE EIGHTEEN OR NINETEEN OF
THE REAL PROPERTY TAX LAW, THE PROPERTY MUST HAVE BEEN TAXED AT THE RATE
DETERMINED FOR THE CLASS IN WHICH IT IS CONTAINED, AS PROVIDED  BY  SUCH
ARTICLE  EIGHTEEN  OR  NINETEEN,  WHICHEVER IS APPLICABLE. THE TERM REAL
PROPERTY TAX DOES NOT INCLUDE A CHARGE FOR LOCAL BENEFITS, INCLUDING ANY
PORTION OF THAT CHARGE THAT IS PROPERLY ALLOCATED TO THE COSTS ATTRIBUT-
ABLE TO MAINTENANCE OR INTEREST, WHEN (1) THE PROPERTY  SUBJECT  TO  THE
CHARGE  IS LIMITED TO THE PROPERTY THAT BENEFITS FROM THE CHARGE, OR (2)
THE AMOUNT OF THE CHARGE IS DETERMINED BY THE BENEFIT  TO  THE  PROPERTY
ASSESSED,  OR (3) THE IMPROVEMENT FOR WHICH THE CHARGE IS ASSESSED TENDS
TO INCREASE THE PROPERTY VALUE. THE TERM  REAL  PROPERTY  TAX  DOES  NOT
INCLUDE  A  PAYMENT  IN  LIEU  OF  TAXES  MADE BY THE QUALIFIED NEW YORK
MANUFACTURER.
  (C) CREDIT RECAPTURE. WHERE A QUALIFIED NEW YORK  MANUFACTURER'S  REAL
PROPERTY  TAXES  WHICH  WERE  THE  BASIS FOR THE ALLOWANCE OF THE CREDIT
PROVIDED FOR UNDER THIS SUBDIVISION ARE SUBSEQUENTLY REDUCED AS A RESULT
OF A FINAL ORDER IN ANY PROCEEDING UNDER ARTICLE SEVEN OF THE REAL PROP-
ERTY TAX LAW OR OTHER PROVISION OF LAW, THE TAXPAYER SHALL ADD BACK,  IN
THE  TAXABLE YEAR IN WHICH SUCH FINAL ORDER IS ISSUED, THE EXCESS OF (1)
THE AMOUNT OF CREDIT ORIGINALLY ALLOWED FOR A TAXABLE YEAR OVER (2)  THE
AMOUNT  OF CREDIT DETERMINED BASED UPON THE REDUCED 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.
  (D) THE CREDIT ALLOWED UNDER THIS SUBDIVISION  FOR  ANY  TAXABLE  YEAR
SHALL  NOT  REDUCE  THE  TAX  DUE  FOR SUCH YEAR TO LESS THAN THE AMOUNT
PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION ONE OF  SECTION  TWO  HUNDRED
TEN  OF  THIS  CHAPTER.  HOWEVER, ANY AMOUNT OF CREDIT NOT DEDUCTIBLE IN

S. 6359                            102                           A. 8559

SUCH TAXABLE YEAR SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE  CRED-
ITED  OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION ONE THOU-
SAND 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. THE TAX-FREE NY AREA  EXCISE  TAX  ON  TELECOMMUNICATION  SERVICES
CREDIT.  A  TAXPAYER  THAT  IS A BUSINESS OR OWNER OF A BUSINESS THAT IS
LOCATED IN A TAX-FREE NY AREA APPROVED PURSUANT TO ARTICLE TWENTY-ONE OF
THE ECONOMIC DEVELOPMENT LAW SHALL BE ALLOWED  A  CREDIT  EQUAL  TO  THE
EXCISE  TAX ON TELECOMMUNICATION SERVICES IMPOSED BY SECTION ONE HUNDRED
EIGHTY-SIX-E OF THIS CHAPTER AND PASSED THROUGH TO SUCH BUSINESS  DURING
THE  TAXABLE  YEAR TO THE EXTENT NOT OTHERWISE DEDUCTED IN COMPUTING TAX
UNDER THIS ARTICLE. HOWEVER, 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  ONE  THOUSAND
EIGHTY-SIX  OF  THIS  CHAPTER. THIS CREDIT MAY BE CLAIMED ONLY WHERE ANY
TAX IMPOSED BY SUCH SECTION ONE HUNDRED EIGHTY-SIX-E HAS BEEN SEPARATELY
STATED ON A BILL FROM THE PROVIDER  OF  TELECOMMUNICATION  SERVICES  AND
PAID BY SUCH BUSINESS DURING THE TAXABLE YEAR. UNLESS THE TAXPAYER HAS A
TAX-FREE  NY  AREA  ALLOCATION FACTOR OF ONE HUNDRED PERCENT, THE CREDIT
ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE
TAX DUE FOR SUCH YEAR TO LESS THAN THE AMOUNT  PRESCRIBED  IN  PARAGRAPH
(D)  OF  SUBDIVISION  ONE  OF  SECTION  TWO HUNDRED TEN OF THIS CHAPTER.
PROVIDED, HOWEVER, THE PROVISIONS OF SUBSECTION (C) OF SECTION ONE THOU-
SAND EIGHTY-EIGHT OF THIS CHAPTER NOTWITHSTANDING, NO INTEREST SHALL  BE
PAID THEREON.
  45.  ORDER  OF CREDITS. (A) CREDITS ALLOWABLE UNDER THIS ARTICLE WHICH
CANNOT BE CARRIED OVER AND WHICH ARE NOT REFUNDABLE  SHALL  BE  DEDUCTED
FIRST.  THE CREDIT ALLOWABLE UNDER SUBDIVISION SIX OF THIS SECTION SHALL
BE DEDUCTED IMMEDIATELY AFTER THE DEDUCTION  OF  ALL  CREDITS  ALLOWABLE
UNDER  THIS  ARTICLE  WHICH  CANNOT  BE  CARRIED  OVER AND WHICH ARE NOT
REFUNDABLE, WHETHER OR NOT A  PORTION  OF  SUCH  CREDIT  IS  REFUNDABLE.
CREDITS  ALLOWABLE  UNDER  THIS  ARTICLE  WHICH CAN BE CARRIED OVER, AND
CARRYOVERS OF SUCH CREDITS, SHALL BE DEDUCTED NEXT AFTER  THE  DEDUCTION
OF THE CREDIT ALLOWABLE UNDER SUBDIVISION SIX OF THIS SECTION, AND AMONG
SUCH  CREDITS,  THOSE  WHOSE  CARRYOVER  IS OF LIMITED DURATION SHALL BE
DEDUCTED BEFORE THOSE WHOSE CARRYOVER IS OF UNLIMITED DURATION.  CREDITS
ALLOWABLE UNDER THIS ARTICLE WHICH ARE REFUNDABLE (OTHER THAN THE CREDIT
ALLOWABLE UNDER SUBDIVISION SIX OF THIS SECTION) SHALL BE DEDUCTED LAST.
  46.  NOTWITHSTANDING  THE REPEAL OF THE CREDIT PROVISIONS CONTAINED IN
SECTION TWO HUNDRED TEN OF  THIS  ARTICLE  AND  THE  ENACTMENT  OF  THIS
SECTION BY A CHAPTER OF THE LAWS OF TWO THOUSAND FOURTEEN:
  (A) A TAXPAYER SHALL BE ALLOWED TO UTILIZE ANY CARRYFORWARD AMOUNTS OF
CREDITS  TO WHICH THE TAXPAYER WAS ENTITLED AS OF THE CLOSE OF THE TAXA-
BLE YEAR BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND FOURTEEN  AND
BEFORE  JANUARY FIRST, TWO THOUSAND FIFTEEN, OTHER THAN THE CARRYFORWARD
AMOUNT OF THE MINIMUM TAX CREDIT PROVIDED UNDER SUBDIVISION THIRTEEN  OF
SECTION  TWO  HUNDRED TEN, AS THAT SUBDIVISION WAS IN EFFECT ON DECEMBER
THIRTY-FIRST, TWO THOUSAND FOURTEEN.
  (B) A TAXPAYER SHALL BE REQUIRED IN A TAXABLE  YEAR  BEGINNING  ON  OR
AFTER JANUARY FIRST, TWO THOUSAND FIFTEEN, TO RECAPTURE ALL OR A PORTION
OF  A CREDIT ALLOWED UNDER A CREDIT PROVISION IN SECTION TWO HUNDRED TEN
FOR A TAXABLE YEAR  BEGINNING  PRIOR  TO  JANUARY  FIRST,  TWO  THOUSAND
FIFTEEN  IF  RECAPTURE  WOULD  HAVE  BEEN  REQUIRED  UNDER  SUCH  CREDIT
PROVISION.

S. 6359                            103                           A. 8559

  47. IN ANY TAXABLE YEAR, A TAXPAYER MUST FIRST CLAIM ANY OF THE  CRED-
ITS  SPECIFIED  IN  THIS SECTION ON ITS ORIGINALLY FILED REPORT FOR SUCH
TAXABLE YEAR. A TAXPAYER SHALL NOT FIRST CLAIM A CREDIT  ON  AN  AMENDED
REPORT.
  S  18. The tax law is amended by adding a new section 210-C to read as
follows:
  S 210-C. COMBINED REPORTS. 1. TAX. THE TAX ON A COMBINED REPORT  SHALL
BE  THE HIGHEST OF THE PRODUCTS OF (I) THE COMBINED BUSINESS INCOME BASE
MULTIPLIED BY THE TAX RATE SPECIFIED IN PARAGRAPH (A) OF SUBDIVISION ONE
OF SECTION TWO HUNDRED TEN OF THIS ARTICLE; (II)  THE  COMBINED  CAPITAL
BASE  MULTIPLIED  BY THE TAX RATE SPECIFIED IN PARAGRAPH (B) OF SUBDIVI-
SION ONE OF SECTION TWO HUNDRED TEN OF THIS ARTICLE, BUT  NOT  EXCEEDING
THE  LIMITATION  PROVIDED  FOR IN THAT PARAGRAPH (B); OR (III) THE FIXED
DOLLAR MINIMUM THAT IS ATTRIBUTABLE  TO  THE  DESIGNATED  AGENT  OF  THE
COMBINED  GROUP. IN ADDITION, THE TAX ON A COMBINED REPORT SHALL INCLUDE
THE FIXED DOLLAR MINIMUM TAX SPECIFIED IN PARAGRAPH (D)  OF  SUBDIVISION
ONE  OF  SECTION  TWO HUNDRED TEN OF THIS ARTICLE FOR EACH MEMBER OF THE
COMBINED GROUP, OTHER THAN THE DESIGNATED AGENT, THAT IS A TAXPAYER.
  (B) THE COMBINED BUSINESS INCOME BASE IS THE AMOUNT  OF  THE  COMBINED
BUSINESS  INCOME OF THE COMBINED GROUP THAT IS APPORTIONED TO THE STATE,
REDUCED BY ANY NET OPERATING LOSS DEDUCTION FOR THE COMBINED GROUP.  THE
COMBINED CAPITAL BASE IS THE AMOUNT  OF  THE  COMBINED  CAPITAL  OF  THE
COMBINED GROUP THAT IS APPORTIONED TO THE STATE.
  2.  COMBINED REPORTS REQUIRED. (A) EXCEPT AS PROVIDED IN PARAGRAPH (C)
OF THIS SUBDIVISION, ANY TAXPAYER (I)  WHICH  OWNS  OR  CONTROLS  EITHER
DIRECTLY  OR  INDIRECTLY MORE THAN FIFTY PERCENT OF THE CAPITAL STOCK OF
ONE OR MORE OTHER CORPORATIONS, OR (II) MORE THAN FIFTY PERCENT  OF  THE
CAPITAL  STOCK  OF WHICH IS OWNED OR CONTROLLED EITHER DIRECTLY OR INDI-
RECTLY BY ONE OR MORE OTHER  CORPORATIONS,  OR  (III)  MORE  THAN  FIFTY
PERCENT  OF  THE  CAPITAL STOCK OF WHICH AND THE CAPITAL STOCK OF ONE OR
MORE OTHER CORPORATIONS, IS OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY,
BY THE SAME INTERESTS, AND (IV) THAT IS ENGAGED IN  A  UNITARY  BUSINESS
WITH  THOSE  CORPORATIONS, SHALL MAKE A COMBINED REPORT WITH THOSE OTHER
CORPORATIONS.
  (B) A CORPORATION REQUIRED TO MAKE A COMBINED REPORT WITHIN THE  MEAN-
ING  OF THIS SECTION SHALL ALSO INCLUDE (I) A CAPTIVE REIT AND A CAPTIVE
RIC IF THE CAPTIVE REIT OR CAPTIVE RIC IS NOT REQUIRED TO BE INCLUDED IN
A COMBINED REPORT UNDER ARTICLE THIRTY-THREE OF  THIS  CHAPTER;  (II)  A
COMBINABLE  CAPTIVE  INSURANCE  COMPANY;  AND (III) AN ALIEN CORPORATION
THAT SATISFIES THE CONDITIONS IN PARAGRAPH (A) OF  THIS  SUBDIVISION  IF
(I)  UNDER  ANY PROVISION OF THE INTERNAL REVENUE CODE, THAT CORPORATION
IS TREATED AS A "DOMESTIC CORPORATION" AS DEFINED IN SECTION SEVEN THOU-
SAND SEVEN HUNDRED ONE OF THE INTERNAL REVENUE  CODE,  OR  (II)  IT  HAS
EFFECTIVELY  CONNECTED  INCOME  FOR  THE TAXABLE YEAR PURSUANT TO CLAUSE
(IV) OF THE OPENING PARAGRAPH OF SUBDIVISION NINE OF SECTION TWO HUNDRED
EIGHT OF THIS ARTICLE.
  (C) A CORPORATION REQUIRED OR PERMITTED  TO  MAKE  A  COMBINED  REPORT
UNDER  THIS  SECTION  DOES NOT INCLUDE (I) A CORPORATION THAT IS TAXABLE
UNDER ARTICLE NINE OR THIRTY-THREE OF THIS CHAPTER; (II) A REIT THAT  IS
NOT  A  CAPTIVE  REIT,  AND A RIC THAT IS NOT A CAPTIVE RIC; (III) A NEW
YORK S CORPORATION; (IV) A CORPORATION THAT IS SUBJECT TO TAX UNDER THIS
ARTICLE SOLELY AS A RESULT OF ITS OWNERSHIP OF A LIMITED PARTNER  INTER-
EST  IN A LIMITED PARTNERSHIP THAT IS DOING BUSINESS, EMPLOYING CAPITAL,
OWNING OR LEASING PROPERTY, MAINTAINING AN  OFFICE  IN  THIS  STATE,  OR
DERIVING  RECEIPTS FROM ACTIVITY IN THIS STATE, PROVIDED THAT THE CORPO-
RATION IS NOT OTHERWISE REQUIRED TO FILE A COMBINED REPORT  PURSUANT  TO

S. 6359                            104                           A. 8559

THIS  SECTION;  OR  (V)  AN  ALIEN  CORPORATION  THAT HAS NO EFFECTIVELY
CONNECTED INCOME FOR THE TAXABLE YEAR PURSUANT TO  CLAUSE  (IV)  OF  THE
OPENING  PARAGRAPH  OF  SUBDIVISION NINE OF SECTION TWO HUNDRED EIGHT OF
THIS ARTICLE.
  (D)  A  COMBINED  REPORT SHALL BE FILED BY THE DESIGNATED AGENT OF THE
COMBINED GROUP AS DETERMINED UNDER SUBDIVISION SEVEN OF THIS SECTION.
  3. COMMONLY OWNED GROUP ELECTION. (A) SUBJECT  TO  THE  PROVISIONS  OF
PARAGRAPH  (C)  OF SUBDIVISION TWO OF THIS SECTION, A TAXPAYER MAY ELECT
TO TREAT AS ITS COMBINED GROUP ALL CORPORATIONS THAT MEET THE  OWNERSHIP
REQUIREMENTS  DESCRIBED  IN  PARAGRAPH  (A)  OF  SUBDIVISION TWO OF THIS
SECTION (SUCH CORPORATIONS COLLECTIVELY REFERRED TO IN THIS  SUBDIVISION
AS  THE  "COMMONLY OWNED GROUP"). IF THAT ELECTION IS MADE, THE COMMONLY
OWNED GROUP SHALL CALCULATE THE COMBINED BUSINESS INCOME, COMBINED CAPI-
TAL, AND FIXED DOLLAR MINIMUM BASES OF  ALL  MEMBERS  OF  THE  GROUP  IN
ACCORDANCE  WITH PARAGRAPH FOUR OF THIS SUBDIVISION, WHETHER OR NOT THAT
BUSINESS INCOME OR BUSINESS CAPITAL IS FROM A SINGLE UNITARY BUSINESS.
  (B) THE ELECTION UNDER THIS SUBDIVISION SHALL BE MADE ON AN  ORIGINAL,
TIMELY  FILED  RETURN  OF THE COMBINED GROUP. ANY CORPORATION ENTERING A
COMMONLY OWNED GROUP  SUBSEQUENT  TO  THE  YEAR  OF  ELECTION  SHALL  BE
INCLUDED  IN  THE  COMBINED  GROUP  AND IS CONSIDERED TO HAVE WAIVED ANY
OBJECTION TO ITS INCLUSION IN THE COMBINED GROUP.
  (C) THE ELECTION SHALL BE IRREVOCABLE, AND BINDING FOR AND  APPLICABLE
TO  THE  TAXABLE  YEAR FOR WHICH IT IS MADE AND FOR THE NEXT SIX TAXABLE
YEARS. THE ELECTION WILL AUTOMATICALLY  BE  RENEWED  FOR  ANOTHER  SEVEN
TAXABLE YEARS AFTER IT HAS BEEN IN EFFECT FOR SEVEN TAXABLE YEARS UNLESS
IT  IS  AFFIRMATIVELY  REVOKED.  THE  REVOCATION  SHALL  BE  MADE  ON AN
ORIGINAL, TIMELY FILED RETURN FOR  THE  FIRST  TAXABLE  YEAR  AFTER  THE
COMPLETION  OF  A  SEVEN  YEAR  PERIOD  FOR WHICH AN ELECTION UNDER THIS
SUBDIVISION WAS IN PLACE. IN THE CASE OF A REVOCATION,  A  NEW  ELECTION
UNDER  THIS SUBDIVISION SHALL NOT BE PERMITTED IN ANY OF THE IMMEDIATELY
FOLLOWING THREE TAXABLE YEARS. IN DETERMINING THE SEVEN AND  THREE  YEAR
PERIODS  DESCRIBED  IN  THIS PARAGRAPH, SHORT TAXABLE YEARS SHALL NOT BE
CONSIDERED OR COUNTED.
  4. COMPUTATION OF TAX BASES ON A COMBINED REPORT. (A) IN COMPUTING THE
TAX BASES FOR A COMBINED REPORT, THE COMBINED GROUP SHALL  GENERALLY  BE
TREATED  AS  A  SINGLE  CORPORATION,  EXCEPT  AS OTHERWISE PROVIDED, AND
SUBJECT TO ANY REGULATIONS OR GUIDANCE ISSUED BY THE COMMISSIONER OR THE
DEPARTMENT.
  (B)(I) IN COMPUTING COMBINED BUSINESS INCOME, ALL INTERCORPORATE DIVI-
DENDS SHALL BE ELIMINATED, AND  ALL  OTHER  INTERCORPORATE  TRANSACTIONS
SHALL BE DEFERRED IN A MANNER SIMILAR TO THE RULES RELATING TO INTERCOM-
PANY  TRANSACTIONS  UNDER  SECTION  FIFTEEN  HUNDRED TWO OF THE INTERNAL
REVENUE CODE.
  (II) IN COMPUTING COMBINED CAPITAL, ALL INTERCORPORATE  STOCKHOLDINGS,
INTERCORPORATE  BILLS,  INTERCORPORATE  NOTES  RECEIVABLE  AND  PAYABLE,
INTERCORPORATE ACCOUNTS RECEIVABLE AND PAYABLE, AND OTHER INTERCORPORATE
INDEBTEDNESS, SHALL BE ELIMINATED.
  (C) QUALIFICATION FOR  CREDITS,  INCLUDING  ANY  LIMITATIONS  THEREON,
SHALL  BE  DETERMINED SEPARATELY FOR EACH OF THE MEMBERS OF THE COMBINED
GROUP, AND SHALL NOT BE DETERMINED ON A COMBINED GROUP BASIS, EXCEPT  AS
OTHERWISE  PROVIDED.  HOWEVER,  THE CREDITS SHALL BE APPLIED AGAINST THE
COMBINED TAX OF THE GROUP.
  (D)(I) A NET OPERATING LOSS DEDUCTION  IS  ALLOWED  IN  COMPUTING  THE
COMBINED  BUSINESS INCOME BASE. SUCH DEDUCTION MAY REDUCE THE TAX ON THE
COMBINED BUSINESS INCOME BASE TO THE HIGHER OF THE TAX ON  THE  COMBINED
CAPITAL  BASE OR THE FIXED DOLLAR MINIMUM. A COMBINED NET OPERATING LOSS

S. 6359                            105                           A. 8559

DEDUCTION IS EQUAL TO THE AMOUNT OF COMBINED NET OPERATING LOSS OR LOSS-
ES FROM ONE OR MORE TAXABLE YEARS THAT ARE CARRIED FORWARD TO A  PARTIC-
ULAR INCOME YEAR. A COMBINED NET OPERATING LOSS IS THE COMBINED BUSINESS
LOSS  INCURRED  IN  A PARTICULAR TAXABLE YEAR MULTIPLIED BY THE COMBINED
APPORTIONMENT FRACTION FOR THAT YEAR DETERMINED AS PROVIDED IN  SUBDIVI-
SION FIVE OF THIS SECTION.
  (II)  THE COMBINED NET OPERATING LOSS DEDUCTION AND COMBINED NET OPER-
ATING LOSS ARE ALSO SUBJECT TO THE PROVISIONS CONTAINED IN  CLAUSES  ONE
THROUGH  SIX  OF SUBPARAGRAPH (VIII) OF PARAGRAPH (A) OF SUBDIVISION ONE
OF SECTION TWO HUNDRED TEN OF THIS ARTICLE.
  (III) IN THE CASE OF A  CORPORATION  THAT  FILES  A  COMBINED  REPORT,
EITHER  IN THE YEAR THE NET OPERATING LOSS IS INCURRED OR IN THE YEAR IN
WHICH A DEDUCTION IS CLAIMED ON ACCOUNT OF THE LOSS,  THE  COMBINED  NET
OPERATING  LOSS  DEDUCTION  IS  DETERMINED AS IF THE COMBINED GROUP IS A
SINGLE CORPORATION AND IS SUBJECT TO THE  SAME  LIMITATIONS  THAT  WOULD
APPLY  FOR  FEDERAL  INCOME TAX PURPOSES UNDER THE INTERNAL REVENUE CODE
AND THE CODE OF FEDERAL REGULATIONS AS IF SUCH CORPORATION HAD FILED FOR
SUCH TAXABLE YEAR A CONSOLIDATED FEDERAL INCOME TAX RETURN WITH THE SAME
CORPORATIONS INCLUDED IN THE COMBINED REPORT. IF A CORPORATION  FILES  A
COMBINED  REPORT,  REGARDLESS  OF  WHETHER IT FILED A SEPARATE RETURN OR
CONSOLIDATED RETURN FOR FEDERAL INCOME TAX PURPOSES, THE  NET  OPERATING
LOSS  AND  NET  OPERATING  LOSS DEDUCTION FOR THE COMBINED GROUP MUST BE
COMPUTED AS IF THE CORPORATION HAD FILED A CONSOLIDATED RETURN  FOR  THE
SAME CORPORATIONS FOR FEDERAL INCOME TAX PURPOSES.
  (IV) IN GENERAL, ANY NET OPERATING LOSS CARRYOVER FROM A YEAR IN WHICH
A COMBINED REPORT WAS FILED SHALL BE BASED ON THE COMBINED NET OPERATING
LOSS OF THE GROUP OF CORPORATIONS FILING SUCH REPORT. THE PORTION OF THE
COMBINED LOSS ATTRIBUTABLE TO ANY MEMBER OF THE GROUP THAT FILES A SEPA-
RATE  REPORT FOR A SUCCEEDING TAXABLE YEAR WILL BE AN AMOUNT BEARING THE
SAME RELATION TO THE COMBINED LOSS AS THE NET  OPERATING  LOSS  OF  SUCH
CORPORATION  BEARS TO THE TOTAL NET OPERATING LOSS OF ALL MEMBERS OF THE
GROUP HAVING SUCH LOSSES TO THE EXTENT THAT THEY ARE TAKEN INTO  ACCOUNT
IN COMPUTING THE COMBINED NET OPERATING LOSS.
  (E)  ANY  ELECTION  MADE PURSUANT TO PARAGRAPH (B) OF SUBDIVISION SIX,
AND PARAGRAPHS (B) AND (C) OF SUBDIVISION SIX-A OF SECTION  TWO  HUNDRED
EIGHT OF THIS ARTICLE SHALL APPLY TO ALL MEMBERS OF THE COMBINED GROUP.
  (F)(I)  IN  THE  CASE  OF A CAPTIVE REIT OR CAPTIVE RIC REQUIRED UNDER
THIS SECTION TO BE INCLUDED IN A  COMBINED  REPORT,  ENTIRE  NET  INCOME
SHALL  BE  COMPUTED AS REQUIRED UNDER SUBDIVISION FIVE (IN THE CASE OF A
CAPTIVE REIT) OR SUBDIVISION SEVEN (IN THE CASE OF  A  CAPTIVE  RIC)  OF
SECTION  TWO  HUNDRED NINE OF THIS ARTICLE. HOWEVER, THE DEDUCTION UNDER
THE INTERNAL REVENUE CODE FOR DIVIDENDS PAID  BY  THE  CAPTIVE  REIT  OR
CAPTIVE  RIC  TO  ANY  MEMBER  OF THE AFFILIATED GROUP THAT INCLUDES THE
CORPORATION THAT DIRECTLY OR INDIRECTLY OWNS OVER FIFTY PERCENT  OF  THE
VOTING  STOCK  OF  THE CAPTIVE REIT OR CAPTIVE RIC SHALL NOT BE ALLOWED.
FOR PURPOSES OF THIS SUBPARAGRAPH, THE  TERM  "AFFILIATED  GROUP"  MEANS
"AFFILIATED  GROUP"  AS  DEFINED  IN SECTION FIFTEEN HUNDRED FOUR OF THE
INTERNAL REVENUE CODE, BUT WITHOUT REGARD TO THE EXCEPTIONS PROVIDED FOR
IN SUBSECTION (B) OF THAT SECTION.
  (II) IN THE CASE OF A COMBINABLE CAPTIVE  INSURANCE  COMPANY  REQUIRED
UNDER  THIS  SECTION  TO  BE  INCLUDED  IN A COMBINED REPORT, ENTIRE NET
INCOME SHALL BE COMPUTED AS REQUIRED BY SUBDIVISION NINE OF SECTION  TWO
HUNDRED EIGHT OF THIS ARTICLE.
  5.  APPORTIONMENT  ON A COMBINED REPORT. (A) IN DETERMINING THE APPOR-
TIONMENT FACTOR FOR A COMBINED REPORT, THE  RECEIPTS,  NET  INCOME,  NET
GAINS  AND  OTHER ITEMS OF ALL MEMBERS OF THE COMBINED GROUP, WHETHER OR

S. 6359                            106                           A. 8559

NOT THEY ARE A  TAXPAYER,  ARE  INCLUDED  AND  INTERCORPORATE  RECEIPTS,
INCOME  AND  GAINS  ARE  ELIMINATED. RECEIPTS, NET INCOME, NET GAINS AND
OTHER ITEMS ARE SOURCED AS PROVIDED IN SECTION TWO HUNDRED TEN-A OF THIS
ARTICLE.
  (B)  AN  ELECTION  MADE  TO APPORTION INCOME AND GAINS FROM QUALIFYING
FINANCIAL INSTRUMENTS PURSUANT TO SUBPARAGRAPH ONE OF PARAGRAPH  (A)  OF
SUBDIVISION  FIVE  OF  SECTION  TWO  HUNDRED TEN-A OF THIS ARTICLE SHALL
APPLY TO ALL MEMBERS OF THE COMBINED GROUP.
  6. LIABILITY OF COMBINED GROUP MEMBERS. EVERY MEMBER OF  THE  COMBINED
GROUP  THAT  IS  SUBJECT  TO TAX UNDER THIS ARTICLE SHALL BE JOINTLY AND
SEVERALLY LIABLE FOR THE TAX DUE PURSUANT TO A COMBINED REPORT.
  7. DESIGNATED AGENT. EACH COMBINED GROUP  SHALL  HAVE  ONE  DESIGNATED
AGENT,  WHICH  SHALL  BE  A TAXPAYER. THE DESIGNATED AGENT IS THE PARENT
CORPORATION OF THE COMBINED GROUP. IF THERE IS  NO  SUCH  PARENT  CORPO-
RATION, OR THE PARENT CORPORATION IS NOT A TAXPAYER, THEN ANOTHER MEMBER
OF  THE COMBINED GROUP THAT IS A TAXPAYER MAY BE APPOINTED AS THE DESIG-
NATED AGENT. ONLY THE DESIGNATED AGENT MAY ACT ON BEHALF OF THE  MEMBERS
OF THE COMBINED GROUP FOR MATTERS RELATING TO THE COMBINED REPORT.
  S  19.  Subdivisions  2-a,  3,  4 and 5 of section 211 of the tax law,
subdivision 2-a as added and subdivision 5 as amended by chapter 817  of
the laws of 1987, subdivision 3 as amended by chapter 770 of the laws of
1992,  subdivision 4 as amended by section 2 of part T of chapter 407 of
the laws of 1999, the opening  paragraph  and  the  second  undesignated
paragraph  of  paragraph  (a)  of subdivision 4 as amended by section 1,
subparagraph 4 of paragraph (a) of subdivision 4 as amended  by  section
2,  and  subparagraph  5 of paragraph (a) of subdivision 4 as amended by
section 3 of part J of chapter 60 of the laws of 2007, subparagraph 6 of
paragraph (a) of subdivision 4 as added by section  3  of  part  FF1  of
chapter  57  of  the  laws  of  2008, subparagraph 7 of paragraph (a) of
subdivision 4 as added by section 2 and subparagraph 1 of paragraph  (b)
of subdivision 4 as amended by section 3 of part E1 of chapter 57 of the
laws of 2009, are amended to read as follows:
  2-a.  The  [tax commission] COMMISSIONER may prescribe regulations and
instructions requiring returns of information to be made  and  filed  in
conjunction  with  the reports required to be filed pursuant to [section
two hundred eleven] THIS ARTICLE, relating to payments  made  to  share-
holders  owning,  directly  or indirectly, individually or in the aggre-
gate, more than fifty percent of the issued capital stock of the taxpay-
er, where such payments are treated  as  payments  of  interest  in  the
computation of entire net income [or minimum taxable income] reported on
such reports.
  3.  If  the  amount  of taxable income [or alternative minimum taxable
income] for any year of any taxpayer (including any taxpayer  which  has
elected  to  be  taxed under subchapter s of chapter one of the internal
revenue code), as returned to the United States treasury  department  is
changed  or  corrected  by the commissioner of internal revenue or other
officer of the United States or other competent authority,  or  where  a
renegotiation  of  a  contract  or  subcontract  with  the United States
results in a change in taxable income [or  alternative  minimum  taxable
income],  such  taxpayer  shall report such changed or corrected taxable
income [or alternative minimum taxable income], or the results  of  such
renegotiation,  within  ninety  days (or one hundred twenty days, in the
case of a taxpayer making a combined report under this article for  such
year)  after  the  final  determination  of such change or correction or
renegotiation, or as required by the commissioner, and shall concede the
accuracy of such determination or state wherein  it  is  erroneous.  The

S. 6359                            107                           A. 8559

allowance of a tentative carryback adjustment based upon a net operating
loss  carryback or net capital loss carryback pursuant to section sixty-
four hundred eleven of the internal revenue code, as amended,  shall  be
treated  as  a final determination for purposes of this subdivision. Any
taxpayer filing an amended return with such department shall  also  file
within ninety days (OR ONE HUNDRED TWENTY DAYS, IN THE CASE OF A TAXPAY-
ER MAKING A COMBINED REPORT UNDER THIS ARTICLE FOR SUCH YEAR) thereafter
an amended report with the commissioner.
  4.  [(a)  Combined  reports permitted or required. Any taxpayer, which
owns or controls either directly or  indirectly  substantially  all  the
capital  stock  of  one or more other corporations, or substantially all
the capital stock of which is owned or  controlled  either  directly  or
indirectly  by  one or more other corporations or by interests which own
or control either directly or indirectly substantially all  the  capital
stock  of  one  or  more other corporations, (hereinafter referred to in
this paragraph as "related corporations"), shall make a combined  report
covering  any  related corporations if there are substantial intercorpo-
rate transactions among the  related  corporations,  regardless  of  the
transfer price for such intercorporate transactions. It is not necessary
that  there  be  substantial intercorporate transactions between any one
corporation and every other related corporation. It is necessary, howev-
er, that there be substantial intercorporate  transactions  between  the
taxpayer  and  a  related  corporation  or collectively, a group of such
related corporations. The report shall set forth such information as the
commissioner may require, subject to the provisions of subparagraphs one
through five of this paragraph.
  In determining whether there  are  substantial  intercorporate  trans-
actions, the commissioner shall consider and evaluate all activities and
transactions  of  the  taxpayer and its related corporations. Activities
and transactions that will be considered include, but  are  not  limited
to:  (i)  manufacturing,  acquiring  goods  or  property,  or performing
services, for related corporations; (ii)  selling  goods  acquired  from
related  corporations;  (iii)  financing  sales of related corporations;
(iv) performing related customer services using  common  facilities  and
employees for related corporations; (v) incurring expenses that benefit,
directly  or  indirectly,  one  or  more  related corporations, and (vi)
transferring assets,  including  such  assets  as  accounts  receivable,
patents or trademarks from one or more related corporations.
  (1)  Any  corporation  which owns or controls either directly or indi-
rectly substantially all the capital stock of a DISC not exempt from tax
under paragraph (i) of subdivision nine of section two hundred eight  of
this  article  shall be allowed, at the election of such corporation, to
make a report on a combined basis covering such DISC, but the failure of
such corporation to make such election shall not  prohibit  the  commis-
sioner  from  requiring  a combined report covering such corporation and
such DISC.
  (2)(i) No taxpayer may be permitted to make a  report  on  a  combined
basis  covering  any  such other corporations where such taxpayer or any
such other corporation  allocates  in  accordance  with  clause  (A)  of
subparagraph  seven of paragraph (a) of subdivision three of section two
hundred ten of this article (relating to aviation corporations) and such
taxpayer or any such other corporation does not so allocate, unless such
taxpayer or such other corporation is a qualified air freight  forwarder
with  respect  to such other corporation or such taxpayer, respectively,
and all taxpayers included on such combined report elect, by filing such

S. 6359                            108                           A. 8559

combined report,  to  have  such  qualified  air  freight  forwarder  so
included.
  (ii)  A  corporation is a qualified air freight forwarder with respect
to another corporation:
  (A) if it owns or controls either directly or indirectly  all  of  the
capital  stock of such other corporation, or if all of its capital stock
is owned or controlled either  directly  or  indirectly  by  such  other
corporation,  or  if  all  of  the capital stock of both corporations is
owned or controlled either directly or indirectly by the same interests,
  (B) if it is principally  engaged  in  the  business  of  air  freight
forwarding, and
  (C)  if  its air freight forwarding business is carried on principally
with the airline or airlines operated by such other corporation.
  (3) No taxpayer may be permitted to make a report on a combined  basis
covering  any  such  other  corporations where such taxpayer or any such
other corporation allocates in accordance  with  subparagraph  eight  of
paragraph  (a)  of  subdivision three of section two hundred ten of this
article (relating  to  railroad  and  trucking  corporations)  and  such
taxpayer or any such other corporation does not so allocate.
  (4)  Except  as  provided  in the first undesignated paragraph of this
paragraph, no combined report covering any corporation shall be required
unless the commissioner  deems  such  a  report  necessary,  because  of
inter-company transactions or some agreement, understanding, arrangement
or transaction referred to in subdivision five of this section, in order
properly to reflect the tax liability under this article.
  (5) A corporation organized under the laws of a country other than the
United  States  shall not be required or permitted to make a report on a
combined basis.
  (6) (i) For purposes of this subparagraph, the term "closest  control-
ling stockholder" means the corporation that indirectly owns or controls
over fifty percent of the voting stock of a captive REIT or captive RIC,
is subject to tax under this article, article thirty-two or thirty-three
of  this  chapter  or  otherwise  required  to be included in a combined
return or report under this article, article thirty-two or  thirty-three
of  this  chapter,  and  is the fewest tiers of corporations away in the
ownership structure from the captive REIT or captive RIC.   The  commis-
sioner  is  authorized  to prescribe by regulation or published guidance
the criteria for determining the closest controlling stockholder.
  (ii) A captive REIT or a captive RIC must be included  in  a  combined
report  with  the  corporation that directly owns or controls over fifty
percent of the voting stock of the captive REIT or captive RIC  if  that
corporation  is  subject to tax or required to be included in a combined
report under this article.
  (iii) If over fifty percent of the voting stock of a captive  REIT  or
captive RIC is not directly owned or controlled by a corporation that is
subject  to  tax  or  required to be included in a combined report under
this article, then the captive REIT or captive RIC must be included in a
combined return or report with  the  corporation  that  is  the  closest
controlling stockholder of the captive REIT or captive RIC. If the clos-
est  controlling  stockholder  of  the  captive  REIT  or captive RIC is
subject to tax or otherwise required to be included in a combined report
under this article, then  the  captive  REIT  or  captive  RIC  must  be
included in a combined report under this article.
  (iv)  If  the  corporation  that  directly owns or controls the voting
stock of the captive REIT or captive RIC is  described  in  subparagraph
two,  three  or five of this paragraph as a corporation not permitted to

S. 6359                            109                           A. 8559

make a combined report, then the provisions  in  clause  (iii)  of  this
subparagraph  must  be  applied  to  determine  the corporation in whose
combined return or report the captive REIT  or  captive  RIC  should  be
included.  If,  under clause (iii) of this subparagraph, the corporation
that is the closest controlling  stockholder  of  the  captive  REIT  or
captive  RIC  is  described  in  subparagraph two, three or five of this
paragraph as a corporation not permitted to make a combined return, then
that corporation is deemed to not be in the ownership structure  of  the
captive  REIT  or  captive  RIC, and the closest controlling stockholder
will be determined without regard to that corporation.
  (v) If a captive REIT owns the stock of a  qualified  REIT  subsidiary
(as  defined in paragraph two of subsection (i) of section eight hundred
fifty-six of the internal revenue code), then the qualified REIT subsid-
iary must be included in a combined report with the captive REIT.
  (vi) If a captive REIT or a captive RIC is required under this subpar-
agraph to be included in a combined report with another corporation, and
that other corporation is also required to be  included  in  a  combined
report with another related corporation or corporations under this para-
graph, then the captive REIT or the captive RIC must be included in that
combined report with those corporations.
  (vii)  If  a  captive  REIT  or  a  captive  RIC is not required to be
included in a combined report with another corporation under clause (ii)
or (iii) of this  subparagraph,  or  in  a  combined  return  under  the
provisions of either subparagraph (v) of paragraph two of subsection (f)
of  section  fourteen hundred sixty-two or paragraph four of subdivision
(f) of section fifteen hundred fifteen of this chapter, then the captive
REIT or captive RIC is subject to the opening provisions of  this  para-
graph  and  the  provisions  of subparagraph four of this paragraph. The
captive REIT or captive RIC must be included in a combined report  under
this  article  with another corporation if either the substantial inter-
corporate transactions requirement in the  opening  provisions  of  this
paragraph or the inter-company transactions or agreement, understanding,
arrangement  or  transaction  requirement  of  subparagraph four of this
paragraph is satisfied and more than fifty percent of the  voting  stock
of  the  captive  REIT  or  the captive RIC and substantially all of the
capital stock of  that  other  corporation  are  owned  and  controlled,
directly or indirectly, by the same corporation.
  (7)  (i) For purposes of this subparagraph, the term "closest control-
ling stockholder" means the corporation that indirectly owns or controls
over fifty percent of the voting stock  of  an  overcapitalized  captive
insurance company; is subject to tax under this article or article thir-
ty-two  of  this  chapter,  or is otherwise required to be included in a
combined return or report under this article or  article  thirty-two  of
this chapter; and is the fewest tiers of corporations away in the owner-
ship  structure from the overcapitalized captive insurance company.  The
commissioner is authorized to prescribe by regulation or published guid-
ance the criteria for determining the closest controlling stockholder.
  (ii) An overcapitalized captive insurance company must be included  in
a  combined  report  with the corporation that directly owns or controls
over fifty percent of the voting stock of  the  overcapitalized  captive
insurance  company  if that corporation is subject to tax or required to
be included in a combined report under this article.
  (iii) If over fifty percent of the voting stock of an  overcapitalized
captive  insurance  company  is  not  directly  owned or controlled by a
corporation that is subject to tax or  required  to  be  included  in  a
combined  report  under  this  article, then the overcapitalized captive

S. 6359                            110                           A. 8559

insurance company must be included in a combined return or  report  with
the corporation that is the closest controlling stockholder of the over-
capitalized captive insurance company. If the closest controlling stock-
holder  of  the  overcapitalized captive insurance company is subject to
tax or otherwise required to be included in a combined report under this
article, then the overcapitalized  captive  insurance  company  must  be
included in a combined report under this article.
  (iv)  If  the  corporation  that  directly owns or controls the voting
stock of the overcapitalized captive insurance company is  described  in
subparagraph  two, three, or five of this paragraph as a corporation not
permitted to make a combined report, then the provisions in clause (iii)
of this subparagraph must be applied to  determine  the  corporation  in
whose  combined  return  or report the overcapitalized captive insurance
company should be included. If, under clause (iii) of this subparagraph,
the corporation that is the closest controlling stockholder of the over-
capitalized captive insurance company is described in subparagraph  two,
three or five of this paragraph as a corporation not permitted to make a
combined return, then that corporation is deemed not to be in the owner-
ship structure of the overcapitalized captive insurance company, and the
closest  controlling  stockholder  will  be determined without regard to
that corporation.
  (v) If an overcapitalized captive insurance company is required  under
this  subparagraph  to  be  included  in  a combined report with another
corporation, and that other corporation is also required to be  included
in  a  combined  report with another related corporation or corporations
under this paragraph, then the overcapitalized captive insurance company
must be included in that combined report with those corporations.
  (vi) If an overcapitalized captive insurance company is  not  required
to  be  included  in  a  combined  report with another corporation under
clause (ii) or (iii) of this subparagraph, or in a combined return under
the provisions of subparagraph (v) of paragraph two of subsection (f) of
section fourteen hundred sixty-two of this chapter, then  the  overcapi-
talized  captive  insurance company is subject to the opening provisions
of this paragraph and the provisions of subparagraph four of this  para-
graph. The overcapitalized captive insurance company must be included in
a  combined report under this article with another corporation if either
the substantial intercorporate transactions requirement in  the  opening
provisions of this paragraph or the inter-company transactions or agree-
ment,  understanding, arrangement or transaction requirement of subpara-
graph four of this paragraph is satisfied,  and  both  more  than  fifty
percent  of  the  voting  stock of the overcapitalized captive insurance
company and substantially all of the capital stock of that other  corpo-
ration  are  owned  and  controlled, directly or indirectly, by the same
corporation.
  (b) Computation. (1) Tax. (i) In the case of a combined report the tax
shall be measured by the combined entire net  income,  combined  minimum
taxable  income,  combined  pre-nineteen  hundred ninety minimum taxable
income or combined capital, of all  the  corporations  included  in  the
report,  including  any  captive  REIT,  captive  RIC or overcapitalized
captive insurance company; provided, however, in no event shall the  tax
measured by combined capital exceed the limitation provided for in para-
graph (b) of subdivision one of section two hundred ten of this article.
  (ii)  In the case of a captive REIT or captive RIC required under this
subdivision to be included in a combined report, entire net income  must
be computed as required under subdivision five (in the case of a captive
REIT) or subdivision seven (in the case of a captive RIC) of section two

S. 6359                            111                           A. 8559

hundred  nine of this article. However, the deduction under the internal
revenue code for dividends paid by the captive REIT or  captive  RIC  to
any  member  of  the affiliated group that includes the corporation that
directly  or  indirectly  owns over fifty percent of the voting stock of
the captive REIT or captive RIC shall not be allowed for  taxable  years
beginning  on  or  after  January  first,  two  thousand eight. The term
"affiliated group"  means  "affiliated  group"  as  defined  in  section
fifteen hundred four of the internal revenue code, but without regard to
the exceptions provided for in subsection (b) of that section.
  (iii)  In  the  case  of  an overcapitalized captive insurance company
required under this subdivision to be included  in  a  combined  report,
entire  net  income  must be computed as required by subdivision nine of
section two hundred eight of this article.
  (2) Tax bases. In computing combined entire net income, combined mini-
mum taxable income or combined pre-nineteen hundred ninety minimum taxa-
ble income intercorporate dividends shall be  eliminated,  in  computing
combined  business  and  investment capital intercorporate stockholdings
and intercorporate bills, notes and accounts receivable and payable  and
other  intercorporate  indebtedness shall be eliminated and in computing
combined subsidiary capital intercorporate stockholdings shall be elimi-
nated, provided, however, that intercorporate dividends from a DISC or a
former DISC not exempt from tax under paragraph (i) of subdivision  nine
of  section two hundred eight of this article which are taxable as busi-
ness income under this article shall not be eliminated.
  (3) Air freight forwarders: allocation. Notwithstanding any  provision
of law to the contrary, where a combined report includes a qualified air
freight  forwarder  and a corporation described in subparagraph seven of
paragraph (a) of subdivision three of section two hundred  ten  of  this
chapter  (relating  to aviation corporations), in computing the combined
business allocation percentage such subparagraph seven shall be  applied
with  respect  to  such  qualified air freight forwarder] FOR PROVISIONS
RELATING TO COMBINED REPORTS, SEE SECTION  TWO  HUNDRED  TEN-C  OF  THIS
ARTICLE.
  5.  In  case it shall appear to the [tax commission] COMMISSIONER that
any agreement, understanding or arrangement exists between the  taxpayer
and  any  other corporation or any person or firm, whereby the activity,
business, income or capital of the taxpayer within the state is  improp-
erly  or  inaccurately  reflected,  the [tax commission] COMMISSIONER is
authorized and empowered, in [its] THE COMMISSIONER'S discretion and  in
such  manner  as [it] THE COMMISSIONER may determine, to adjust items of
income, deductions and capital, and to eliminate assets in computing any
[allocation] APPORTIONMENT percentage  provided  only  that  any  income
directly  traceable  thereto  be  also  excluded from entire net income,
[minimum taxable income or pre-nineteen hundred ninety  minimum  taxable
income,]  so  as  equitably to determine the tax. Where (a) any taxpayer
conducts its activity or business under any  agreement,  arrangement  or
understanding in such manner as either directly or indirectly to benefit
its  members  or  stockholders, or any of them, or any person or persons
directly or indirectly interested  in  such  activity  or  business,  by
entering  into  any transaction at more or less than a fair price which,
but for such agreement, arrangement or understanding,  might  have  been
paid or received therefor, or (b) any taxpayer, a substantial portion of
whose  capital  stock  is owned either directly or indirectly by another
corporation, enters into any transaction with such other corporation  on
such terms as to create an improper loss or net income, the [tax commis-
sion]  COMMISSIONER may include in the entire net income[, minimum taxa-

S. 6359                            112                           A. 8559

ble income or pre-nineteen hundred ninety minimum taxable income] of the
taxpayer the fair profits which, but for such agreement, arrangement  or
understanding,  the  taxpayer  might have derived from such transaction.
WHERE ANY TAXPAYER OWNS, DIRECTLY OR INDIRECTLY, MORE THAN FIFTY PERCENT
OF THE CAPITAL STOCK OF ANOTHER CORPORATION SUBJECT TO TAX UNDER SECTION
FIFTEEN HUNDRED TWO-A OF THIS CHAPTER AND FIFTY PERCENT OR LESS OF WHOSE
GROSS RECEIPTS FOR THE TAXABLE YEAR CONSIST OF PREMIUMS, THE COMMISSION-
ER  MAY  INCLUDE  IN  THE ENTIRE NET INCOME OF THE TAXPAYER, AS A DEEMED
DISTRIBUTION, THE AMOUNT OF THE NET INCOME OF THE OTHER CORPORATION THAT
IS IN EXCESS OF ITS NET PREMIUM INCOME.
  S 19-a. Subdivision 13 of section 211 of the tax law is REPEALED.
  S 20.  Subdivision 11 of section 2 of the tax law, as added by section
1 of part E-1 of chapter 57 of the laws of 2009, is amended to  read  as
follows:
  11.  The term "[overcapitalized] COMBINABLE captive insurance company"
means an entity that is treated as an association taxable  as  a  corpo-
ration  under  the  internal revenue code (a) more than fifty percent of
the voting stock of which is owned or controlled, directly or  indirect-
ly,  by  a  single entity that is treated as an association taxable as a
corporation under the internal revenue code and not exempt from  federal
income  tax;  (b)  that is licensed as a captive insurance company under
the laws of this state or another jurisdiction; AND (c)  whose  business
includes  providing,  directly  and indirectly, insurance or reinsurance
covering the risks of  its  parent  and/or  members  of  its  affiliated
group[;  and  (d)  fifty percent or less of whose gross receipts for the
taxable year consist of premiums].   For purposes of  this  subdivision,
"affiliated group" has the same meaning as that term is given in section
1504  of  the internal revenue code, except that the term "common parent
corporation" in that section is deemed to mean any person, as defined in
section 7701 of the internal revenue code[;] AND references to "at least
eighty percent" in section 1504 of the internal revenue code are  to  be
read  as  "fifty  percent or more;" section 1504 of the internal revenue
code is to be read without regard to  the  exclusions  provided  for  in
subsection (b) of that section[; "premiums" has the same meaning as that
term  is  given  in  paragraph one of subdivision (c) of section fifteen
hundred ten of this chapter, except that it includes  consideration  for
annuity  contracts and excludes any part of the consideration for insur-
ance, reinsurance or annuity contracts that do  not  provide  bona  fide
insurance,   reinsurance  or  annuity  benefits;  and  "gross  receipts"
includes the amounts included in gross receipts for purposes of  section
501(c) (15) of the internal revenue code, except that those amounts also
include all premiums as defined in this subdivision].
  S  21.  Subdivision  (a) of section 1500 of the tax law, as separately
amended by section 1 of part B-1 and section 8 of part E-1 of chapter 57
of the laws of 2009, is amended to read as follows:
  (a) The term "insurance corporation" includes a  corporation,  associ-
ation,  joint stock company or association, person, society, aggregation
or partnership, by whatever name known,  doing  an  insurance  business,
and, notwithstanding the provisions of section fifteen hundred twelve of
this  article,  shall  include  (1) a risk retention group as defined in
subsection (n) of section five thousand nine hundred two of  the  insur-
ance  law,  (2)  the state insurance fund and (3) a corporation, associ-
ation, joint stock company or association, person, society,  aggregation
or  partnership  doing an insurance business as a member of the New York
insurance exchange described in section six thousand two hundred one  of
the  insurance  law.  The  definition  of  the  "state  insurance  fund"

S. 6359                            113                           A. 8559

contained in this subdivision shall be limited  in  its  effect  to  the
provisions  of  this  article and the related provisions of this chapter
and shall have no force and effect  other  than  with  respect  to  such
provisions.  The  term  "insurance  corporation"  shall  also  include a
captive insurance company doing a captive insurance business, as defined
in subsections (c) and (b), respectively, of section seven thousand  two
of  the  insurance law; provided, however, "insurance corporation" shall
not include the metropolitan transportation authority, or a public bene-
fit corporation or not-for-profit corporation formed by a  city  with  a
population  of one million or more pursuant to subsection (a) of section
seven thousand five of the insurance law, each  of  which  is  expressly
exempt  from the payment of fees, taxes or assessments, whether state or
local; and provided further "insurance corporation" does not include any
[overcapitalized] COMBINABLE captive insurance company. The term "insur-
ance corporation" shall also include an unauthorized  insurer  operating
from  an  office  within  the  state,  pursuant  to  paragraph  five  of
subsection (b) of section one thousand one hundred  one  and  subsection
(i)  of section two thousand one hundred seventeen of the insurance law.
The term "insurance corporation"  also  includes  a  health  maintenance
organization required to obtain a certificate of authority under article
forty-four of the public health law.
  S  22. Subdivision (a) of section 1502-b of the tax law, as amended by
section 9 of part E-1 of chapter 57 of the laws of 2009 and  as  further
amended  by  section 104 of part A of chapter 62 of the laws of 2011, is
amended to read as follows:
  (a) In lieu of the taxes and tax surcharge imposed by sections fifteen
hundred one, fifteen hundred two-a, fifteen hundred five-a, and  fifteen
hundred ten of this article, every captive insurance company licensed by
the  superintendent  of financial services pursuant to the provisions of
article seventy of the insurance law, other than the metropolitan trans-
portation authority and a public benefit corporation  or  not-for-profit
corporation  formed  by  a city with a population of one million or more
pursuant to subsection (a) of section seven thousand five of the  insur-
ance  law,  each  of which is expressly exempt from the payment of fees,
taxes or assessments whether state or local, and other than [an overcap-
italized] COMBINABLE captive insurance company, shall, for the privilege
of exercising its corporate franchise, pay a tax on (1) all gross direct
premiums, less return premiums thereon,  written  on  risks  located  or
resident  in  this  state and (2) all assumed reinsurance premiums, less
return premiums thereon, written on risks located or  resident  in  this
state.  The  rate  of  the tax imposed on gross direct premiums shall be
four-tenths of one percent on all  or  any  part  of  the  first  twenty
million  dollars  of premiums, three-tenths of one percent on all or any
part of the second twenty million dollars of premiums, two-tenths of one
percent on all or any part of the third twenty million dollars of premi-
ums, and seventy-five thousandths of  one  percent  on  each  dollar  of
premiums thereafter. The rate of the tax on assumed reinsurance premiums
shall  be  two  hundred twenty-five thousandths of one percent on all or
any part of the first twenty million dollars of  premiums,  one  hundred
and  fifty  thousandths  of one percent on all or any part of the second
twenty million dollars of premiums, fifty thousandths of one percent  on
all  or  any  part  of  the third twenty million dollars of premiums and
twenty-five thousandths of one percent on each dollar of premiums there-
after. The tax imposed by this section shall be equal to the greater  of
(i)  the  sum  of  the  tax imposed on gross direct premiums and the tax
imposed on assumed reinsurance premiums or (ii) five thousand dollars.

S. 6359                            114                           A. 8559

  S 23. Paragraph 4 of subdivision (f) of section 1515 of the  tax  law,
as amended by section 16 of part FF-1 of chapter 57 of the laws of 2008,
is amended to read as follows:
  (4)(i)  For  purposes of this paragraph, the term "closest controlling
stockholder" means the corporation that indirectly owns or controls over
fifty percent of the voting stock of a captive REIT or captive  RIC,  is
subject  to  tax under section fifteen hundred one of this article[,] OR
article nine-A [or article thirty-two] of this chapter or required to be
included in a combined return or report under this article[,] OR article
nine-A [or article thirty-two] of this chapter, and is the fewest  tiers
of corporations away in the ownership structure from the captive REIT or
captive  RIC.  The commissioner is authorized to prescribe by regulation
or published guidance the criteria for determining the closest  control-
ling stockholder.
  (ii)  A  captive  REIT or a captive RIC must be included in a combined
return with the corporation that directly owns or  controls  over  fifty
percent  of  the voting stock of the captive REIT or captive RIC if that
corporation is a life insurance corporation and is  subject  to  tax  or
required to be included in a combined return under this article.
  (iii)  If  over fifty percent of the voting stock of a captive REIT or
captive RIC is not directly owned or  controlled  by  a  life  insurance
corporation  that  is  subject  to  tax  or required to be included in a
combined return under this article, [then the captive  REIT  or  captive
RIC must be included in a combined report or return with the corporation
that  is  the  closest  controlling  stockholder  of the captive REIT or
captive RIC. If] AND the closest controlling stockholder of the  captive
REIT  or  captive RIC is a life insurance corporation that is subject to
tax or required to be included in a combined return under this  article,
then  the  captive  REIT  or  captive RIC must be included in a combined
return WITH THE CLOSEST CONTROLLING STOCKHOLDER under this article.
  (iv) If a captive REIT owns the stock of a qualified  REIT  subsidiary
(as  defined in paragraph two of subsection (i) of section eight hundred
fifty-six of the internal revenue code) AND THE CAPTIVE REIT IS REQUIRED
TO BE INCLUDED IN A COMBINED RETURN UNDER SUBPARAGRAPHS (II) OR (III) OF
THIS PARAGRAPH, then the qualified REIT subsidiary must be  included  in
any  combined  return  required to be made by the captive REIT that owns
the stock of the qualified REIT subsidiary.
  (v) If a captive REIT or a captive RIC is required  under  this  para-
graph  to be included in a combined return with another corporation, and
that other corporation is required to be included in a  combined  return
with  another  [related]  corporation  under  this subdivision, then the
captive REIT or the captive RIC must be included in that combined return
with the other [related] corporation.
  S 24. Subdivisions (a), (b) and (c) of section 12 of the tax  law,  as
added  by  chapter  615  of  the  laws  of  1998, are amended to read as
follows:
  (a) For purposes of subdivision (b) of this section, the term "person"
shall mean a corporation, joint stock company or association,  insurance
corporation,  or  banking  corporation,  as  such  terms  are defined in
section one  hundred  eighty-three,  one  hundred  eighty-four,  or  one
hundred  eighty-six,  or in article nine-A[, thirty-two] or thirty-three
of this chapter, imposing tax on such entities.
  (b) No person shall be subject to the taxes imposed under section  one
hundred eighty-three, one hundred eighty-four or one hundred eighty-six,
or  article nine-A[, thirty-two] or thirty-three of this chapter, solely
by reason of (1)  having its advertising stored on  a  server  or  other

S. 6359                            115                           A. 8559

computer  equipment  located in this state (other than a server or other
computer equipment owned or leased by such person), or  (2)  having  its
advertising  disseminated  or displayed on the Internet by an individual
or  entity  subject  to  tax under section one hundred eighty-three, one
hundred eighty-four or one hundred eighty-six, or article nine-A,  twen-
ty-two[, thirty-two] or thirty-three of this chapter.
  (c)  A  person,  as such term is defined in subdivision (a) of section
eleven hundred one of this chapter, shall not be deemed to be a  vendor,
for  purposes  of article twenty-eight of this chapter, solely by reason
of (1)  having its advertising stored on  a  server  or  other  computer
equipment  located  in this state (other than a server or other computer
equipment owned or leased by such person), or (2) having its advertising
disseminated or displayed on the Internet by  an  individual  or  entity
subject  to  tax  under  section  one  hundred eighty-three, one hundred
eighty-four or one hundred eighty-six, or article  nine-A,  twenty-two[,
thirty-two] or thirty-three of this chapter.
  S  25. Paragraph 1 of subdivision (a) of section 14 of the tax law, as
amended by section 3 of part V1 of chapter 109 of the laws of  2006,  is
amended to read as follows:
  (1)  except as provided in paragraphs one-a and one-b of this subdivi-
sion, for purposes of section one hundred  eighty-seven-j  and  articles
nine-A,  twenty-two[,  thirty-two] and thirty-three of this chapter, for
each of the taxable years within  the  "business  tax  benefit  period,"
which  period  shall consist of (A) in the case of a business enterprise
with a test date occurring on or before December thirty-first, two thou-
sand one, the first fifteen taxable years beginning on or after  January
first, two thousand one, (B) in the case of a business enterprise with a
test  date  occurring  on  or after January first, two thousand two, but
prior to April first, two thousand five, the fifteen taxable years  next
following  the business enterprise's test year, and (C) in the case of a
business enterprise which is first certified under article eighteen-B of
the general municipal law on or after April first,  two  thousand  five,
the  ten taxable years starting with the taxable year in which the busi-
ness enterprise's first date of certification under  article  eighteen-B
of  the  general  municipal law occurs, but only with respect to each of
such business tax benefit period years for which the employment test  is
met,
  S  26.  Subdivision  (f)  of  section 14 of the tax law, as amended by
section 10 of part CC of chapter 85 of the laws of 2002, is  amended  to
read as follows:
  (f)  Taxable  year.  The term "taxable year" means the taxable year of
the business enterprise under  section  one  hundred  eighty-three,  one
hundred  eighty-four,  one  hundred  eighty-five  or  former section one
hundred eighty-six of article nine, or  under  article  nine-A,  twenty-
two[,  thirty-two] or thirty-three of this chapter. If a business enter-
prise does not have a taxable year because it is exempt from taxation or
otherwise not required to file a return under any of  such  sections  of
article  nine or under article nine-A, twenty-two[, thirty-two] or thir-
ty-three, then the term "taxable year" means  (i)  the  business  enter-
prise's federal taxable year, or, (ii) if the enterprise does not have a
federal taxable year, the calendar year.
  S  27. Paragraph 1 of subdivision (i) of section 14 of the tax law, as
amended by section 5 of part A of chapter 63 of the  laws  of  2005,  is
amended to read as follows:
  (1)  for  purposes  of  section  one hundred eighty-seven-j of article
nine, and articles nine-A, twenty-two[, thirty-two] and thirty-three  of

S. 6359                            116                           A. 8559

this  chapter, on the first day of the taxable year during which revoca-
tion of its certification under article eighteen-B of the general munic-
ipal law occurs, and
  S  28.  Paragraphs 1 and 2 of subdivision (j) of section 14 of the tax
law, as amended by section 10 of part CC of chapter 85 of  the  laws  of
2002, are amended to read as follows:
  (1) A new business shall include any corporation, except a corporation
which  is substantially similar in operation and in ownership to a busi-
ness entity (or entities) taxable, or previously taxable, under  section
one  hundred  eighty-three, one hundred eighty-four, one hundred eighty-
five or one hundred eighty-six of article nine; article nine-A[, article
thirty-two] or thirty-three of this  chapter;  article  twenty-three  of
this  chapter or which would have been subject to tax under such article
twenty-three (as such article was in effect on January  first,  nineteen
hundred  eighty), ARTICLE THIRTY-TWO OF THIS CHAPTER OR WHICH WOULD HAVE
BEEN SUBJECT TO TAX UNDER SUCH ARTICLE THIRTY-TWO (AS SUCH  ARTICLE  WAS
IN EFFECT ON DECEMBER THIRTY-FIRST, TWO THOUSAND FOURTEEN) or the income
(or  losses) of which is (or was) includable under article twenty-two of
this chapter.
  (2) For purposes of article twenty-two of this chapter, an  individual
who is either a sole proprietor or a member of a partnership shall qual-
ify as an owner of a new business unless the business of which the indi-
vidual  is  an owner is substantially similar in operation and in owner-
ship to a business entity taxable, or previously taxable, under  section
one  hundred  eighty-three, one hundred eighty-four, one hundred eighty-
five or one hundred eighty-six of article nine; article  nine-A[,  thir-
ty-two] or ARTICLE thirty-three of this chapter; article twenty-three of
this  chapter or which would have been subject to tax under such article
twenty-three (as such article was in effect on January  first,  nineteen
hundred  eighty); ARTICLE THIRTY-TWO OF THIS CHAPTER OR WHICH WOULD HAVE
BEEN SUBJECT TO TAX UNDER SUCH ARTICLE THIRTY-TWO AS SUCH ARTICLE WAS IN
EFFECT ON DECEMBER THIRTY-FIRST, TWO THOUSAND  TEN  or  the  income  (or
losses) of which is (or was) includable under article twenty-two.
  S  29.  Clauses  (i)  and  (ii)  of subparagraph (A) of paragraph 4 of
subdivision (j) of section 14 of the tax law, as added by section  5  of
part  A  of  chapter  63  of  the  laws  of 2005, are amended to read as
follows:
  (i) Notwithstanding paragraphs one and two of this subdivision, a  new
business  shall  include any corporation which is identical in operation
and ownership to a business entity (or entities) taxable  under  section
one  hundred eighty-three, one hundred eighty-four or one hundred eight-
y-five of article nine; article nine-A[, article thirty-two] or  thirty-
three  of  this chapter or the income (or losses) of which is includable
under article twenty-two of this chapter, provided such corporation  and
such  business entity or entities are operating in different counties in
the state.
  (ii) Notwithstanding paragraphs one and two of  this  subdivision,  an
individual  who is either a sole proprietor or a member of a partnership
shall qualify as an owner of a new business if the business of which the
individual is an owner is identical in operation and in ownership  to  a
business  entity (or entities) taxable under section one hundred eighty-
three, one hundred eighty-four or one  hundred  eighty-five  of  article
nine; article nine-A[, article thirty-two] or thirty-three of this chap-
ter or the income (or losses) of which is includable under article twen-
ty-two  of this chapter, provided such business and such business entity
or entities are operating in different counties in the state.

S. 6359                            117                           A. 8559

  S 30. Subparagraph (B) of paragraph 4 of subdivision (j) of section 14
of the tax law, as amended by chapter  161  of  the  laws  of  2005,  is
amended to read as follows:
  (B) Notwithstanding any provisions of this subdivision to the contrary
and  notwithstanding  subdivision  c  of  section eighteen of part CC of
chapter eighty-five of the laws of two thousand two,  a  corporation  or
partnership,  which  was first certified under article eighteen-B of the
general municipal law before August first, two thousand two, has a  base
period  of  zero  years  or  zero employment for its base period, and is
similar in operation and in ownership to a business entity  or  entities
taxable,  or  previously  taxable, under sections specified in paragraph
one or two of this subdivision or which would have been subject  to  tax
under  article  twenty-three  of  this  chapter  (as such article was in
effect on January first, nineteen hundred eighty) OR  WHICH  WOULD  HAVE
BEEN  SUBJECT  TO  TAX UNDER ARTICLE THIRTY-TWO OF THIS CHAPTER (AS SUCH
ARTICLE WAS IN EFFECT ON DECEMBER THIRTY-FIRST, TWO  THOUSAND  FOURTEEN)
or  the  income  or  losses  of which is or was includable under article
twenty-two of this chapter shall not be deemed a new business if it  was
not  formed  for  a  valid  business purpose, as such term is defined in
clause (D) of subparagraph one of paragraph (o) of subdivision  nine  of
section  two hundred eight of this chapter and was formed solely to gain
empire zone benefits.
  S 31. Subdivision (k) of section 14 of the  tax  law,  as  amended  by
section  5  of  part  A of chapter 63 of the laws of 2005, is amended to
read as follows:
  (k) If the designation of an area as an empire zone is  no  longer  in
effect  because section nine hundred sixty-nine of the general municipal
law was not amended to extend the effective date of such designation  so
that the designations of all empire zones pursuant to article eighteen-B
of  the  general  municipal law have expired, a business enterprise that
was certified pursuant to article eighteen-B of  the  general  municipal
law  on  the day immediately preceding the day on which such designation
expired shall be deemed to continue to be certified under  such  article
eighteen-B  for purposes of this section, and sections fifteen, sixteen,
section one hundred eighty-seven-j, subdivisions [twenty-seven] FIVE and
[twenty-eight] SIX of section two hundred [ten] TEN-B, subsections  (bb)
and  (cc)  of section six hundred six, subdivision (z) of section eleven
hundred fifteen[, subsections (o) and (p) of  section  fourteen  hundred
fifty-six,]  and  subdivisions  (r)  and  (s) of section fifteen hundred
eleven of this chapter. In addition, if the designation of an area as an
empire zone is no longer in effect because section nine  hundred  sixty-
nine  of  the general municipal law was not amended to extend the effec-
tive date of such designation so that the  designations  of  all  empire
zones  pursuant  to article eighteen-B of the general municipal law have
expired, all references to empire zones in the provisions of this  chap-
ter  listed  in  the  previous  sentence  shall be read as meaning areas
designated as empire zones on the day immediately preceding the  day  on
which such designation expired.
  S  32.  Subdivisions  (a)  and  (h)  of  section 15 of the tax law, as
amended by section 5 of part A of chapter 63 of the laws  of  2005,  are
amended to read as follows:
  (a)  Allowance  of credit. A taxpayer which is a qualified empire zone
enterprise (QEZE), or which is a sole proprietor of a QEZE or  a  member
of  a  partnership  which  is  a QEZE, and which is subject to tax under
article nine-A, twenty-two[, thirty-two] or thirty-three of  this  chap-
ter,  shall  be  allowed  a  credit  against  such  tax, pursuant to the

S. 6359                            118                           A. 8559

provisions referenced in subdivision (h) of this section,  for  eligible
real property taxes.
  (h) Definitions and cross-references. For definitions of terms used in
this  section  see  section fourteen of this article. For application of
the credit provided for in this section, see the following provisions of
this chapter:
  (1) Article 9: Section 187-j.
  (2) Article 9-A: Section [210] 210-B: subdivision [27] 5.
  (3) Article 22: Section 606: subsections (i) and (bb).
  (4) [Article 32: Section 1456: subsection (o).
  (5)] Article 33: Section 1511: subdivision (r).
  S 33. Subdivision (a) of section 16  of  the  tax  law,  as  added  by
section  2  of  part GG of chapter 63 of the laws of 2000, is amended to
read as follows:
  (a) Allowance of credit. A taxpayer which is a qualified  empire  zone
enterprise  (QEZE),  or which is a sole proprietor of a QEZE or a member
of a partnership which is a QEZE, and which  is  subject  to  tax  under
article  nine-A,  twenty-two[, thirty-two] or thirty-three of this chap-
ter, shall be allowed  a  credit  against  such  tax,  pursuant  to  the
provisions referenced in subdivision (g) of this section, to be computed
as hereinafter provided.
  S 34. Paragraph 1, clause (ii) of subparagraph (B) of paragraph 2, and
subparagraph  (A) of paragraph 3 of subdivision (f) of section 16 of the
tax law, as amended by section 14 of part CC of chapter 85 of  the  laws
of 2002, are amended to read as follows:
  (1) General. The tax factor shall be, in the case of article nine-A of
this  chapter,  the [larger of the amounts] AMOUNT of tax determined for
the taxable year under [paragraphs] PARAGRAPH (a) [and (c)] of  subdivi-
sion  one  of  section  two  hundred ten of such article. The tax factor
shall be, in the case of article twenty-two of  this  chapter,  the  tax
determined  for  the  taxable  year under subsections (a) through (d) of
section six hundred one of such article. [The tax factor  shall  be,  in
the  case  of  article  thirty-two  of  this  chapter, the larger of the
amounts of tax determined for the taxable year under subsection (a)  and
paragraph  two  of subsection (b) of section fourteen hundred fifty-five
of such article.] The tax factor shall be, in the case of article  thir-
ty-three  of  this  chapter, the larger of the amounts of tax determined
for the taxable year under paragraphs one and three of  subdivision  (a)
of section fifteen hundred two of such article.
  (ii)  For  purposes of article nine-A[, thirty-two or thirty-three] of
this chapter, the term "partner's income  from  the  partnership"  means
partnership  items  of  income,  gain,  loss and deduction, and New York
modifications thereto, entering  into  [entire  net]  BUSINESS  income[,
minimum  taxable  income,  alternative  entire  net income or entire net
income plus compensation] and the term "partner's entire  income"  means
[entire  net]  BUSINESS  income[,  minimum  taxable  income, alternative
entire net income or entire net  income  plus  compensation,]  allocated
within the state.  FOR PURPOSES OF ARTICLE THIRTY-THREE OF THIS CHAPTER,
THE TERM "PARTNER'S INCOME FROM THE PARTNERSHIP" MEANS PARTNERSHIP ITEMS
OF INCOME, GAIN, LOSS AND DEDUCTION, AND NEW YORK MODIFICATIONS THERETO,
ENTERING  INTO  ENTIRE NET INCOME OR ENTIRE NET INCOME PLUS COMPENSATION
AND THE TERM "PARTNER'S ENTIRE  INCOME"  MEANS  ENTIRE  NET  INCOME,  OR
ENTIRE  NET  INCOME  PLUS  COMPENSATION, ALLOCATED WITHIN THE STATE. For
purposes of article twenty-two of  this  chapter,  the  term  "partner's
income  from  the  partnership" means partnership items of income, gain,
loss and deduction, and New York modifications  thereto,  entering  into

S. 6359                            119                           A. 8559

New  York  adjusted gross income, and the term "partner's entire income"
means New York adjusted gross income.
  (A)  Where  the  taxpayer is a qualified empire zone enterprise and is
required or permitted to make a return or report  on  a  combined  basis
under article nine-A[, thirty-two] or ARTICLE thirty-three of this chap-
ter,  the  taxpayer's tax factor shall be the amount determined in para-
graph one of this subdivision which is attributable to the income of the
qualified empire zone enterprise.   Such attribution shall  be  made  in
accordance  with  the  ratio  of  the qualified empire zone enterprise's
income allocated within the state to the combined group's income, or  in
accordance  with such other methods as the commissioner may prescribe as
providing an apportionment which reasonably reflects the portion of  the
combined  group's tax attributable to the income of the qualified empire
zone enterprise. In no event may the ratio so determined exceed 1.0.
  S 35. Subdivision (g) of section 16  of  the  tax  law,  as  added  by
section  2  of  part GG of chapter 63 of the laws of 2000, is amended to
read as follows:
  (g) Definitions and cross-references. For definitions of terms used in
this section see sections fourteen and  fifteen  of  this  article.  For
application  of the credit provided for in this section, see the follow-
ing provisions of this chapter:
  (1) Article 9-A: Section [210] 210-B:  subdivision [28]6.
  (2) Article 22: Section 606: subsections (i) and (cc).
  (3) [Article 32: Section 1456: subsection (p).
  (4)] Article 33: Section 1511: subdivision (s).
  S 36. Paragraph 1 of subdivision (b) of section 17 of the tax law,  as
added  by  section  43  of part S1 of chapter 57 of the laws of 2009, is
amended to read as follows:
  (1) The empire zones tax benefits report must  contain  the  following
information  about  the  empire  zone tax credits claimed under articles
nine, nine-A, twenty-two[, thirty-two] and thirty-three of this  chapter
during the previous calendar year:
  (A) the name of each taxpayer claiming a credit; and
  (B) the amount of each credit earned by each taxpayer.
  S  37. Subdivisions (a) and (d) of section 18 of the tax law, as added
by section 2 of part CC of chapter 63 of the laws of 2000,  are  amended
to read as follows:
  (a)  Allowance  of  credit.  A  taxpayer  subject to tax under article
nine-A, twenty-two[, thirty-two] or thirty-three of this  chapter  shall
be  allowed a credit against such tax, pursuant to the provisions refer-
enced in subdivision (d) of this section, with respect to the  ownership
of  eligible low-income buildings for which an eligibility statement has
been issued by the commissioner of housing and  community  renewal.  The
amount  of  the credit shall be the credit amount for each such building
allocated by such commissioner as  provided  in  article  two-A  of  the
public  housing  law. The credit amount shall be allowed for each of the
ten taxable years in the credit period, and any reduction in  first-year
credit  as provided in subdivision two of section twenty-two of such law
shall be allowed in the eleventh taxable year.
  (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] 210-B:  subdivision [30] 15,
  (2) Article 22: Section 606: subsections (i) and (x),
  (3) [Article 32: Section 1456: subsection (l),
  (4)] Article 33: Section 1511: subdivision (n).

S. 6359                            120                           A. 8559

  S  38. Subparagraph (A) of paragraph 1 of subdivision (a) and subdivi-
sion (f) of section 19 of the tax law, as added by section 2 of part  II
of chapter 63 of the laws of 2000, are amended to read as follows:
  (A)  Green  building  credit.  A taxpayer subject to tax under article
nine, nine-A, twenty-two[, thirty-two] or thirty-three of  this  chapter
shall  be  allowed a green building credit against such tax, pursuant to
the provisions referenced in subdivision (f) of this section.  Provided,
however,  no  credit  shall  be  allowed  under  this section unless the
taxpayer has complied with the applicable requirements of paragraph  two
of  subdivision  (d)  of  this section (relating to reports to DEC). The
amount of the credit shall be the sum of the credit components specified
in paragraphs two through seven of this subdivision. Provided,  however,
the  amount of each such credit component shall not exceed the limit set
forth in the initial credit component certificate obtained  pursuant  to
subdivision  (c)  of  this  section. In the determination of such credit
components, no cost paid or incurred by the taxpayer shall be the  basis
for more than one such component.
  (f)  Cross-references.  For  application of the credit provided for in
this section, see the following provisions of this chapter:
  (1) Article nine: Section one hundred eighty-seven-d;
  (2) Article nine-A: Subdivision [thirty-one] SIXTEEN  of  section  two
hundred [ten] TEN-B;
  (3) Article twenty-two: Subsections (i) and (y) of section six hundred
six;
  (4)  [Article  thirty-two:  Subsection (m) of section fourteen hundred
fifty-six;
  (5)] Article thirty-three: Subdivision (o) of section fifteen  hundred
eleven.
  S  39.  Paragraphs 1 and 5 of subdivision (a) of section 21 of the tax
law, as amended by section 1 of part H of chapter 577  of  the  laws  of
2004, are amended to read as follows:
  (1)  General.  A  taxpayer  subject to tax under article nine, nine-A,
twenty-two[, thirty-two]  or  thirty-three  of  this  chapter  shall  be
allowed a credit against such tax, pursuant to the provisions referenced
in  subdivision  (f)  of this section. Such credit shall be allowed with
respect to a qualified site, as such term is defined in paragraph one of
subdivision (b) of this section. The amount of the credit in  a  taxable
year  shall  be the sum of the credit components specified in paragraphs
two, three and four of this subdivision applicable in such year.
  (5) Applicable percentage. For purposes of paragraphs two,  three  and
four  of  this  subdivision,  the  applicable percentage shall be twelve
percent in the case of credits  claimed  under  article  nine,  nine-A[,
thirty-two] or thirty-three of this chapter, and ten percent in the case
of credits claimed under article twenty-two of this chapter, except that
where  at least fifty percent of the area of the qualified site relating
to the credit provided for in this section is  located  in  an  environ-
mental  zone  as  defined  in  paragraph  six of subdivision (b) of this
section, the applicable percentage shall be increased by  an  additional
eight  percent. Provided, however, as afforded in section 27-1419 of the
environmental conservation law, if the certificate of  completion  indi-
cates  that  the  qualified  site has been remediated to Track 1 as that
term is described in subdivision four of section 27-1415 of the environ-
mental conservation law, the applicable  percentage  set  forth  in  the
first sentence of this paragraph shall be increased by an additional two
percent.

S. 6359                            121                           A. 8559

  S  39-a.  Subdivisions  (c)  and  (f) of section 21 of the tax law, as
added by section 1 of part H of chapter 1  of  the  laws  of  2003,  are
amended to read as follows:
  (c)  Qualifying  property.  Property  which  qualifies  for the credit
provided for under this section and also for a credit provided  for  (1)
under either subdivision [twelve] ONE or subdivision [twelve-B] THREE of
section  two  hundred  [ten]  TEN-B  of  this  chapter,  or both, OR (2)
subsection (a) or subsection (j) of section  six  hundred  six  of  this
chapter,  or  both[, (3) the credit provided for under subsection (i) of
section fourteen hundred fifty-six of this chapter, or  (4)  the  credit
provided under subdivision (q) of section fifteen hundred eleven of this
chapter]  may be the basis for either the credit provided for under this
section or one of the credits enumerated in paragraph  one[,]  OR  two[,
three or four] of this subdivision, but not both.
  (f)  Cross-references.  For  application of the credit provided for in
this section, see the following provisions of this chapter:
  (1) Article 9: Section 187-g
  (2) Article 9-A: Section [210] 210-B, subdivision [33] 17
  (3) Article 22: Section 606, subsections (i) and (dd)
  (4) [Article 32: Section 1456, subsection (q)
  (5)] Article 33: Section 1511, subdivision (u).
  S 40. Paragraph 3 of subdivision (a) and paragraphs 1 and 9 of  subdi-
vision (b) of section 22 of the tax law, as amended by section 4 of part
H of chapter 577 of the laws of 2004, are amended to read as follows:
  (3)  Developer.  (i)  A  "developer" is a taxpayer under article nine,
nine-A, twenty-two[, thirty-two] or thirty-three of this chapter who  or
which  either  (I)  has  been  issued  a  certificate of completion with
respect to a qualified site or (II) has purchased or in  any  other  way
has been conveyed all or any portion of a qualified site from a taxpayer
or  any  other  party  who  or  which  has  been issued a certificate of
completion with respect to such site provided, such purchase or  convey-
ance  occurs within seven years of the effective date of the certificate
of completion issued with respect to  such  qualified  site.    Provided
further, that the taxpayer who or which is purchasing all or any portion
of a qualified site and the taxpayer or any other party who or which has
been  issued  a  certificate of completion with respect to such site may
not be related persons, as such term is defined in subparagraph  (C)  of
paragraph  three of subsection (b) of section four hundred sixty-five of
the internal revenue code.
  (ii) Where the entity to whom a certificate  of  completion  has  been
issued  is a partnership, or where the entity which has purchased all or
any portion of a qualified site from a taxpayer who or  which  has  been
issued  a certificate of completion with respect to such site within the
applicable time limit is a partnership, any partner in such  partnership
who  or  which is taxable under article nine, nine-A, twenty-two[, thir-
ty-two] or thirty-three of this chapter shall be a developer under  this
paragraph. Where the entity to whom a certificate of completion has been
issued  is  a  New  York  S  corporation,  or where the entity which has
purchased all or any portion of a qualified site from a taxpayer who  or
which  has  been issued a certificate of completion with respect to such
site within the applicable time limit is a New York S  corporation,  any
shareholder  in  such  New York S corporation shall be a developer under
this paragraph.
  (1) Allowance of credit. A developer of a qualified site who or  which
is  subject  to tax under article nine, nine-A, twenty-two[, thirty-two]
or thirty-three of this chapter, shall be allowed a credit against  such

S. 6359                            122                           A. 8559

tax,  pursuant  to  the  provisions referenced in paragraph nine of this
subdivision, for eligible real property taxes imposed on such site.
  (9)  Cross-references.  For  application of the credit provided for in
this subdivision, see the following provisions of this chapter:
  (i) Article 9: Section 187-h.
  (ii) Article 9-A: Section [210] 210-B:  subdivision [34] 18.
  (iii) Article 22: Section 606: subsections (i) and (ee).
  (iv) [Article 32: Section 1456: subsection (r).
  (v)] Article 33: Section 1511: subdivision (v).
  S 41. Subdivision (a) of section 23 of the  tax  law,  as  amended  by
section 10 of part H chapter 577 of the laws of 2004, is amended to read
as follows:
  (a)  Allowance  of  credit.  General.  A taxpayer subject to tax under
article nine, nine-A, twenty-two[, thirty-two] or thirty-three  of  this
chapter  shall  be  allowed  a  credit against such tax, pursuant to the
provisions referenced in subdivision (e) of this section. The amount  of
such  credit  shall be equal to the lesser of thirty thousand dollars or
fifty percent of the premiums paid on or after the date  of  the  brown-
field site cleanup agreement executed by the taxpayer and the department
of  environmental  conservation pursuant to section 27-1409 of the envi-
ronmental conservation law by the taxpayer for environmental remediation
insurance issued with respect to a qualified site.
  S 42. Subdivision (e) of section 23  of  the  tax  law,  as  added  by
section  19  of  part  H of chapter 1 of the laws of 2003, is amended to
read as follows:
  (e) Cross-references. For application of the credit  provided  for  in
this section, see the following provisions of this chapter:
  (1) Article 9: Section 187-i
  (2) Article 9-A: Section [210] 210-B, subdivision [35] 19
  (3) Article 22: Section 606, subsections (i) and (ff)
  (4) [Article 32: Section 1456, subsection (s)
  (5)] Article 33: Section 1511, subdivision (w).
  S 43. Paragraphs 1 and 2 of subdivision (a) and clause (i) of subpara-
graph  (D)  of  paragraph  1 of subdivision (b) of section 25 of the tax
law, as added by section 1 of part N of chapter 61 of the laws of  2005,
are amended to read as follows:
  (1)  Every  taxpayer,  or  person as defined in section seven thousand
seven hundred one of the internal  revenue  code,  required  to  file  a
disclosure  statement  with  the  internal  revenue  service pursuant to
section six thousand eleven of the internal revenue code, or  the  regu-
lations promulgated thereunder, related to a reportable transaction or a
listed  transaction, as those terms are defined in such section or regu-
lations, must attach a duplicate of such  disclosure  statement  to  the
return or report required to be filed by such taxpayer or person for the
taxable  year  under  article  nine, nine-A, twenty-two[, thirty-two] or
thirty-three of this chapter, and provide such other information related
to such disclosure as prescribed by the  commissioner.  Such  disclosure
shall be made notwithstanding that one member of an affiliated group, as
defined  by  section  fifteen hundred four of the internal revenue code,
may file such disclosure statement with the internal revenue service  on
behalf of its affiliates including such taxpayer or person.
  (2)  Every  taxpayer  or  such  person  who participates in a New York
reportable transaction for a taxable year  must  disclose  such  partic-
ipation  with  its  return  or report required to be filed under article
nine, nine-A, twenty-two[, thirty-two] or thirty-three of  this  chapter
for  the  taxable  year  in  a  form prescribed by the commissioner, and

S. 6359                            123                           A. 8559

provide such other information related to such transaction as prescribed
by the commissioner. A New York reportable transaction is a  transaction
that  has  the potential to be a tax avoidance transaction as determined
by the commissioner.
  (i)  the  list  required  to  be maintained by such person pursuant to
section six thousand one hundred twelve of  the  internal  revenue  code
identifies  or  is  required to identify a taxpayer subject to tax under
article nine, nine-A, twenty-two[, thirty-two] or thirty-three  of  this
chapter, and
  S  44. Subdivisions (a) and (f) of section 26 of the tax law, as added
by chapter 537 of the laws of 2005, are amended to read as follows:
  (a) Allowance of credit. A taxpayer, which is  subject  to  tax  under
article  nine,  nine-A, twenty-two[, thirty-two] or thirty-three of this
chapter and which is a qualified building  owner,  shall  be  allowed  a
credit  against  such tax.   The amount of the credit allowed under this
section shall equal the sum of the number of qualified security officers
providing protection to a building or buildings owned  by  the  taxpayer
multiplied  by  three  thousand  dollars. Provided, however, that in the
case of a worker not so employed for a full year, such amount  shall  be
prorated  to  reflect the length of such employment under regulations of
the commissioner.
  (f) Cross-references. For application of the credit  provided  for  in
this section, see the following provisions of this chapter:
  (1) article 9: section 187-n.
  (2) article 9-A: section [210] 210-B:  subdivision [37] 21.
  (3) article 22: section 606: subsection (ii).
  (4) [article 32: section 1456: subsection (t).
  (5)] article 33: section 1511: subdivision (x).
  S 45. Paragraph 3 of subdivision (a) and subdivision (c) of section 28
of  the  tax  law,  as added by section 2 of part V of chapter 62 of the
laws of 2006, are amended to read as follows:
  (3) No qualified production costs used by a  taxpayer  either  as  the
basis for the allowance of the credit provided for under this section or
used  in  the  calculation of the credit provided for under this section
shall be used by such taxpayer to claim any other credit allowed  pursu-
ant to this chapter.
  Notwithstanding  any  provisions  of  this  section to the contrary, a
corporation or partnership, which otherwise  qualifies  as  a  qualified
commercial production company, and is similar in operation and in owner-
ship  to  a  business entity or entities taxable, or previously taxable,
under section one hundred eighty-three, one hundred eighty-four  or  one
hundred  eighty-five  of  article nine; article nine-A[, article thirty-
two] or thirty-three of this chapter or which would have been subject to
tax under article twenty-three of this chapter (as such article  was  in
effect  on  January  first, nineteen hundred eighty) OR WHICH WOULD HAVE
BEEN SUBJECT TO TAX UNDER ARTICLE THIRTY-TWO OF THIS  CHAPTER  (AS  SUCH
ARTICLE  WAS  IN EFFECT ON DECEMBER THIRTY-FIRST, TWO THOUSAND FOURTEEN)
or the income or losses of which is  or  was  includable  under  article
twenty-two  of  this chapter shall not be deemed a new or separate busi-
ness, and therefore shall not be eligible for  empire  state  commercial
production  benefits, if it was not formed for a valid business purpose,
as such term is defined in clause (D) of subparagraph one  of  paragraph
(o) of subdivision nine of section two hundred eight of this chapter and
was  formed  solely  to  gain  empire state commercial production credit
benefits.

S. 6359                            124                           A. 8559

  (c) Cross-references. For application of the credit  provided  for  in
this section, see the following provision of this chapter:
  (1) article 9-A: section [210] 210-B:  subdivision [38] 23.
  (2) article 22: section 606: subsection (jj).
  S  46.  Subdivision  (d)  of  section  28  of the tax law, as added by
section 1 of part X of chapter 62 of the laws of  2006,  is  amended  to
read as follows:
  (d)  Cross-references.  For  application of the credit provided for in
this section, see the following provisions of this chapter:
  (1) Article 9: Section 187-c.
  (2) Article 9-A: Section [210] 210-B, subdivision [38] 24.
  (3) Article 22: Section 606, subsections (i) and (jj).
  S 47. The opening paragraph of subdivision (a)  and  subdivisions  (c)
and  (g) of section 31 of the tax law, the opening paragraph of subdivi-
sion (a) and subdivision (g) as amended by section 7 of part G of  chap-
ter  61  of  the  laws of 2011, subdivision (c) as added by section 2 of
part MM of chapter 59 of the laws  of  2010,  are  amended  to  read  as
follows:
  General.  A  taxpayer subject to tax under section one hundred eighty-
five, article nine-A, twenty-two[, thirty-two] or thirty-three  of  this
chapter  shall  be  allowed  a  credit against such tax, pursuant to the
provisions referenced in subdivision (g) of this section. The amount  of
the  credit,  allowable  for up to ten consecutive taxable years, is the
sum of the following four credit components:
  (c) Election of credit. A taxpayer who or which is qualified to  claim
the  excelsior  investment tax credit component and is also qualified to
claim the investment tax credit provided for under subdivision  [twelve]
ONE of section two hundred [ten,] TEN-B OR subsection (a) of section six
hundred  six[,  or subsection (i) of section fourteen hundred fifty-six]
of this chapter, may claim either the excelsior  investment  tax  credit
component  or  the  investment tax credit, but not both with regard to a
particular piece of property. In addition, a taxpayer who  or  which  is
qualified  to claim the excelsior investment tax credit component and is
also qualified to claim the brownfield tangible property  credit  compo-
nent  under  section twenty-one of this article, as added by chapter one
of the laws of two  thousand  three,  may  claim  either  the  excelsior
investment  tax credit component or such tangible property credit compo-
nent, but not both with regard to a particular piece  of  property.  The
election  to  claim  the  excelsior investment tax credit component, the
investment tax credit or the brownfield tangible property credit  compo-
nent, with regard to the same property, is irrevocable.
  (g)  Cross-references.  For  application of the credit provided for in
this section, see the following provisions of this chapter:
  (1) article 9: section 187-q.
  (2) article 9-A: section [210] 210-B: subdivision [41] 31.
  (3) article 22: section 606: subsection (qq).
  (4) [article 32: section 1456: subsection (u).
  (5)] article 33: section 1511: subdivision (y).
  S 48. Subdivision (d) of section 31  of  the  tax  law,  as  added  by
section  12  of  part Q of chapter 57 of the laws of 2010, is amended to
read as follows:
  (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] 210-B: subdivision [41] 32.
  (2) article 22: section 606: subsection (qq).

S. 6359                            125                           A. 8559

  S  49. Subdivision 3 of section 34 of the tax law, as added by section
2 of part Y of chapter 57 of the laws of 2010, is  amended  to  read  as
follows:
  3.  (a) For application of the temporary deferral nonrefundable payout
credit, see the following provisions of this chapter:
  (1) Article 9: section 187-0
  (2) Article 9-A: section [210(41)] 210-B(33)
  (3) Article 22: section 606(qq)
  (4) [Article 32: section 1456(v)
  (5)] Article 33: section 1511(y)
  (b) For application of the temporary deferral refundable payout  cred-
it, see the following provisions of this chapter:
  (1) Article 9: section 187-p
  (2) Article 9-A: section [210(42)] 210-B(34)
  (3) Article 22: section 606(rr)
  (4) [Article 32: section 1456(w)
  (5)] Article 33: section 1511(z)
  S  50.  The  opening paragraph of subdivision (a), subparagraph (C) of
paragraph 2 of subdivision (e), and subdivision (f) of section 35 of the
tax law, as added by section 3 of part V of chapter 61 of  the  laws  of
2011, are amended to read as follows:
  A taxpayer which is a participant or the owner of a participant in the
economic transformation and facility redevelopment program under article
eighteen  of  the  economic development law that is subject to tax under
section one hundred eighty-five of  article  nine,  or  article  nine-A,
twenty-two[,  thirty-two]  or  thirty-three  of  this  chapter  shall be
allowed the sum of following components against such  tax,  pursuant  to
the provisions referenced in subdivision (f) of this section.
  (C) the business entity must not be substantially similar in ownership
and  operation  to  another taxpayer taxable or previously taxable under
section one hundred eighty-three, one hundred eighty-four or one hundred
eighty-five of article nine, former section one  hundred  eighty-six  of
this chapter or article nine-A, twenty-two[, thirty-two] or thirty-three
of  this  chapter  OR  FORMER  ARTICLE THIRTY-TWO OF THIS CHAPTER or the
income or losses of which is or was includable under article  twenty-two
of this chapter;
  (f)  Cross-references.  For application of the credits provided for in
this section, see the following provisions of this chapter:
  (1) section 185: section 187-r.
  (2) article 9-A: section [210(43)] 210-B(35).
  (3) article 22: section 606 (ss).
  (4) [article 32: section 1456(x).
  (5)] article 33: section 1511 (aa).
  S 51. Subdivisions (a) and (e) of section 36 of the tax law, as  added
by section 2 of part E of chapter 56 of the laws of 2011, are amended to
read as follows:
  (a)  Allowance  of  credit.  A  taxpayer  subject to tax under article
nine-A, twenty-two[, thirty-two] or thirty-three of this  chapter  shall
be  allowed a credit against such tax, pursuant to the provisions refer-
enced in subdivision (e) of this section.  The  amount  of  the  credit,
allowable  for  ten consecutive tax years, is equal to the amount deter-
mined pursuant to section  four  hundred  twenty-five  of  the  economic
development law.
  (e)  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] 210-B, subdivision [44] 37;

S. 6359                            126                           A. 8559

  (2) article 22: section 606, subsection (tt);
  (3) [article 32: section 1456, subsection (y);
  (4)] article 33, section 1511, subdivision (bb).
  S  52. Subdivision (c) of section 37 of the tax law, as added by chap-
ter 109 of the laws of 2012, is amended to read as follows:
  (c) 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] 210-B, subdivision [45] 39.
  (2) Article 22: Section 606, subsections (i) and (uu).
  S 52-a. Subdivision (c) of section 39 of the tax law is REPEALED.
  S  53.  Paragraphs  2, 3 and 4 of subdivision (k) of section 39 of the
tax law, paragraphs 2 and 3 as added by section 2 of part A  of  chapter
68  of  the  laws  of  2013,  paragraph 4 as amended by section 2 of LBD
number 74039-02-4, are amended to read as follows:
  [(2) Article 9: section 180, subdivision 3.
  (3) Article 9: section 181, subdivision 3.]
  (4) Article 9-A: section [210] 210-B, subdivision [47] 41 and subdivi-
sion [48] 44.
  S 54. Subdivision 1 of section 171-a of the tax  law,  as  amended  by
section  1  of  part  R of chapter 60 of the laws of 2004, is amended to
read as follows:
  1. All taxes, interest, penalties and fees collected  or  received  by
the commissioner or the commissioner's duly authorized agent under arti-
cles nine (except section one hundred eighty-two-a thereof and except as
otherwise  provided  in  section  two  hundred  five  thereof),  nine-A,
twelve-A (except as otherwise provided in section  two  hundred  eighty-
four-d  thereof),  thirteen, thirteen-A (except as otherwise provided in
section  three  hundred  twelve  thereof),  eighteen,  nineteen,  twenty
(except  as otherwise provided in section four hundred eighty-two there-
of),  twenty-one,  twenty-two,  twenty-six,  twenty-six-B,  twenty-eight
(except  as  otherwise  provided in section eleven hundred two or eleven
hundred three thereof), twenty-eight-A, thirty-one (except as  otherwise
provided  in section fourteen hundred twenty-one thereof), [thirty-two,]
thirty-three and thirty-three-A of this chapter shall be deposited daily
in one account with such responsible  banks,  banking  houses  or  trust
companies  as may be designated by the comptroller, to the credit of the
comptroller. Such an account may be established in one or more  of  such
depositories.  Such  deposits  shall be kept separate and apart from all
other money in the possession of the comptroller. The comptroller  shall
require  adequate  security  from  all  such  depositories. Of the total
revenue collected or received under such articles of this  chapter,  the
comptroller  shall  retain in the comptroller's hands such amount as the
commissioner may determine to be necessary for refunds or reimbursements
under such articles of this chapter [and article  ten  thereof]  out  of
which  amount the comptroller shall pay any refunds or reimbursements to
which taxpayers shall be entitled under the provisions of such  articles
of  this  chapter  [and  article  ten thereof]. The commissioner and the
comptroller shall maintain a system of accounts showing  the  amount  of
revenue  collected  or  received  from each of the taxes imposed by such
articles. The comptroller,  after  reserving  the  amount  to  pay  such
refunds  or  reimbursements,  shall,  on or before the tenth day of each
month, pay into the state treasury to the credit of the general fund all
revenue deposited under this section during the preceding calendar month
and remaining to the comptroller's  credit  on  the  last  day  of  such
preceding  month, (i) except that the comptroller shall pay to the state
department of social services that amount of overpayments of tax imposed

S. 6359                            127                           A. 8559

by article twenty-two of this chapter and the interest  on  such  amount
which  is certified to the comptroller by the commissioner as the amount
to be credited against past-due support pursuant to subdivision  six  of
section  one  hundred  seventy-one-c of this [chapter] ARTICLE, (ii) and
except that the comptroller shall pay  to  the  New  York  state  higher
education  services  corporation and the state university of New York or
the city university of New York respectively that amount of overpayments
of tax imposed by article twenty-two of this chapter and the interest on
such amount which is certified to the comptroller by the commissioner as
the amount to be credited against the amount of defaults in repayment of
guaranteed student loans and state university loans or  city  university
loans  pursuant to subdivision five of section one hundred seventy-one-d
and subdivision six of section one hundred seventy-one-e of this  [chap-
ter]  ARTICLE,  (iii)  and except further that, notwithstanding any law,
the comptroller shall credit to the revenue arrearage account,  pursuant
to  section  ninety-one-a of the state finance law, that amount of over-
payment of tax imposed by  article  nine,  nine-A,  twenty-two,  thirty,
thirty-A,  thirty-B[,  thirty-two]  or thirty-three of this chapter, and
any interest thereon, which is  certified  to  the  comptroller  by  the
commissioner  as  the  amount  to be credited against a past-due legally
enforceable debt owed to a state agency pursuant  to  paragraph  (a)  of
subdivision  six  of  section one hundred seventy-one-f of this article,
provided, however, he shall  credit  to  the  special  offset  fiduciary
account,  pursuant to section ninety-one-c of the state finance law, any
such amount creditable as a liability as set forth in paragraph  (b)  of
subdivision  six  of  section one hundred seventy-one-f of this article,
(iv) and except further that the comptroller shall pay to  the  city  of
New  York  that  amount  of  overpayment of tax imposed by article nine,
nine-A, twenty-two, thirty, thirty-A, thirty-B[, thirty-two,]  or  thir-
ty-three  of  this chapter and any interest thereon that is certified to
the comptroller by the commissioner as the amount to be credited against
city of New York tax warrant  judgment  debt  pursuant  to  section  one
hundred  seventy-one-l  of this article, (v) and except further that the
comptroller shall pay to a non-obligated spouse that amount of  overpay-
ment of tax imposed by article twenty-two of this chapter and the inter-
est  on  such  amount  which  has  been credited pursuant to section one
hundred seventy-one-c, one hundred seventy-one-d, one  hundred  seventy-
one-e,  one  hundred  seventy-one-f or one hundred seventy-one-l of this
article and which is certified to the comptroller by the commissioner as
the amount due such non-obligated spouse pursuant to  paragraph  six  of
subsection  (b)  of  section  six hundred fifty-one of this chapter; and
(vi) the comptroller shall deduct a like amount  which  the  comptroller
shall  pay  into  the  treasury  to  the credit of the general fund from
amounts subsequently payable to the department of social  services,  the
state  university  of  New York, the city university of New York, or the
higher education services corporation, or the revenue arrearage  account
or  special offset fiduciary account pursuant to section ninety-one-a or
ninety-one-c of the state finance law, as the case may be, whichever had
been credited the amount originally withheld from such overpayment,  and
(vii)  with respect to amounts originally withheld from such overpayment
pursuant to section one hundred seventy-one-l of this article  and  paid
to  the  city  of  New York, the comptroller shall collect a like amount
from the city of New York.
  S 55. Subdivision 2 of section 171-a of the tax  law,  as  amended  by
chapter 57 of the laws of 1993, is amended to read as follows:

S. 6359                            128                           A. 8559

  2.  Notwithstanding  subdivision  one  of  this  section  or any other
provision of law to the contrary, the taxes imposed pursuant to sections
one hundred eighty-three-a,  one  hundred  eighty-four-a,  [one  hundred
eighty-six-b,]  one  hundred  eighty-six-c, [one hundred eighty-nine-a,]
two  hundred nine-B[, fourteen hundred fifty-five-b] and fifteen hundred
five-a of this chapter, reduced by an amount for  administrative  costs,
shall be deposited to the credit of the metropolitan mass transportation
operating  assistance  account  in  the  mass  transportation  operating
assistance fund, created pursuant to section eighty-eight-a of the state
finance law, as such taxes are received. The amount  for  administrative
costs  shall  be  determined by the commissioner to represent reasonable
costs of the  department  of  taxation  and  finance  in  administering,
collecting, determining and distributing such taxes. Of the total reven-
ue  collected or received under such sections of this chapter, the comp-
troller shall retain in his hands such amount as  the  commissioner  may
determine  to  be  necessary  for  refunds  or reimbursements under such
sections of this chapter out of which amount the comptroller  shall  pay
any refunds or reimbursements to which taxpayers shall be entitled under
provisions  of  such  sections. The tax commissioner and the comptroller
shall maintain a system  of  accounts  showing  the  amount  of  revenue
collected or received from each of the taxes imposed by such sections.
  S  56. Paragraphs (b) and (c) of subdivision 1 of section 171-f of the
tax law, as amended by chapter 81 of the laws of 1995,  are  amended  to
read as follows:
  (b)  "taxpayer"  shall mean a corporation, association, company, part-
nership, estate, trust, liquidator, fiduciary or other entity  or  indi-
vidual who or which is liable for any tax or other imposition imposed by
or pursuant to article nine, nine-A, twenty-two, thirty, thirty-A, thir-
ty-B[,  thirty-two,] or thirty-three of this chapter or article two-E of
the general city law, which tax or other imposition is  administered  by
the  commissioner  of  taxation  and finance, or who or which is under a
duty to perform an act under or pursuant  to  such  tax  or  imposition,
excluding  a  state agency, a municipal corporation or a district corpo-
ration; and (c) "overpayment" shall mean an overpayment which  has  been
requested  or determined to be refunded, a refund or a reimbursement, of
a tax or other imposition  imposed  by  or  pursuant  to  article  nine,
nine-A,  twenty-two,  thirty, thirty-A, thirty-B[, thirty-two,] or thir-
ty-three of this chapter or article two-E of the general city law, which
is administered by the commissioner of taxation and finance.
  S 57. Subdivision 2 of section 171-f of the tax law, as added by chap-
ter 55 of the laws of 1992, is amended to read as follows:
  (2) The commissioner of taxation and finance, upon agreement with  the
state  comptroller  and  acting  as  an agent for the state comptroller,
shall set forth the  procedures  for  crediting  any  overpayment  by  a
taxpayer  of  any tax or other imposition imposed by or authorized to be
imposed pursuant to article nine, nine-A, twenty-two, thirty,  thirty-A,
thirty-B[, thirty-two,] or thirty-three of this chapter or article two-E
of  the  general  city law, which is administered by the commissioner of
taxation and finance, and the interest on any such overpayments, against
the amount of a past-due legally enforceable debt owed by such  taxpayer
to  a  state  agency.  An  implementation plan shall be developed by the
division of the budget and the department of taxation and finance  which
shall  provide,  but not be limited to, guidance with respect to coordi-
nation of debt collection pursuant to this section and subdivision twen-
ty-seventh of section one hundred  seventy-one  of  this  article.  This
section  shall  not be deemed to abrogate or limit in any way the powers

S. 6359                            129                           A. 8559

and authority of the state comptroller to set off debts owed  the  state
against  payments from the state, under the constitution of the state or
any other law.
  S  58. Paragraphs (a) and (b) of subdivision 1 of section 171-l of the
tax law, as added by section 6 of part R of chapter 60 of  the  laws  of
2004, are amended to read as follows:
  (a)  "taxpayer"  shall mean a corporation, association, company, part-
nership, estate, trust, liquidator, fiduciary or other entity  or  indi-
vidual who or which is liable for any tax or other imposition imposed by
or pursuant to article nine, nine-A, twenty-two, thirty, thirty-A, thir-
ty-B[,  thirty-two,] or thirty-three of this chapter, which tax or other
imposition is administered by the commissioner of taxation and  finance,
or  who  or which is under a duty to perform an act under or pursuant to
such tax or imposition, excluding a state  agency,  a  municipal  corpo-
ration or a district corporation;
  (b)  "overpayment"  shall mean an overpayment which has been requested
or determined to be refunded, a refund or a reimbursement, of a  tax  or
other  imposition  imposed by or pursuant to article nine, nine-A, twen-
ty-two, thirty, thirty-A, thirty-B[,  thirty-two,]  or  thirty-three  of
this  chapter, which is administered by the commissioner of taxation and
finance; and
  S 59. Paragraph (b) of subdivision 1 of section 183 of the tax law, as
amended by section 1 of part Y of chapter 63 of the  laws  of  2000,  is
amended to read as follows:
  (b)  For  the  privilege  of exercising its corporate franchise, or of
doing business, or of employing capital, or of owning or leasing proper-
ty in this state in a corporate or organized capacity, or of maintaining
an office in this state, every domestic corporation, joint-stock company
or association formed for or  principally  engaged  in  the  conduct  of
canal, steamboat, ferry (except a ferry company operating between any of
the boroughs of the city of New York under a lease granted by the city),
express,  navigation,  pipe  line,  transfer,  baggage express, omnibus,
taxicab, telegraph, or telephone business, or formed for or  principally
engaged  in  the  conduct  of  two or more of such businesses, and every
domestic corporation, joint-stock company or association formed  for  or
principally  engaged  in the conduct of a railroad, palace car, sleeping
car or trucking business or formed for or  principally  engaged  in  the
conduct of two or more of such businesses and which has made an election
pursuant  to  subdivision  ten of this section, and every other domestic
corporation, joint-stock company or association principally  engaged  in
the  conduct  of  a  transportation  or  transmission business, except a
corporation, joint-stock company or association formed for or principal-
ly engaged in the conduct of a railroad, palace  car,  sleeping  car  or
trucking business or formed for or principally engaged in the conduct of
two  or  more  of  such  businesses  and which has not made the election
provided for in subdivision ten of this section,  and  except  a  corpo-
ration,  joint-stock  company  or association principally engaged in the
conduct of aviation (including air freight forwarders acting as  princi-
pal and like indirect air carriers) and except a corporation principally
engaged  in  providing  telecommunication  services between aircraft and
dispatcher, aircraft and air  traffic  control  or  ground  station  and
ground  station  (or  any combination of the foregoing), at least ninety
percent of the voting stock of which corporation is owned,  directly  or
indirectly,  by  air carriers and which corporation's principal function
is to fulfill the requirements of  (i)  the  federal  aviation  adminis-
tration  (or  the  successor  thereto)  or  (ii) the international civil

S. 6359                            130                           A. 8559

aviation organization (or the successor thereto), relating to the exist-
ence of a communication system between aircraft and dispatcher, aircraft
and air traffic control or ground station and  ground  station  (or  any
combination of the foregoing) for the purposes of air safety and naviga-
tion  [and  except  a  corporation,  joint-stock  company or association
subject to taxation under article thirty-two  of  this  chapter,]  shall
pay,  in  advance,  an  annual  tax to be computed upon the basis of the
amount of its capital stock within this state during the preceding year,
and upon each dollar of such amount. Provided, however,  a  corporation,
joint-stock  company or association formed for or principally engaged in
the transportation, transmission or distribution of gas, electricity  or
steam  shall  not  be  subject  to tax under this section or section one
hundred eighty-four of this article.
  S 60. Subdivision 10 of section 183 of the tax law, as added by  chap-
ter 309 of the laws of 1996, is amended to read as follows:
  10.  Election. [With respect to taxable years beginning after nineteen
hundred ninety-seven, every] EVERY corporation, joint-stock  company  or
association  formed for or principally engaged in the conduct of a rail-
road (including surface railroad, whether  or  not  operated  by  steam,
subway  railroad  or  elevated  railroad),  palace  car, sleeping car or
trucking business or formed for or principally engaged in the conduct of
two or more of such businesses, which would be subject to article nine-A
[or thirty-two] of this chapter if the election provided for under  this
subdivision  were not made, may elect to be subject to the provisions of
this section and, as applicable, section one hundred eighty-four of this
article, rather than the provisions of such article nine-A  [or  thirty-
two]. [In the case of such a corporation, joint-stock company or associ-
ation  subject to the tax imposed under this section and, as applicable,
section one hundred eighty-four of this article, for  the  taxable  year
ending December thirty-first, nineteen hundred ninety-seven, such corpo-
ration, joint-stock company or association must make such election on or
before March fifteenth, nineteen hundred ninety-eight, and such election
shall  apply  to the taxable year ending on December thirty-first, nine-
teen  hundred  ninety-eight  and  to  succeeding  taxable  years,  until
revoked. In the case of such a corporation, joint-stock company or asso-
ciation  which is not subject to the tax imposed under this section and,
as applicable, section one hundred eighty-four of this article  for  the
taxable  year ending December thirty-first, nineteen hundred ninety-sev-
en, but thereafter would be subject to article nine-A or  thirty-two  of
this  chapter  if  the election provided for under this subdivision were
not made, such] SUCH corporation,  joint-stock  company  or  association
must  make  such  election  by  the first day on which such corporation,
joint-stock company or association would be required to file a return or
report (without regard to extensions) under this section or section  one
hundred  eighty-four  of  this  article,  or section one hundred eighty-
three-a or one  hundred[-]eighty-four-a  of  this  article,  or  article
nine-A  [or  thirty-two]  of  this chapter. An election made pursuant to
this subdivision shall continue to be in effect  until  revoked  by  the
taxpayer.  A  revocation  of  the election to be subject to this section
and, as applicable, section one hundred  eighty-four  of  this  article,
shall  be irrevocable. Such election, and a revocation thereof, shall be
made in the manner prescribed by the commissioner, whether by regulation
or otherwise. Such revocation shall apply as of the first day of January
next following the end of a taxable  year  with  respect  to  which  the
taxpayer  had  been  subject to this section and, as applicable, section

S. 6359                            131                           A. 8559

one hundred eighty-four of this article, by reason of an  election  made
pursuant to this subdivision.
  S 61. The section heading and subdivisions 1 and 5 of section 183-a of
the  tax law, the section heading as added by chapter 931 of the laws of
1982, subdivision 1 as amended by section 1 of part A of chapter  59  of
the laws of 2013 and subdivision 5 as amended by chapter 945 of the laws
of 1990, are amended to read as follows:
  [Temporary  metropolitan]  METROPOLITAN  transportation  business  tax
surcharge on transportation and transmission  corporations  and  associ-
ations.  1. The term "corporation" as used in this section shall include
an  association, within the meaning of paragraph three of subsection (a)
of section seventy-seven  hundred  one  of  the  internal  revenue  code
(including  a  limited liability company), a publicly traded partnership
treated as a corporation for  purposes  of  the  internal  revenue  code
pursuant  to section seventy-seven hundred four thereof and any business
conducted by a trustee or trustees  wherein  interest  or  ownership  is
evidenced  by  certificates  or  other written instruments. Every corpo-
ration, joint-stock company or association  formed  for  or  principally
engaged in the conduct of canal, steamboat, ferry (except a ferry compa-
ny operating between any of the boroughs of the city of New York under a
lease  granted  by  the city), express, navigation, pipe line, transfer,
baggage express, omnibus, taxicab, telegraph, or telephone business,  or
formed  for  or  principally  engaged in the conduct of two or more such
businesses, and every corporation, joint-stock  company  or  association
formed  for  or principally engaged in the conduct of a railroad, palace
car, sleeping car or trucking business  or  formed  for  or  principally
engaged  in  the conduct of two or more of such businesses and which has
made an election pursuant to subdivision  ten  of  section  one  hundred
eighty-three  of  this article, and every other corporation, joint-stock
company or association principally engaged in the conduct of a transpor-
tation or  transmission  business,  except  a  corporation,  joint-stock
company  or association formed for or principally engaged in the conduct
of a railroad, palace car, sleeping car or trucking business  or  formed
for  or  principally engaged in the conduct of two or more of such busi-
nesses and which has not made the election provided for  in  subdivision
ten  of  section  one hundred eighty-three of this article, and except a
corporation, joint-stock company or association principally  engaged  in
the  conduct  of  aviation  (including  air freight forwarders acting as
principal and like indirect air carriers) and except a corporation prin-
cipally engaged in providing telecommunication services between aircraft
and dispatcher, aircraft and air traffic control or ground  station  and
ground  station  (or  any combination of the foregoing), at least ninety
percent of the voting stock of which corporation is owned,  directly  or
indirectly,  by  air carriers and which corporation's principal function
is to fulfill the requirements of  (i)  the  federal  aviation  adminis-
tration  (or  the  successor  thereto)  or  (ii) the international civil
aviation organization (or the successor thereto), relating to the exist-
ence of a communication system between aircraft and dispatcher, aircraft
and air traffic control or ground station and  ground  station  (or  any
combination of the foregoing) for the purposes of air safety and naviga-
tion [and except a corporation, joint-stock company or association which
is  liable  to taxation under article thirty-two of this chapter], shall
pay for the privilege of exercising its corporate franchise, or of doing
business, or of employing capital, or of owning or leasing  property  in
the  metropolitan  commuter transportation district in such corporate or
organized capacity, or of maintaining an office in such district, a  tax

S. 6359                            132                           A. 8559

surcharge [for all or any part of its years commencing on or after Janu-
ary  first, nineteen hundred eighty-two but ending before December thir-
ty-first, two thousand eighteen], which tax surcharge,  in  addition  to
the  tax  imposed  by  section one hundred eighty-three of this article,
shall be computed at the rate of [eighteen percent of  the  tax  imposed
under  such  section one hundred eighty-three for such years or any part
of such years ending  before  December  thirty-first,  nineteen  hundred
eighty-three  after  the  deduction  of  any credits otherwise allowable
under this article, and at the rate of] seventeen  percent  of  the  tax
imposed  under  such  section  for  such years or any part of such years
[ending on or after  December  thirty-first,  nineteen  hundred  eighty-
three] after the deduction of any credits otherwise allowable under this
article;  provided,  however,  that such rates of tax surcharge shall be
applied only to that portion  of  the  tax  imposed  under  section  one
hundred  eighty-three of this article after the deduction of any credits
otherwise allowable under this article  which  is  attributable  to  the
taxpayer's business activity carried on within the metropolitan commuter
transportation district as so determined in the manner prescribed by the
rules  and  regulations  promulgated by the commissioner[; and provided,
further, that the tax surcharge imposed by this  section  shall  not  be
imposed upon any taxpayer for more than four hundred thirty-two months].
  5.  [The  report  covering  the tax surcharge which must be calculated
pursuant to this section based upon the tax reportable on the report due
by March  fifteenth,  nineteen  hundred  eighty-two  under  section  one
hundred  eighty-three  of this article shall be filed on or before March
fifteenth, nineteen hundred eighty-three. The report  covering  the  tax
surcharge  which  must be calculated pursuant to this section based upon
the tax reportable on  the  report  due  by  March  fifteenth,  nineteen
hundred  eighty-three  under  section  one  hundred eighty-three of this
article shall be filed on or before March  fifteenth,  nineteen  hundred
eighty-four.  The report covering the tax surcharge which must be calcu-
lated pursuant to this section based upon  the  tax  reportable  on  the
report  due  by  March  fifteenth,  nineteen  hundred  eighty-four under
section one hundred eighty-three of this article shall be  filed  on  or
before  March fifteenth, nineteen hundred eighty-five. The report cover-
ing the tax surcharge which must be calculated pursuant to this  section
based  upon  the  tax  reportable  on the report due by March fifteenth,
nineteen hundred eighty-five under section one hundred  eighty-three  of
this  article  shall  be  filed  on  or before March fifteenth, nineteen
hundred eighty-six. The report covering the tax surcharge which must  be
calculated pursuant to this section based upon the tax reportable on the
report due by March fifteenth, nineteen hundred eighty-six under section
one  hundred  eighty-three  of  this article shall be filed on or before
March fifteenth, nineteen hundred eighty-seven. The report covering  the
tax  surcharge  which  must be calculated pursuant to this section based
upon the tax reportable on the report due by March  fifteenth,  nineteen
hundred  eighty-seven  under  section  one  hundred eighty-three of this
article shall be filed on or before March  fifteenth,  nineteen  hundred
eighty-eight. The report covering the tax surcharge which must be calcu-
lated  pursuant  to  this  section  based upon the tax reportable on the
report due by  March  fifteenth,  nineteen  hundred  eighty-eight  under
section  one  hundred  eighty-three of this article shall be filed on or
before March fifteenth, nineteen hundred eighty-nine. The report  cover-
ing  the tax surcharge which must be calculated pursuant to this section
based upon the tax reportable on the  report  due  by  March  fifteenth,
nineteen  hundred  eighty-nine under section one hundred eighty-three of

S. 6359                            133                           A. 8559

this article shall be filed  on  or  before  March  fifteenth,  nineteen
hundred  ninety.]  The  report  covering the tax surcharge which must be
calculated pursuant to this section based upon the tax reportable on the
report  due  by  March  fifteenth  of  any  year [subsequent to nineteen
hundred eighty-nine] under section  one  hundred  eighty-three  of  this
article  shall  be  filed  on or before March fifteenth of the year next
succeeding such year. An extension pursuant to section one hundred nine-
ty-three OF THIS ARTICLE shall be allowed only if a taxpayer files  with
the  commissioner  an  application  for  extension  in such form as said
commissioner may prescribe by regulation and pays on or before the  date
of  such  filing  in  addition  to any other amounts required under this
article, either ninety percent of the entire tax surcharge  required  to
be  paid  under this section for the applicable period, or not less than
the tax surcharge shown on the taxpayer's report for the preceding year,
if such preceding year consisted of twelve  months.  The  tax  surcharge
imposed  by this section shall be payable to the commissioner in full at
the time the report is required to be filed, and such tax  surcharge  or
the  balance  thereof,  imposed on any taxpayer which ceases to exercise
its franchise or be subject to the tax surcharge imposed by this section
shall be payable to the commissioner at the time the report is  required
to be filed, provided such tax surcharge of a domestic corporation which
continues to possess its franchise shall be subject to adjustment as the
circumstances  may require; all other tax surcharges of any such taxpay-
er, which pursuant to the foregoing provisions  of  this  section  would
otherwise  be  payable subsequent to the time such report is required to
be filed, shall nevertheless  be  payable  at  such  time.  All  of  the
provisions  of  this article presently applicable to section one hundred
eighty-three of this article are applicable to the tax surcharge imposed
by this section except for section one hundred ninety-two of this  arti-
cle.
  S  62.  Subdivision  1  of  section  184 of the tax law, as amended by
section 2 of part Y of chapter 63 of the laws of  2000,  is  amended  to
read as follows:
  1.  The  term  "corporation"  as used in this section shall include an
association, within the meaning of paragraph three of subsection (a)  of
section  seventy-seven hundred one of the internal revenue code (includ-
ing a limited liability company), a publicly traded partnership  treated
as  a  corporation for purposes of the internal revenue code pursuant to
section seventy-seven hundred four thereof.
  Every corporation, joint-stock company or association  formed  for  or
principally  engaged in the conduct of canal, steamboat, ferry (except a
ferry company operating between any of the boroughs of the city  of  New
York under a lease granted by the city), express, navigation, pipe line,
transfer,  baggage  express,  omnibus, taxicab, telegraph or local tele-
phone business, or formed for or principally engaged in the  conduct  of
two  or  more  of  such  businesses,  and every corporation, joint-stock
company or association formed for or principally engaged in the  conduct
of  surface railroad, whether or not operated by steam, subway railroad,
elevated railroad, palace car, sleeping  car  or  trucking  business  or
formed  for  or  principally  engaged in the conduct of two or more such
businesses and which has made an election pursuant to subdivision ten of
section one hundred eighty-three of this article, and every other corpo-
ration, joint-stock company or association  formed  for  or  principally
engaged  in  the  conduct  of  a transportation or transmission business
(other than a telephone business),  except  a  corporation,  joint-stock
company  or association formed for or principally engaged in the conduct

S. 6359                            134                           A. 8559

of a surface railroad, whether or not operated by  steam,  subway  rail-
road,  elevated  railroad, palace car, sleeping car or trucking business
or formed for or principally engaged in the conduct of two  or  more  of
such  businesses  and  which  has  not made the election provided for in
subdivision ten of section one hundred  eighty-three  of  this  article,
and, except a corporation, joint-stock company or association principal-
ly  engaged in the conduct of aviation (including air freight forwarders
acting as principal and like indirect air carriers) and except a  corpo-
ration  principally  engaged  in  providing  telecommunication  services
between aircraft and dispatcher, aircraft and  air  traffic  control  or
ground station and ground station (or any combination of the foregoing),
at  least  ninety  percent  of  the voting stock of which corporation is
owned, directly or indirectly, by air carriers and  which  corporation's
principal  function  is  to  fulfill the requirements of (i) the federal
aviation administration (or the successor thereto) or (ii) the  interna-
tional  civil aviation organization (or the successor thereto), relating
to  the  existence  of  a  communication  system  between  aircraft  and
dispatcher,  aircraft  and  air  traffic  control  or ground station and
ground station (or any combination of the foregoing) for the purposes of
air safety and navigation and [except a corporation, joint-stock company
or association which is liable to taxation under article  thirty-two  of
this  chapter,] for the privilege of exercising its corporate franchise,
or of doing business, or of employing capital, or of owning  or  leasing
property  in  this  state in a corporate or organized capacity, or main-
taining an office in this state, shall pay a franchise tax  which  shall
be  equal to [(i) three-quarters of one percent for taxable years ending
before two thousand one, provided that for a taxable year ending in  two
thousand  the  rate  shall  be  reduced  to three-eighths of one percent
effective July first, two thousand with the result that for purposes  of
implementation  of  such  change  in rate the applicable rate for such a
year shall be nine-sixteenths of one percent, and (ii)] three-eighths of
one percent for taxable years commencing after two  thousand,  upon  its
gross  earnings  from  all  sources within this state; except that, [for
taxable years commencing on or after  January  first,  nineteen  hundred
eighty-five  and  ending  on  or  before December thirty-first, nineteen
hundred eighty-nine, every corporation, joint-stock company  or  associ-
ation  formed  for or principally engaged in the conduct of telephone or
telegraph business shall pay a franchise tax which  shall  be  equal  to
three-tenths  of one per centum upon its gross earnings from all sources
within this state and,] for taxable years commencing on or after January
first, nineteen hundred ninety, every corporation,  joint-stock  company
or association formed for or principally engaged in the conduct of local
telephone  business,  or  telegraph  business  shall pay a franchise tax
which shall be equal to [(i) three-quarters of one percent  for  taxable
years  ending  before two thousand one, provided that for a taxable year
ending in two thousand the rate shall be reduced to three-eighths of one
percent effective July first, two thousand  with  the  result  that  for
purposes  of  implementation  of such change in rate the applicable rate
for such a year shall be  nine-sixteenths  of  one  percent,  and  (ii)]
three-eighths  of  one  percent  for  taxable years commencing after two
thousand, upon its gross earnings from all sources  within  this  state,
except that a corporation, joint-stock company or association formed for
or  principally  engaged  in  the  conduct of a local telephone business
shall exclude the following earnings (but  not  in  any  event  earnings
derived  by such taxpayer from the provision of carrier access services)
derived by such taxpayer from sales for ultimate consumption of telecom-

S. 6359                            135                           A. 8559

munications service to its customers (i) thirty  percent  of  separately
charged  intra-LATA  toll  service (which shall also include interregion
regional calling plan service) and (ii) one hundred percent of separate-
ly  charged  inter-LATA,  interstate or international telecommunications
service; and except that [corporations, joint-stock companies or associ-
ations formed for or principally engaged in the conduct of surface rail-
road, whether or not operated by steam, subway railroad, elevated  rail-
road,  palace  car  or  sleeping  car, business or any other corporation
formed for or principally engaged in the conduct of a railroad business,
for taxable years prior to nineteen hundred  ninety-seven,  and]  corpo-
rations, joint-stock companies or associations formed for or principally
engaged in the conduct of canal, steamboat, ferry (except a ferry compa-
ny operating between any of the boroughs of the city of New York under a
lease  granted by the city), navigation or any corporation formed for or
principally engaged in the operation of vessels, shall pay  a  franchise
tax  which  shall  be equal to three-quarters of one per centum upon its
gross earnings from all sources within this  state,  excluding  earnings
derived from business of an interstate or foreign character; except that
for  taxable  years beginning in nineteen hundred ninety-seven or there-
after, in the case of a corporation, joint-stock company or  association
which,  with  respect  to taxable years beginning after nineteen hundred
ninety-seven, has made  an  election  pursuant  to  subdivision  ten  of
section one hundred eighty-three of this article and which is formed for
or  principally  engaged  in the conduct of surface railroad, whether or
not operated by steam, subway railroad, elevated railroad,  palace  car,
sleeping  car  or trucking business or formed for or principally engaged
in the conduct of two or more  of  such  businesses,  such  corporation,
joint-stock company or association shall pay a franchise tax which shall
be  equal  to  [(i)  six-tenths  of one percent for taxable years ending
before two thousand one, provided that for a taxable year ending in  two
thousand  the  rate  shall  be  reduced  to three-eighths of one percent
effective July first, two thousand with the result that for purposes  of
implementation  of  such  change  in rate the applicable rate for such a
year shall be thirty-nine eightieths of one percent,  and  (ii)]  three-
eighths  of one percent for taxable years commencing after two thousand,
upon its gross earnings from all sources  within  this  state,  provided
that  in  the  case of a corporation, joint-stock company or association
formed for or principally engaged in the conduct  of  surface  railroad,
whether  or  not  operated by steam, subway railroad, elevated railroad,
palace car or sleeping  car  business,  or  formed  for  or  principally
engaged  in  the  conduct  of two or more of such businesses, such gross
earnings shall not include earnings derived from business of  an  inter-
state or foreign character.
  Provided, however, with respect to railroad, elevated railroad, palace
car  or  sleeping  car  business  or any other corporation formed for or
principally engaged in the conduct of a  railroad  business  and  canal,
steamboat,  ferry  (except  a ferry company operating between any of the
boroughs of the city of New York under a lease  granted  by  the  city),
navigation  or  any corporation formed for or principally engaged in the
operation of vessels where the gross earnings from  such  transportation
business both originating and terminating within this state and travers-
ing  both  this  state  and  another state or states or country shall be
subject to the franchise tax imposed by this section (except where  such
corporation, joint-stock company or association is formed for or princi-
pally  engaged in the conduct of a railroad (including surface railroad,
whether or not operated by steam, subway railroad or elevated railroad),

S. 6359                            136                           A. 8559

palace car or sleeping car business or formed for or principally engaged
in the conduct of two or more of such businesses, and has not  made  the
election  provided  for  under  subdivision  ten  of section one hundred
eighty-three  of  this  article) and such earnings shall be allocated to
this state in the same ratio that the mileage within the state bears  to
the  total  mileage  of such business. Provided, further, a corporation,
joint-stock company or association formed for or principally engaged  in
the  transportation, transmission or distribution of gas, electricity or
steam shall not be subject to tax under  this  section  or  section  one
hundred eighty-three of this article.
  The  term "local telephone business" means the provision or furnishing
of telecommunication services for hire wherein the service furnished  by
the  provider  thereof consists of carrier access service or the service
originates and terminates within the same  local  access  and  transport
area  ("LATA"),  a local access and transport area being that geographic
area as established and approved, and as so set and in existence on July
first, nineteen hundred ninety-four, pursuant  to  the  modification  of
final  judgment  in  United  States  v.  Western Electric Company (civil
action no. 82-0192) in the United States district court for the District
of Columbia or within the LATA-like Rochester non-associated independent
area.
  The term "telecommunication services" shall have the meaning  ascribed
to such term in section one hundred eighty-six-e of this article.
  S  63.  The section heading and the opening paragraph of subdivision 1
of section 184-a of the tax law, the section heading as added by chapter
931 of the laws of 1982 and the opening paragraph of  subdivision  1  as
amended  by  section  2 of part A of chapter 59 of the laws of 2013, are
amended to read as follows:
  Additional  [temporary]  metropolitan  transportation   business   tax
surcharge  on  transportation  and transmission corporations and associ-
ations services.
  The term "corporation" as used in this section shall include an  asso-
ciation,  within  the  meaning  of  paragraph three of subsection (a) of
section seventy-seven hundred one of the internal revenue code  (includ-
ing  a  limited  liability  company),  and a publicly traded partnership
treated as a corporation for  purposes  of  the  internal  revenue  code
pursuant  to  section  seventy-seven hundred four thereof.  Every corpo-
ration, joint-stock company or association  formed  for  or  principally
engaged in the conduct of canal, steamboat, ferry (except a ferry compa-
ny operating between any of the boroughs of the city of New York under a
lease  granted  by  the city), express, navigation, pipe line, transfer,
baggage express, omnibus, taxicab, telegraph or  local  telephone  busi-
ness, or formed for or principally engaged in the conduct of two or more
such  businesses,  and every corporation, joint-stock company or associ-
ation formed for or principally engaged in  the  conduct  of  a  surface
railroad,  whether  or  not operated by steam, subway railroad, elevated
railroad, palace car, sleeping car or trucking business  or  principally
engaged in the conduct of two or more such businesses and which has made
an  election  pursuant to subdivision ten of section one hundred eighty-
three of this article, and every other corporation, joint-stock  company
or  association  formed  for  or principally engaged in the conduct of a
transportation or transmission business (other than  a  telephone  busi-
ness)  except  a  corporation, joint-stock company or association formed
for or principally engaged in the conduct of a surface railroad, whether
or not operated by steam, subway  railroad,  elevated  railroad,  palace
car,  sleeping  car  or  trucking business or principally engaged in the

S. 6359                            137                           A. 8559

conduct of two or more such  businesses  and  which  has  not  made  the
election  provided for in subdivision ten of section one hundred eighty-
three of this article, and except a corporation, joint-stock company  or
association  principally  engaged  in the conduct of aviation (including
air freight forwarders acting as principal and like indirect air  carri-
ers)  and except a corporation principally engaged in providing telecom-
munication services between aircraft and dispatcher,  aircraft  and  air
traffic control or ground station and ground station (or any combination
of  the foregoing), at least ninety percent of the voting stock of which
corporation is owned, directly or indirectly, by air carriers and  which
corporation's  principal  function is to fulfill the requirements of (i)
the federal aviation administration (or the successor thereto)  or  (ii)
the  international  civil aviation organization (or the successor there-
to), relating  to  the  existence  of  a  communication  system  between
aircraft  and  dispatcher,  aircraft  and  air traffic control or ground
station and ground station (or any combination of the foregoing) for the
purposes of air safety and navigation [and except a corporation,  joint-
stock  company  or association which is liable to taxation under article
thirty-two of this chapter], shall pay for the privilege  of  exercising
its  corporate franchise, or of doing business, or of employing capital,
or of owning or leasing property in the metropolitan commuter  transpor-
tation district in such corporate or organized capacity, or of maintain-
ing  an office in such district, a tax surcharge [for all or any part of
its taxable years commencing on or after January first, nineteen hundred
eighty-two, but ending before December thirty-first, two thousand  eigh-
teen],  which  tax  surcharge, in addition to the tax imposed by section
one hundred eighty-four of this article, shall be computed at  the  rate
of  [eighteen  percent of the tax imposed under such section one hundred
eighty-four for such taxable years or any part  of  such  taxable  years
ending before December thirty-first, nineteen hundred eighty-three after
the deduction of any credits otherwise allowable under this article, and
at  the rate of] seventeen percent of the tax imposed under such section
for such taxable years or any part of such taxable years [ending  on  or
after  December  thirty-first,  nineteen hundred eighty-three] after the
deduction  of  any  credits  otherwise  allowable  under  this  article;
provided,  however,  that  such  rates of tax surcharge shall be applied
only to that portion of the tax imposed under section one hundred eight-
y-four of this article after the  deduction  of  any  credits  otherwise
allowable  under  this  article  which is attributable to the taxpayer's
business activity carried on within the metropolitan commuter  transpor-
tation  district[; and provided, further, that the tax surcharge imposed
by this section on corporations, joint-stock companies and  associations
formed  for  or principally engaged in the conduct of telephone or tele-
graph business shall be computed in accordance with this subdivision and
paragraph (c) of subdivision two of this section as if  the  three-quar-
ters  of  one  percent  rate  of  tax provided for in subdivision one of
section one hundred eighty-four of this article were applicable to  such
telephone  and  telegraph  businesses for taxable years commencing on or
after January first, nineteen  hundred  eighty-five  and  ending  on  or
before   December   thirty-first,   nineteen  hundred  eighty-nine;  and
provided, further, that the tax surcharge imposed by this section  shall
not  be  imposed upon any taxpayer for more than four hundred thirty-two
months].  Provided, however, that for taxable  years  beginning  in  two
thousand  and  thereafter,  for  purposes  of  this  subdivision the tax
imposed under section one hundred eighty-four of this article  shall  be
deemed  to  have  been  imposed  at  the  rate  of three-quarters of one

S. 6359                            138                           A. 8559

percent, except that in the case of a corporation,  joint-stock  company
or association which has made an election pursuant to subdivision ten of
section  one  hundred eighty-three of this article, for purposes of this
subdivision  the  tax  imposed  under section one hundred eighty-four of
this article shall be deemed to have been imposed at the  rate  of  six-
tenths of one percent.
  S 64. Subdivision 8 of section 186-a of the tax law is REPEALED.
  S  65.   The section heading and subdivision 1 of section 186-c of the
tax law, the section heading as amended by chapter  2  of  the  laws  of
1995,  subdivision  1 as amended by section 3 of part II-1 of chapter 57
of the laws of 2008, subparagraph 1 of paragraph (a) of subdivision 1 as
amended by section 3 of part A of chapter 59 f the  laws  of  2013,  are
amended to read as follows:
  [Temporary  metropolitan]  METROPOLITAN  transportation  business  tax
surcharge on utility services and excise tax  on  sale  of  telecommuni-
cation  services.  1. (a) (1) Every utility doing business in the metro-
politan commuter transportation district shall pay a tax  surcharge,  in
addition  to the tax imposed by section one hundred eighty-six-a of this
article[, for all or any parts of its taxable  years  commencing  on  or
after  January  first,  nineteen  hundred  eighty-two  but ending before
December thirty-first, two thousand eighteen], to be  computed  [at  the
rate  of  eighteen  percent of the tax imposed under section one hundred
eighty-six-a of this article for such taxable years or any part of  such
taxable  years  ending  before  December  thirty-first, nineteen hundred
eighty-three after the deduction  of  any  credits  otherwise  allowable
under  this  article,  and]  at the rate of seventeen percent of the tax
imposed under such section [for such taxable years or any part  of  such
taxable years ending on or after December thirty-first, nineteen hundred
eighty-three]  after  the deduction of credits otherwise allowable under
this article except any utility credit provided  for  by  article  thir-
teen-A  of  this  chapter;  provided,  however,  that  such rates of tax
surcharge shall be applied only to that portion of the tax imposed under
section one hundred eighty-six-a of this article after the deduction  of
credits otherwise allowable under this article, except any utility cred-
it  provided for by article thirteen-A of this chapter, which is attrib-
utable to the taxpayer's gross income or  gross  operating  income  from
business  activity carried on within the metropolitan commuter transpor-
tation district[; and provided, further, that the tax surcharge  imposed
by  this  section  shall  not be imposed upon any taxpayer for more than
four hundred thirty-two months].
  (2) Provided however, that [commencing January first,  two  thousand,]
in the case of the tax imposed under paragraph (a) of subdivision one of
section  one hundred eighty-six-a of this article (relating to providers
of telecommunications services) such tax surcharge shall  be  calculated
as  if  the  tax  imposed under section one hundred eighty-six-a of this
article were imposed at a rate of three and one-half percent.
  (b) In addition to the surcharge imposed  by  paragraph  (a)  of  this
subdivision,  there  is hereby imposed a surcharge on the gross receipts
from telecommunication services relating to  the  metropolitan  commuter
transportation  district  at  the rate of seventeen percent of the state
tax rate under section one hundred eighty-six-e of this article [for all
or part of taxable years commencing on and after January first, nineteen
hundred ninety-five but ending before December thirty-first,  two  thou-
sand  thirteen]. All the definitions and other provisions of section one
hundred eighty-six-e of this article shall apply to the tax  imposed  by
this paragraph with such modification and limitation as may be necessary

S. 6359                            139                           A. 8559

(including  substituting the words "metropolitan commuter transportation
district" for "state" where appropriate) in order to adapt the  language
of  such  section  one  hundred  eighty-six-e  of  this  article  to the
surcharge  imposed  by  this paragraph within such metropolitan commuter
transportation district so as to include (1) any intra-district telecom-
munication services, except any  telecommunication  services  the  gross
receipts  from  which are subject to tax under subparagraph four of this
paragraph, (2) any inter-district telecommunication services which orig-
inate or terminate in such district and are charged to a service address
therein regardless of where the amounts charged for  such  services  are
billed  or  ultimately  paid, except any telecommunications services the
gross receipts from which are subject to tax under subparagraph four  of
this  paragraph, (3) as apportioned to such district, private telecommu-
nication services,  except  any  telecommunication  services  the  gross
receipts  from  which are subject to tax under subparagraph four of this
paragraph, and (4) mobile telecommunications service provided by a  home
service provider where the place of primary use is within such metropol-
itan  commuter  transportation  district.  Provided however, [commencing
October first, nineteen hundred ninety-eight] such tax  surcharge  shall
be  calculated  as  if the tax imposed under section one hundred eighty-
six-e of this article were imposed at  a  rate  of  three  and  one-half
percent.
  S  66.  Clause  (iii) of subparagraph (D) of paragraph 3 of subsection
(b) of section 605 of the tax law, as added by chapter 658 of  the  laws
of 2003, is amended to read as follows:
  (iii)  Provided  further,  that for the purposes of item (I) of clause
(i) of this subparagraph, a trustee which is a  banking  corporation  as
defined  in subsection (a) of section fourteen hundred fifty-two of this
chapter, AS SUCH SECTION WAS IN EFFECT  ON  DECEMBER  THIRTY-FIRST,  TWO
THOUSAND  FOURTEEN, and which is domiciled outside the state of New York
at the time it becomes a trustee of the trust shall be deemed to contin-
ue to be a trustee domiciled outside the state of New York notwithstand-
ing that it thereafter otherwise becomes  a  trustee  domiciled  in  the
state  of New York by virtue of being acquired by, or becoming an office
or branch of, a corporate trustee domiciled  within  the  state  of  New
York.
  S  67.  Subparagraph  (A) of paragraph 10 of subsection (a) of section
606 of the tax law, as amended by section 3 of part CC of chapter 85  of
the laws of 2002, is amended to read as follows:
  (A)  the business of which the individual is an owner is substantially
similar in operation and in ownership to a business entity  taxable,  or
previously  taxable, under section one hundred eighty-three, one hundred
eighty-four[,] OR one hundred eighty-five [or one hundred eighty-six] of
article nine; article nine-A[, thirty-two] or thirty-three of this chap-
ter; article twenty-three of this  chapter  or  which  would  have  been
subject  to  tax under such article twenty-three (as such article was in
effect on January first, nineteen hundred eighty), ARTICLE THIRTY-TWO OF
THIS CHAPTER OR WHICH WOULD HAVE BEEN SUBJECT TO TAX UNDER SUCH  ARTICLE
THIRTY-TWO  (AS SUCH ARTICLE WAS IN EFFECT ON DECEMBER THIRTY-FIRST, TWO
THOUSAND FOURTEEN) or the income  (or  losses)  of  which  is  (or  was)
includable  under  article twenty-two of this chapter whereby the intent
and purpose of this paragraph and paragraph five of this subsection with
respect to refunding of credit to new business would be evaded; or
  S 68. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
of the tax law, as amended by section 7 of part C-1 of chapter 57 of the
laws of 2009, clause (ix) as amended by section 4 of part G  of  chapter

S. 6359                            140                           A. 8559

59  of  the laws of 2013, clause (xxxi) as added by section 5 of part MM
of chapter 59 of the laws of 2010, clause (xxxi) as added by section  14
of  part Q of chapter 57 of the laws of 2010, clause (xxxii) as added by
section  6  of part V of chapter 61 of the laws of 2011, clause (xxxiii)
as added by section 4 of part D of chapter  56  of  the  laws  of  2011,
clause  (xxxiii)  as  added  by section 5 of part E of chapter 56 of the
laws of 2011, clause (xxxiii) as added by chapter 604  of  the  laws  of
2011, clause (xxxiv) as added by chapter 109 of the laws of 2012, clause
(xxxv)  as  added  by  section 2 of part AA of chapter 59 of the laws of
2013, clause (xxxv) as added by section 4 of part EE of  chapter  59  of
the  laws  of 2013 and clause (xxxvi) as added by section 8 of part A of
chapter 68 of the laws of 2013, clause (xxxvii) as added by section 3 of
LBD number 74021-03-4, and clause (xxxvii) as added by section 5 of  LBD
number 74039-02-4, is amended to read as follows:
  (B)  shall  be  treated as the owner of a new business with respect to
such share if the corporation qualifies as a new  business  pursuant  to
paragraph  [(j)]  (F) of subdivision [twelve] ONE of section two hundred
[ten] TEN-B of this chapter.

With respect to the following        The corporation's credit base under
credit under this section:           section two hundred [ten or section
                                     fourteen hundred fifty-six] TEN-B
                                     of this chapter is:

(i) Investment tax credit under      Investment credit base or qualified
subsection (a)                       rehabilitation expenditures under
                                     subdivision [twelve] ONE of section
                                     two hundred [ten] TEN-B

(ii) Empire zone investment          Cost or other basis under
tax credit under subsection (j)      subdivision [twelve-B] THREE
                                     of section two hundred [ten] TEN-B

[(iii) Empire zone wage tax credit   Eligible wages under subdivision
under subsection (k)                 nineteen of section two hundred
                                     ten or subsection (e) of section
                                     fourteen hundred fifty-six

(iv) Empire zone capital tax         Qualified investments and
credit under subsection (l)          contributions under subdivision
                                     twenty of section two hundred ten
                                     or subsection (d) of section
                                     fourteen hundred fifty-six]

(v) Agricultural property tax        Allowable school district property
credit under subsection (n)          taxes under subdivision
                                     [twenty-two] ELEVEN of
                                     section two hundred [ten]
                                     TEN-B

(vi) Credit for employment of        Qualified first-year wages or
persons with disabilities            qualified second-year wages under
under subsection (o)                 subdivision [twenty-three] TWELVE
                                     of section two hundred [ten or
                                     subsection (f) of section
                                     fourteen hundred fifty-six] TEN-B

S. 6359                            141                           A. 8559

(vii) Employment incentive credit    Applicable investment credit base
under subsection (a-1)               under subdivision [twelve-D] TWO
                                     of section two hundred [ten]
                                     TEN-B

(viii) Empire zone employment        Applicable investment credit
incentive credit under subsection    under subdivision [twelve-C]
(j-1)                                FOUR of section
                                     two hundred [ten] TEN-B

(ix) Alternative fuels               Amount of credit under subdivision
and electric vehicle                 [twenty-four] THIRTY of section
recharging property                  two hundred [ten] TEN-B
credit under subsection (p)

(x) Qualified emerging technology    Applicable credit base under
company employment credit under      subdivision [twelve-E] SEVEN
subsection (q)                       of section two hundred [ten] TEN-B

(xi) Qualified emerging technology   Qualified investments under
company capital tax credit under     subdivision [twelve-F] EIGHT
subsection (r)                       of section two hundred [ten] TEN-B

(xii) Credit for purchase of an      Cost of an automated external
automated external defibrillator     defibrillator under subdivision
under subsection (s)                 [twenty-five] THIRTEEN of section
                                     two hundred [ten or subsection
                                     (j) of section fourteen hundred
                                     fifty-six] TEN-B

(xiii) Low-income housing credit     Credit amount under subdivision
under subsection (x)                 [thirty] FIFTEEN of section
                                     two hundred [ten or subsection
                                     (l) of section fourteen
                                     hundred fifty-six] TEN-B

[(xiv) Credit for transportation     For taxable years beginning
improvement contributions under      before January first, two thousand
subsection (z)                       nine, amount of credit under
                                     subdivision thirty-two of
                                     section two hundred ten
                                     or subsection (n) of section
                                     fourteen hundred fifty-six]

(xv) QEZE credit for real property   Amount of credit under subdivision
taxes under subsection (bb)          [twenty-seven] FIVE of
                                     section two hundred [ten
                                     or subsection (o) of section
                                     fourteen hundred fifty-six]
                                     TEN-B

(xvi) QEZE tax reduction credit      Amount of benefit period factor,
under subsection (cc)                employment increase factor and zone
                                     allocation factor (without regard
                                     to pro ration) under subdivision
                                     [twenty-eight] SIX of

S. 6359                            142                           A. 8559

                                     section two hundred [ten
                                     or subsection (p) of section
                                     fourteen hundred fifty-six]
                                     TEN-B and amount
                                     of tax factor as determined under
                                     subdivision (f) of section sixteen

(xvii) Green building credit under   Amount of green building credit
subsection (y)                       under subdivision [thirty-one]
                                     SIXTEEN of section two
                                     hundred [ten or subsection (m)
                                     of section fourteen hundred
                                     fifty-six] TEN-B

(xviii) Credit for long-term care    Qualified costs under subdivision
insurance premiums under subsection  [twenty-five-a] FOURTEEN
(aa)                                 of section two hundred [ten
                                     or subsection (k) of
                                     section fourteen hundred fifty-six]
                                     TEN-B

(xix) Brownfield redevelopment       Amount of credit under subdivision
credit under subsection (dd)         [thirty-three] SEVENTEEN
                                     of section two hundred
                                     [ten or subsection (q) of section
                                     fourteen hundred fifty-six]
                                     TEN-B

(xx) Remediated brownfield credit    Amount of credit under subdivision
for real property taxes for          [thirty-four] EIGHTEEN
qualified sites under subsection     of section two hundred
(ee)                                 [ten of subsection (r) of section
                                     fourteen hundred fifty-six]
                                     TEN-B

(xxi) Environmental remediation      Amount of credit under subdivision
insurance credit under subsection    [thirty-five] NINETEEN
(ff)                                 of section two hundred
                                     [ten or subsection (s) of section
                                     fourteen hundred fifty-six]
                                     TEN-B

(xxii) Empire state film             Amount of credit for qualified
production credit under              production costs in production of a
subsection (gg)                      qualified film under subdivision
                                     [thirty-six] TWENTY of
                                     section two hundred [ten] TEN-B

[(xxiii) Qualified emerging          Qualifying expenditures and
technology company facilities,       development activities under
operations and training credit       subdivision twelve-G of section two
under subsection (nn)                hundred ten]

(xxiv) Security training tax credit  Amount of credit under subdivision
under subsection (ii)                [thirty-seven] TWENTY-ONE
                                     of section two hundred

S. 6359                            143                           A. 8559

                                     [ten or under subsection (t) of
                                     section fourteen hundred fifty-six]
                                     TEN-B

[(xxv) Credit for qualified fuel     For taxable years beginning before
cell electric generating             January first, two thousand nine,
equipment expenditures               amount of credit under subdivision
under subsection (g-2)               thirty-seven of section two hundred
                                     ten or subsection (t) of section
                                     fourteen hundred fifty-six]

(xxvi) Empire state commercial       Amount of credit for qualified
production credit under subsection   production costs in production of
(jj)                                 a qualified commercial under
                                     subdivision [thirty-eight]
                                     TWENTY-THREE of
                                     section two hundred [ten]
                                     TEN-B

(xxvii) Biofuel production tax       Amount of credit under subdivision
credit under subsection (jj)         [thirty-eight] TWENTY-FOUR
                                     of section two hundred [ten]
                                     TEN-B

(xxviii) Clean heating fuel credit   Amount of credit under subdivision
under subsection (mm)                [thirty-nine] TWENTY-FIVE of
                                     section two hundred [ten]
                                     TEN-B

(xxix) Credit for rehabilitation     Amount of credit under subdivision
of historic properties under         [forty] TWENTY-SIX of
subsection (oo)                      section two hundred [ten]
                                     TEN-B

 (xxxi) Excelsior jobs program tax   Amount of credit under subdivision
credit under subsection (qq)         [forty-one] THIRTY-ONE of
                                     section two hundred [ten
                                     or under subdivision (u) of
                                     section fourteen hundred fifty-six]
                                     TEN-B

(xxxi) Empire state film             Amount of credit for
post production credit under         qualified post production
subsection (qq)                      costs of a qualified film
                                     under subdivision [forty-one]
                                     THIRTY-TWO of section
                                     two hundred [ten] TEN-B

 (xxxii) Economic transformation     Amount of credit under subdivision
and facility redevelopment credit    [forty-three] THIRTY-FIVE
                                     of section [210 or under
                                     subsection (x) of section fourteen
                                     hundred fifty-six] TWO HUNDRED
                                     TEN-B

 (xxxiii) New York youth works       Amount of credit under

S. 6359                            144                           A. 8559

tax credit                           subdivision [forty-four] THIRTY-SIX
                                     of section two hundred [ten]
                                     TEN-B

 (xxxiii) Empire state jobs          Amount of credit under
retention program credit             subdivision [forty-four]
                                     THIRTY-SEVEN of section
                                     two hundred [ten or under
                                     subsection (y) of section
                                     fourteen hundred fifty-six]
                                     TEN-B

(xxxiii) Credit for companies who    Amount of credit under
provide transportation to            subdivision [forty-four]
individuals with disabilities        THIRTY-EIGHT of section
under subsection (tt)                two hundred [ten] TEN-B

(xxxiv) Beer production credit       Amount of credit under
under subsection (uu)                [subdivision] subdivision
                                     [forty-five] THIRTY-NINE of
                                     section two hundred [ten]
                                     TEN-B

(xxxv) Hire a vet credit             Amount of credit under subdivision
under subsection (a-2)               [twenty-three-a] TWENTY-NINE
                                     of section two hundred [ten
                                     or subsection (e-1) of
                                     of section fourteen hundred
                                     fifty-six] TEN-B

(xxxv) Minimum wage reimbursement    Amount of credit under subdivision
credit under subsection (aaa)        [forty-six] FORTY
                                     of section two hundred
                                     [ten or subsection (z) of
                                     section fourteen hundred
                                     fifty-six] TEN-B

(xxxvi) Tax-free NY area tax         Amount of credit under
elimination credit                   subdivision [forty-seven] FORTY-ONE
                                     of section two hundred [ten]
                                     TEN-B

(xxxvii) Real property tax           Amount of credit under
credit for manufacturers             subdivision [forty-eight]
under subsection (xx)                FORTY-THREE of section
                                     two hundred [ten] TEN-B

(xxxvii) Tax-free NY area            Amount of credit under
excise tax on                        subdivision [forty-eight]
telecommunications services          FORTY-FOUR of section
credit under subsection (xx)         two hundred [ten] TEN-B

  S  69.  Subparagraphs  (A) and (B) of paragraph 3 of subsection (i) of
section 606 of the tax law, as added by chapter 170 of the laws of 1994,
are amended to read as follows:

S. 6359                            145                           A. 8559

  (A) Credit carryover. Any excess  credit  under  subparagraph  (A)  of
paragraph  one of this subsection, as it was in effect for taxable years
beginning before nineteen hundred ninety-four, may be  carried  over  to
the  shareholder's following year or years and may be deducted from such
shareholder's  tax for such year or years, except that any excess credit
attributable to subdivision [twelve] ONE of section  two  hundred  [ten]
TEN-B  of  this chapter shall in no event be carried over beyond the ten
taxable years next following the taxable year of origin.
  (B) Credit recapture. Any redetermination of credit required  by  this
subsection  as it was in effect for taxable years beginning before nine-
teen hundred ninety-four, upon disposition or cessation of qualified use
of property pursuant to paragraph [(g)] (E) of subdivision [twelve] ONE,
OR paragraph (f) of subdivision [twelve-B or paragraph (f)  of  subdivi-
sion  eighteen] THREE of section two hundred [ten] TEN-B of this chapter
shall be attributed in pro rata shares  to  the  shareholders  who  were
allowed  credit under this subsection with respect to such property, and
the reduction of a shareholder's proportionate stock interest  shall  be
treated  as  a  disposition  of  property for which a redetermination of
credit under such paragraphs is required with respect to such sharehold-
er.
  S 70. Subparagraph (B) of paragraph 3 and paragraph 21  of  subsection
(b)  and  paragraph  21 of subsection (c) of section 612 of the tax law,
subparagraph (B) of paragraph 3 of subsection (b) as amended by  section
57,  paragraph  21  of subsection (b) as amended by section 59 and para-
graph 21 of subsection (c) as amended by section 60 of part A of chapter
389 of the laws of 1997, are amended to read as follows:
  (B) Shareholders of S corporations. In the case of a shareholder of an
S corporation, with respect to taxes imposed  upon  or  payable  by  the
corporation,  the  term "income taxes" in subparagraph (A) of this para-
graph shall also include the  taxes  imposed  under  [articles]  ARTICLE
nine-A  [and  thirty-two]  of this chapter, regardless of the measure of
such tax, but shall not otherwise include taxes imposed by this  or  any
other  state  of the United States, or any political subdivision of this
or any other state, or the District of Columbia.
  (21) In relation to the disposition of  stock  or  indebtedness  of  a
corporation  which  elected  under  subchapter  s  of chapter one of the
internal revenue code for any taxable year of  such  corporation  begin-
ning,  in the case of a corporation taxable under article nine-A of this
chapter, after December thirty-first, nineteen hundred eighty,  [and  in
the case of a corporation taxable under article thirty-two of this chap-
ter,  after  December  thirty-first,  nineteen  hundred ninety-six,] the
amount required to be added to federal adjusted gross income pursuant to
subsection (n) of this section.
  (21) In relation to the disposition of  stock  or  indebtedness  of  a
corporation  which  elected  under  subchapter  s  of chapter one of the
internal revenue code for any taxable year of  such  corporation  begin-
ning,  in the case of a corporation taxable under article nine-A of this
chapter, after December thirty-first, nineteen hundred eighty,  [and  in
the case of a corporation taxable under article thirty-two of this chap-
ter,  after  December  thirty-first,  nineteen  hundred ninety-six,] the
amounts required to be subtracted from  federal  adjusted  gross  income
pursuant to subsection (n) of this section.
  S  71. Paragraph 2 of subsection (a) of section 632 of the tax law, as
amended by section 2 of part C of chapter 57 of the  laws  of  2010,  is
amended to read as follows:

S. 6359                            146                           A. 8559

  (2) In determining New York source income of a nonresident shareholder
of an S corporation where the election provided for in subsection (a) of
section  six  hundred sixty of this article is in effect, there shall be
included only the portion derived from or connected with New York sourc-
es  of  such  shareholder's  pro  rata  share  of items of S corporation
income, loss and deduction entering  into  his  federal  adjusted  gross
income,  increased  by  reductions for taxes described in paragraphs two
and three of subsection (f) of section thirteen hundred sixty-six of the
internal revenue code, as such portion shall be determined  under  regu-
lations  of  the commissioner consistent with the applicable methods and
rules for allocation under article nine-A [or thirty-two] of this  chap-
ter,  regardless of whether or not such item or reduction is included in
entire net income under article nine-A [or thirty-two] for the tax year.
If a nonresident is a shareholder in an S corporation where the election
provided for in subsection (a) of section  six  hundred  sixty  of  this
article  is in effect, and the S corporation has distributed an install-
ment obligation under section 453(h)(1)(A) of the Internal Revenue Code,
then any gain recognized on the receipt of payments from the installment
obligation for federal income tax purposes will be treated as  New  York
source income allocated in a manner consistent with the applicable meth-
ods  and  rules  for  allocation under article nine-A [or thirty-two] of
this chapter in the year that the assets were sold. In addition, if  the
shareholders  of  the  S corporation have made an election under section
338(h)(10) of the Internal Revenue Code, then any gain recognized on the
deemed asset sale for federal income tax purposes will be treated as New
York source income allocated in a manner consistent with the  applicable
methods and rules for allocation under article nine-A [or thirty-two] of
this  chapter  in  the  year  that  the  shareholder  made  the  section
338(h)(10) election. For purposes of a section 338(h)(10) election, when
a nonresident shareholder exchanges his or her S  corporation  stock  as
part  of  the  deemed  liquidation, any gain or loss recognized shall be
treated as the disposition of an intangible asset and will not  increase
or  offset  any gain recognized on the deemed assets sale as a result of
the section 338(h)(10) election.
  S 72. Subparagraph (A) of paragraph 4 of subsection (c) of section 658
of the tax law, as amended by section 1 of part DD of chapter 686 of the
laws of 2003, is amended to read as follows:
  (A) General. Every entity which is a partnership, other than a public-
ly traded partnership as defined in section 7704 of the federal Internal
Revenue Code, subchapter K limited liability company or an S corporation
for which the election provided for in subsection  (a)  of  section  six
hundred  sixty  of this [article] PART is in effect, which has partners,
members or shareholders who  are  nonresident  individuals,  as  defined
under  subsection  (b) of section six hundred five of this article, or C
corporations, and which has any income derived from  New  York  sources,
determined  in  accordance  with  the  applicable  rules  of section six
hundred thirty-one of this article as in the case of a nonresident indi-
vidual, shall pay estimated tax on such income on behalf of  such  part-
ners,  members or shareholders in the manner and at the times prescribed
by subsection (c) of section six hundred eighty-five  of  this  article.
For  purposes  of  this paragraph, the term "estimated tax" shall mean a
partner's, member's or shareholder's  distributive  share  or  pro  rata
share  of the entity income derived from New York sources, multiplied by
the highest rate of tax prescribed by section six hundred  one  of  this
article  for  the taxable year of any partner, member or shareholder who
is an individual taxpayer,  or  paragraph  (a)  of  subdivision  one  of

S. 6359                            147                           A. 8559

section  two  hundred  ten  of  this chapter for the taxable year of any
partner, member or shareholder which is a C corporation, whether or  not
such  C corporation is subject to tax under article nine, nine-A[, thir-
ty-two,]  or  thirty-three of this chapter, and reduced by the distribu-
tive share or pro rata share of any credits determined under section one
hundred eighty-seven, one  hundred  eighty-seven-a,  six  hundred  six[,
fourteen  hundred  fifty-six] or fifteen hundred eleven of this chapter,
whichever is applicable, derived from the entity.
  S 73. Subsections  (a)  and  (h)  of  section  660  of  the  tax  law,
subsection (a) as amended by section 50 and subsection (h) as amended by
section  66 of part A of chapter 389 of the laws of 1997, are amended to
read as follows:
  (a) Election. If a corporation  is  an  eligible  S  corporation,  the
shareholders  of  the  corporation  may elect in the manner set forth in
subsection (b) of this section to  take  into  account,  to  the  extent
provided for in this article (or in article thirteen of this chapter, in
the case of a shareholder which is a taxpayer under such article), the S
corporation  items  of  income, loss, deduction and reductions for taxes
described in paragraphs two and three of subsection (f) of section thir-
teen hundred sixty-six of the internal revenue code which are taken into
account for federal  income  tax  purposes  for  the  taxable  year.  No
election  under this subsection shall be effective unless all sharehold-
ers of the corporation have so elected. An eligible S corporation is (i)
an S corporation which is subject to tax under article nine-A [or  thir-
ty-two] of this chapter, OR (ii) an S corporation which is the parent of
a qualified subchapter S subsidiary subject to tax under article nine-A,
where  the  shareholders of such parent corporation are entitled to make
the election under this subsection by reason of  subparagraph  three  of
paragraph  (k)  of subdivision nine of section two hundred eight of this
chapter[; or (iii) an S corporation which is the parent of  a  qualified
subchapter  S corporation subject to tax under article thirty-two, where
the shareholders of such parent are entitled to make the election  under
this  subsection  by  reason  of  paragraph  three  of subsection (o) of
section fourteen hundred fifty-three of this chapter].
  (h) Cross reference. For definitions relating to S  corporations,  see
subdivision  one-A of section two hundred eight [and subsections (f) and
(g) of section fourteen hundred fifty] of this chapter.
  S 74. Paragraph 1 of subsection (i) of section 660 of the tax law,  as
added  by  section  1  of  part  L of chapter 60 of the laws of 2007, is
amended to read as follows:
  (1) Notwithstanding the provisions in subsection (a) of this  section,
in  the  case  of an eligible S corporation for which the election under
subsection (a) of this section is not in effect for the current  taxable
year,  the  shareholders of an eligible S corporation are deemed to have
made that election effective for the  eligible  S  corporation's  entire
current  taxable year, if the eligible S corporation's investment income
for the current taxable year is more than fifty percent of  its  federal
gross  income  for  such  year  [provided that this subsection shall not
apply to an eligible S corporation that is subject to tax under  article
thirty-two  of this chapter]. IN DETERMINING AN ELIGIBLE S CORPORATION'S
INVESTMENT INCOME, THE INVESTMENT INCOME OF  A  QUALIFIED  SUBCHAPTER  S
SUBSIDIARY  OWNED  DIRECTLY  OR INDIRECTLY BY THE ELIGIBLE S CORPORATION
SHALL BE INCLUDED.
  S 75. Paragraph 3 of subsection (c) of section 1085 of the tax law, as
amended by section 15 of part Y of chapter 63 of the laws  of  2000,  is
amended to read as follows:

S. 6359                            148                           A. 8559

  (3)  The  provisions of this subsection and subsections (d) and (e) of
this section shall apply to the failure of a taxpayer to file a declara-
tion of estimated tax surcharge or the failure to pay all or any part of
an amount which is applied as an installment against such estimated  tax
surcharge  pursuant  to sections one hundred ninety-seven-a, one hundred
ninety-seven-b, two hundred thirteen-a, two hundred  thirteen-b,  [four-
teen  hundred  sixty, fourteen hundred sixty-one,] fifteen hundred thir-
teen and fifteen hundred fourteen  of  this  chapter.  For  purposes  of
applying this section and subsections (d) and (e) of this section to the
estimated  tax surcharge, where appropriate the term "tax" shall be read
to mean "tax surcharge," and the terms "amount  required  to  be  paid,"
"amount  which  would  be  required to be paid," and "amount which would
have been required to be paid" shall be computed as the product  of  (1)
such  amount computed without regard to the tax surcharges imposed under
sections  one  hundred  eighty-four-a,  one  hundred  eighty-six-c,  one
hundred  eighty-eight, two hundred nine-A, two hundred nine-B, [fourteen
hundred fifty-five-A, fourteen hundred  fifty-five-B,]  fifteen  hundred
five-a,  and  fifteen  hundred  twenty  of this chapter, and (2) the MTA
percentage. The term "MTA percentage" shall mean the product of (A)  the
tax rate applicable under such sections imposing such surcharges and (B)
the  percentage  utilized  in  determining the portion of the taxpayer's
business activity carried on within the metropolitan commuter  transpor-
tation district under such sections.
  S  76.  The  opening  paragraph  of subparagraph (A) of paragraph 3 of
subsection (d) of section 1085 of the tax law, as amended by chapter 170
of the laws of 1994, is amended to read as follows:
  An amount equal to ninety-one percent of the tax for the taxable  year
computed  on all items entering into the computation of the tax or taxes
of the taxpayer for the taxable year under article nine, nine-A[,  thir-
ty-two]  or  thirty-three of this chapter. For purposes of computing the
tax, all items of receipts, income and expenses shall be  placed  on  an
annualized basis--
  S  77. Clause (i) of subparagraph (A) of paragraph 4 of subsection (d)
of section 1085 of the tax law, as amended by chapter 57 of the laws  of
1993, is amended to read as follows:
  (i)  take  the items entering into the computation of the tax or taxes
of the taxpayer for the taxable year under article nine, nine-A[,  thir-
ty-two] or thirty-three of this chapter, for all months during the taxa-
ble year preceding the filing month,
  S 78. Paragraph 5 of subsection (d) of section 1085 of the tax law, as
added by chapter 61 of the laws of 1989, is amended to read as follows:
  (5)  In the case of any declaration installment, any reduction in such
installment resulting from the application of paragraph three or four of
this subsection shall be recaptured by increasing the amount of the next
installment determined under paragraph one or two of this subsection  or
paragraph  one  of  subsection (c) of this section by the amount of such
reduction (and by increasing subsequent installments to the extent  that
the  reduction has not previously been recaptured under this paragraph).
For purposes of the preceding sentence, a declaration installment  means
any installment of estimated tax other than the mandatory first install-
ment  required  under  paragraph  (a)  of subdivision one of section one
hundred ninety-seven-b, subdivision (a) of  section  two  hundred  thir-
teen-b[, subsection (a) of section fourteen hundred sixty-one] or subdi-
vision (a) of section fifteen hundred fourteen of this chapter.

S. 6359                            149                           A. 8559

  S 79. Paragraph 1 of subsection (e) of section 1085 of the tax law, as
amended  by  section 28-p of part H-3 of chapter 62 of the laws of 2003,
is amended to read as follows:
  (1) Paragraphs (1) and (2) of subsection (d) of this section shall not
apply  in  the  case of any corporation (or any predecessor corporation)
which had [entire net] BUSINESS income, or the portion thereof allocated
within the state, of one million dollars or more for  any  taxable  year
during  the  three  taxable years immediately preceding the taxable year
involved; provided, however, that in the case of a  corporation  subject
to  tax  under section fifteen hundred two-a of this chapter, paragraphs
(1) and (2) of subsection (d) of this section shall not  apply  if  such
corporation  had  entire  net  income,  or the portion thereof allocated
within the state, of one million dollars or more for any  of  the  three
taxable years immediately preceding the taxable year involved, or if the
direct  premiums  subject  to tax under section fifteen hundred two-a of
this chapter of the corporation for any of such three preceding  taxable
years  beginning on or after January first, two thousand three equals or
exceeds three million seven hundred fifty thousand dollars.
  S 80. Subsections (m) and (o) of section  1085  of  the  tax  law  are
REPEALED.
  S  81.  Clause  (ii)  of subparagraph (B) of paragraph 2 of subsection
(q), paragraph 3 of subsection (s) and the closing  paragraph  of  para-
graph  1  of  subsection (t) of section 1085 of the tax law, as added by
section 10 of part N of chapter 61 of the laws of 2005, are  amended  to
read as follows:
  (ii)  fifty percent of the gross income that the organizer or material
advisor derived with respect to activities that were the basis  for  the
requirement to file, disclose or provide information pursuant to section
six  thousand  eleven  of  the internal revenue code, to the extent such
gross income is attributable to the avoidance of any tax  imposed  under
article nine, nine-A[, thirty-two,] or thirty-three of this chapter.
  (3)  For  purposes  of  this  subsection,  the term "understatement of
liability" means any understatement  of  the  net  amount  payable  with
respect  to any tax imposed under article nine, nine-A[, thirty-two,] or
thirty-three of this chapter or any  overstatement  of  the  net  amount
creditable or refundable with respect to any such tax.
shall  pay,  with respect to each activity described in subparagraph (A)
of this paragraph, a penalty equal to one thousand dollars  or,  if  the
person  establishes  that it is lesser, one hundred percent of the gross
income derived (or to be derived) by such person from such  activity  to
the  extent  such gross income is attributed to the avoidance of any tax
imposed under articles nine, nine-A[,  thirty-two]  or  thirty-three  of
this  chapter;  provided,  however,  that if an activity with respect to
which a penalty imposed  under  this  subsection  involves  a  statement
described  in  clause  (i)  of subparagraph (B) of paragraph one of this
subsection, the penalty shall be equal to fifty  percent  of  the  gross
income derived (or to be derived) from that activity within the state by
the  person on which the penalty is imposed. For purposes of the preced-
ing sentence, activities described in clause (i) of subparagraph (A)  of
this  paragraph  with  respect  to  each  entity or arrangement shall be
treated as a separate activity and participation in each sale  described
in  clause (ii) of subparagraph (A) of this paragraph shall be so treat-
ed.
  S 82. The opening paragraph of subsection (c) of section 1087  of  the
tax  law,  as  separately amended by chapters 760 and 770 of the laws of
1992, is amended to read as follows:

S. 6359                            150                           A. 8559

  If a taxpayer is required by subdivision three of section two  hundred
eleven[,  subsection (e) of section fourteen hundred sixty-two] or para-
graph one of subdivision (e) of section fifteen hundred fifteen OF  THIS
CHAPTER, to file a report or amended return in respect of (i) a decrease
or  increase  in  federal  taxable income or federal alternative minimum
taxable income or federal tax, or (ii) a federal change or correction or
renegotiation, or computation or recomputation of tax, which is  treated
in  the  same manner as if it were an overpayment for federal income tax
purposes, claim for credit or refund of any resulting overpayment of tax
shall be filed by the taxpayer within  two  years  from  the  time  such
report  or amended return was required to be filed with the commissioner
[of taxation and finance]. If the report or amended return  required  by
any  such provision of law is not filed within the period therein speci-
fied, no interest shall be payable on any claim for credit or refund  of
the  overpayment  attributable  to the federal change or correction. The
amount of such credit or refund--
  S 83. Subsection (g) of section 1088 of the tax  law,  as  amended  by
chapter  61 of the laws of 1989 and relettered by chapter 55 of the laws
of 1992, is amended to read as follows:
  (g) Cross-reference.--For provision with  respect  to  interest  after
failure  to  file  a report or amended return under subdivision three of
section two hundred eleven[, subsection (e) of section fourteen  hundred
sixty-two]  or  paragraph  one  of  subdivision  (e)  of section fifteen
hundred fifteen, see subsection (c) of section one thousand  eighty-sev-
en.
  S 84. Paragraph 2 of subsection (b) of section 1096 of the tax law, as
amended  by  chapter  411  of  the  laws  of 1986, is amended to read as
follows:
  (2) The [tax commission] COMMISSIONER may take any action under  para-
graph  one  of  this  subdivision  to  inquire into the commission of an
offense connected with the administration or enforcement of this article
or article nine, [nine-a] NINE-A,  thirteen,  [thirteen-a,  thirty-two,]
THIRTEEN-A  or  thirty-three  of  this  chapter, provided, however, that
notwithstanding the provisions of section one  hundred  seventy-four  of
this  chapter  no  such  action  shall  be  taken when a referral by the
department or the [tax commission] COMMISSIONER to the attorney general,
a district attorney or any other  prosecutorial  agency  is  in  effect.
Provided,  however,  the [tax commission] COMMISSIONER shall have power,
during the period when such referral is in  effect,  to  examine  or  to
cause  to have examined, by any agent or representative designated by it
for that purpose, any books, papers, records or memoranda  bearing  upon
the  matters  required  to  be included in the return, where such books,
papers, records or memoranda are in its possession, or where such books,
papers, records or memoranda are  in  the  possession  of  the  attorney
general,  district  attorney or other prosecutorial agency to which such
referral is made.
  S 85. Paragraph 1 of subsection (e) of section 1096 of the tax law, as
amended by section 8 of subpart D of part V1 of chapter 57 of  the  laws
of 2009, is amended to read as follows:
  (1)  Authority to set interest rates.---The commissioner shall set the
overpayment and underpayment rates of interest to be  paid  pursuant  to
sections  two  hundred  thirteen,  two  hundred  thirteen-b, two hundred
fifty-eight, two hundred sixty-three, two hundred ninety-four, one thou-
sand eighty-four, one thousand eighty-five[,] AND one  thousand  eighty-
eight[,  fourteen hundred sixty-one and fourteen hundred sixty-three] of
this chapter, but if no such rate or rates of  interest  are  set,  such

S. 6359                            151                           A. 8559

overpayment  rate shall be deemed to be set at six percent per annum and
such underpayment rate shall be deemed to be set at seven  and  one-half
percent  per annum. Such overpayment and underpayment rates shall be the
rates  prescribed in paragraph two of this subsection, but the underpay-
ment rate shall not be less than seven and one-half percent  per  annum.
Any  such  rates  set  by  the commissioner shall apply to taxes, or any
portion thereof, which remain or become due or overpaid on or after  the
date  on  which  such  rates  become effective and shall apply only with
respect to interest computed or computable for periods  or  portions  of
periods occurring in the period during which such rates are in effect.
  S  86. Subdivision (b) of section 1201-a of the tax law, as amended by
section 5 of part Y of chapter 62 of the laws of  2006,  is  amended  to
read as follows:
  (b) Empire state film production credit. Any city in this state having
a  population  of one million or more, acting through its local legisla-
tive body, is hereby authorized to adopt and amend local laws to allow a
credit against the general corporation tax and the unincorporated  busi-
ness  tax  imposed  pursuant  to  the authority of chapter seven hundred
seventy-two of the laws of nineteen hundred  sixty-six  which  shall  be
substantially  identical to the credit allowed under section twenty-four
of this chapter, except that (A) the percentage of qualified  production
costs  used to calculate such credit shall be five percent, (B) whenever
such section twenty-four references the state, such words shall be  read
as  referencing  the  city,  (C)  such credit shall be allowed only to a
taxpayer which is a qualified  film  production  company,  and  (D)  the
effective  date  of  such  credit shall be July first, two thousand six.
Such credit shall be applied in a  manner  consistent  with  the  credit
allowed  under  subdivision  [thirty-six]  TWENTY of section two hundred
[ten] TEN-B of this chapter except as may  be  necessary  to  take  into
account differences between the general corporation tax and the unincor-
porated business tax.
  S  87. Subdivision (c) of section 1201-a of the tax law, as amended by
chapter 300 of the laws of 2007, is amended to read as follows:
  (c) Empire state commercial production credit. Any city in this  state
having  a  population  of  one million or more, acting through its local
legislative body, is hereby authorized to adopt and amend local laws  to
allow a credit against the general corporation tax and the unincorporat-
ed  business  tax  imposed  pursuant  to  the authority of chapter seven
hundred seventy-two of the laws  of  nineteen  hundred  sixty-six  which
shall  be  substantially  identical  to  the  credit  allowed  under the
provisions of section twenty-eight of this chapter, except that (A)  the
percentage  of  qualified production costs used to calculate such credit
shall be five percent, (B) whenever such section twenty-eight references
the state, such words shall be read as referencing the  city,  (C)  such
credit  shall  be allowed only to a taxpayer that is a qualified commer-
cial production company, and (D) the effective date of such credit shall
be as provided in local laws. Such credit shall be applied in  a  manner
consistent  with  the  credit  allowed  under subdivision [thirty-eight]
TWENTY-THREE of section two hundred [ten] TEN-B of this  chapter  except
as may be necessary to take into account differences between the general
corporation tax and unincorporated business tax.
  S 88. The section heading and paragraphs 1 and 3 of subdivision (a) of
section  1505-a  of the tax law, the section heading as added by chapter
11 of the laws of 1983 and paragraphs 1 and  3  of  subdivision  (a)  as
amended  by  section  6 of part A of chapter 59 of the laws of 2013, are
amended to read as follows:

S. 6359                            152                           A. 8559

  [Temporary  metropolitan]  METROPOLITAN  transportation  business  tax
surcharge on insurance corporations.
  (1)  Every  domestic  insurance corporation and every foreign or alien
insurance corporation, and every life insurance corporation described in
subdivision (b) of section fifteen hundred one of this article, for  the
privilege  of  exercising its corporate franchise, or of doing business,
or of employing capital, or of owning or leasing property in the  metro-
politan  commuter  transportation  district  in a corporate or organized
capacity, or of maintaining  an  office  in  the  metropolitan  commuter
transportation  district,  [for  all  or  any  part of its taxable years
commencing on or after January first, nineteen hundred  eighty-two,  but
ending  before  December  thirty-first,  two  thousand eighteen,] except
corporations specified in subdivision (c)  of  section  fifteen  hundred
twelve  of  this  article,  shall annually pay, in addition to the taxes
otherwise imposed by this article, a tax surcharge on the taxes  imposed
under  this  article after the deduction of any credits otherwise allow-
able under this article as allocated to such district. Such taxes  shall
be  allocated  to  such  district  for  purposes  of  computing such tax
surcharge upon taxpayers subject to tax under subdivision (b) of section
fifteen hundred ten of this article by applying the methodology,  proce-
dures  and computations set forth in subdivisions (a) and (b) of section
fifteen hundred four of this article, except that  references  to  terms
denoting  New York premiums, and total wages, salaries, personal service
compensation and commissions within New York shall be read  as  denoting
within  the  metropolitan  commuter  transportation  district  and terms
denoting total premiums and  total  wages,  salaries,  personal  service
compensation and commissions shall be read as denoting within the state.
If it shall appear to the commissioner that the application of the meth-
odology,  procedures and computations set forth in such subdivisions (a)
and (b) does not properly reflect the activity, business or income of  a
taxpayer  within the metropolitan commuter transportation district, then
the commissioner shall be authorized, in the commissioner's  discretion,
to  adjust such methodology, procedures and computations for the purpose
of allocating such taxes by:
  (A) excluding one or more factors therein;
  (B) including one or more other factors  therein,  such  as  expenses,
purchases,  receipts  other  than  premiums,  real  property or tangible
personal property; or
  (C) any other similar or different method which allocates  such  taxes
by  attributing a fair and proper portion of such taxes to the metropol-
itan commuter transportation district. The  commissioner  from  time  to
time  shall  publish all rulings of general public interest with respect
to any application of the provisions  of  the  preceding  sentence.  The
commissioner  may  promulgate rules and regulations to further implement
the provisions of this section.
  (3) Such tax surcharge shall be computed  at  the  rate  of  [eighteen
percent  of  the  taxes  imposed  under sections fifteen hundred one and
fifteen hundred ten of  this  article  as  limited  by  section  fifteen
hundred  five  of  this article, as allocated to such district, for such
taxable years or any part of such taxable years ending  before  December
thirty-first,  nineteen  hundred eighty-three after the deduction of any
credits otherwise allowable under this article, at the rate of seventeen
percent of the taxes imposed under such sections as limited  by  section
fifteen hundred five of this article, as allocated to such district, for
such  taxable years or any part of such taxable years ending on or after
December thirty-first, nineteen hundred eighty-three and before  January

S. 6359                            153                           A. 8559

first,  two  thousand three after the deduction of any credits otherwise
allowable under this article, and at the rate of] seventeen  percent  of
the  taxes  imposed  under sections fifteen hundred one, fifteen hundred
two-a,  and fifteen hundred ten of this article, as limited or otherwise
determined by subdivision (a) or (b) of section fifteen hundred five  of
this  article, as allocated to such district, [for such taxable years or
any part of such taxable years ending after December  thirty-first,  two
thousand  two]  after  the  deduction of any credits otherwise allowable
under this article[; provided, however, that the tax  surcharge  imposed
by  this  section  shall  not be imposed upon any taxpayer for more than
four hundred thirty-two months].  Provided  however,  that  for  taxable
years  commencing  on or after July first, two thousand, and in the case
of taxpayers subject to tax under section fifteen hundred two-a of  this
article,  for taxable years of such taxpayers beginning on or after July
first, two thousand and before January first, two thousand  three,  such
surcharge  shall  be  calculated  as if (i) the rate of the tax computed
under paragraph one of subdivision (a) of section fifteen hundred two of
this article was nine percent and (ii) the rate of the limitation on tax
set forth in section fifteen hundred five of this article for  domestic,
foreign  and  alien  insurance corporations except life insurance corpo-
rations was two and six-tenths percent.
  S 89. Section 1825 of the tax law, as amended by section 2 of  part  E
of chapter 25 of the laws of 2009, is amended to read as follows:
  S  1825.  Violation  of secrecy provisions of the tax law.--Any person
who violates the provisions of subdivision (b)  of  section  twenty-one,
subdivision one of section two hundred two, subdivision eight of section
two  hundred  eleven, subdivision (a) of section three hundred fourteen,
subdivision one or two of section  four  hundred  thirty-seven,  section
four  hundred  eighty-seven,  subdivision  one  or  two  of section five
hundred fourteen, subsection (e) of section  six  hundred  ninety-seven,
subsection  (a)  of section nine hundred ninety-four, subdivision (a) of
section eleven hundred forty-six, section twelve  hundred  eighty-seven,
subdivision (a) of section fourteen hundred eighteen, [subsection (a) of
section  fourteen  hundred  sixty-seven,]  subdivision  (a)  of  section
fifteen hundred eighteen, subdivision (a)  of  section  fifteen  hundred
fifty-five  of  this  chapter, and subdivision (e) of section 11-1797 of
the administrative code of the city of New York shall  be  guilty  of  a
misdemeanor.
  S 90. Subdivisions (s) and (t) of section 957 of the general municipal
law,  as  amended  by  section 1 of part S1 of chapter 57 of the laws of
2009, are amended to read as follows:
  (s) "Qualified investment project" shall mean a  project  (i)  located
within  an  empire zone, (ii) at which five hundred or more jobs will be
created, provided such jobs are new to the state and are in addition  to
any  other  jobs  previously created by the owner of such project in the
state, and (iii) which will consist of tangible  personal  property  and
other  tangible  property, including buildings and structural components
of buildings, described in subparagraphs  (i),  (ii),  (iii),  (iv)  and
clause  (A)  or  (C) of subparagraph (v) of paragraph (b) of subdivision
[twelve-B] THREE of section two hundred [ten] TEN-B of the tax law,  the
basis  of  which  for  federal  income tax purposes will equal or exceed
seven hundred fifty million dollars. Provided however, the owner of such
project does not employ more than two hundred persons in  the  state  at
the time such project is commenced.
  (t)  "Significant capital investment project" shall mean a project (i)
located within an empire  zone,  (ii)  which  will  be  either  a  newly

S. 6359                            154                           A. 8559

constructed  facility or a newly constructed addition to or expansion of
a qualified investment project, consisting of tangible personal property
and other tangible property, including buildings and  structural  compo-
nents  of  buildings,  described in subparagraphs (i), (ii), (iii), (iv)
and clause (A) or (C) of subparagraph (v) of paragraph (b)  of  subdivi-
sion [twelve-B] THREE of section two hundred [ten] TEN-B of the tax law,
the  basis of which for federal income tax purposes will equal or exceed
seven hundred fifty million dollars, (iii) which  is  constructed  after
the  basis  for  federal  income tax purposes of the property comprising
such qualified investment project equals or exceeds seven hundred  fifty
million  dollars,  and  (iv)  at which five hundred or more jobs will be
created, provided such jobs are new to the state and are in addition  to
any  other  jobs  previously created by the owner of such project in the
state.
  S 91. Subclauses (III) and (IV) of clause (ii) of subparagraph (B)  of
paragraph 6 of subdivision (a) of section 292 of the tax law, as amended
by section 3 of part E of chapter 59 of the laws of 2013, are amended to
read as follows:
  (III)  [The  adjustment  required in this paragraph shall not apply if
the taxpayer establishes, by clear and convincing evidence of  the  type
and  in  the  form  specified by the commissioner, that: (a) the royalty
payment was paid, accrued or incurred  to  a  related  member  organized
under  the  laws  of  a  country  other  than the United States; (b) the
related member's income from the transaction was subject to a comprehen-
sive income tax treaty between such country and the United  States;  (c)
the  related member was subject to tax in a foreign nation on a tax base
that included the royalty payment  paid,  accrued  or  incurred  by  the
taxpayer; (d) the related member's income from the transaction was taxed
in  such  country  at  an  effective  rate of tax at least equal to that
imposed by this state; and (e) the royalty payment was paid, accrued  or
incurred pursuant to a transaction that was undertaken for a valid busi-
ness purpose and using terms that reflect an arm's length relationship.
  (IV)] The adjustment required in this paragraph shall not apply if the
taxpayer and the commissioner agree in writing to the application or use
of alternative adjustments or computations. The commissioner may, in his
or  her  discretion,  agree  to  the  application  or use of alternative
adjustments or computations when he or she concludes that in the absence
of such agreement the income of  the  taxpayer  would  not  be  properly
reflected.
  S  92.  Clauses  (iii)  and (iv) of subparagraph (B) of paragraph 2 of
subsection (r) of section 612 of the tax law, as amended by section 5 of
part E of chapter 59 of the  laws  of  2013,  are  amended  to  read  as
follows:
  (iii)  [The  adjustment required in this subsection shall not apply if
the taxpayer establishes, by clear and convincing evidence of  the  type
and  in  the  form  specified by the commissioner, that: (I) the royalty
payment was paid, accrued or incurred  to  a  related  member  organized
under  the  laws  of  a  country  other than the United States; (II) the
related member's income from the transaction was subject to a comprehen-
sive income tax treaty between such country and the United States; (III)
the related member was subject to tax in a foreign nation on a tax  base
that  included  the  royalty  payment  paid,  accrued or incurred by the
taxpayer; (IV) the related member's  income  from  the  transaction  was
taxed  in  such  country at an effective tax rate at least equal to that
imposed by this state; and (V) the royalty payment was paid, accrued  or

S. 6359                            155                           A. 8559

incurred pursuant to a transaction that was undertaken for a valid busi-
ness purpose and using terms that reflect an arm's length relationship.
  (iv)]  The  adjustment  required in this subsection shall not apply if
the taxpayer and the commissioner agree in writing to the application or
use of alternative adjustments or computations. The commissioner may, in
his or her discretion, agree to the application or  use  of  alternative
adjustments or computations when he or she concludes that in the absence
of  such  agreement  the  income  of  the taxpayer would not be properly
reflected.
  S 93. Intentionally omitted.
  S 94. Subclauses (III) and (IV) of clause (ii) of subparagraph (B)  of
paragraph  14  of  subdivision  (b)  of  section 1503 of the tax law, as
amended by section 8 of part E of chapter 59 of the laws  of  2013,  are
amended to read as follows:
  (III)  [The  adjustment  required in this paragraph shall not apply if
the taxpayer establishes, by clear and convincing evidence of  the  type
and  in  the  form  specified by the commissioner, that: (a) the royalty
payment was paid, accrued or incurred  to  a  related  member  organized
under  the  laws  of  a  country  other  than the United States; (b) the
related member's income from the transaction was subject to a comprehen-
sive income tax treaty between such country and the United  States;  (c)
the  related member was subject to tax in a foreign nation on a tax base
that included the royalty payment  paid,  accrued  or  incurred  by  the
taxpayer; (d) the related member's income from the transaction was taxed
in  such  country  at  an  effective  rate of tax at least equal to that
imposed by this state; and (e) the royalty payment was paid, accrued  or
incurred pursuant to a transaction that was undertaken for a valid busi-
ness purpose and using terms that reflect an arm's length relationship.
  (IV)] The adjustment required in this paragraph shall not apply if the
taxpayer and the commissioner agree in writing to the application or use
of alternative adjustments or computations. The commissioner may, in his
or  her  discretion,  agree  to  the  application  or use of alternative
adjustments or computations when he or she concludes that in the absence
of such agreement the income of  the  taxpayer  would  not  be  properly
reflected.
  S  95.  Clauses  (iii)  and (iv) of subparagraph (B) of paragraph 2 of
subdivision (e) of section 11-506 of the administrative code of the city
of New York, as amended by section 9 of part E of chapter 59 of the laws
of 2013, are amended to read as follows:
  (iii) [The adjustment required in this subdivision shall not apply  if
the  taxpayer  establishes, by clear and convincing evidence of the type
and in the form specified by the commissioner of finance, that: (I)  the
royalty payment was paid, accrued or incurred to a related member organ-
ized  under the laws of a country other than the United States; (II) the
related member's income from the transaction was subject to a comprehen-
sive income tax treaty between such country and the United States; (III)
the related member was subject to tax in a foreign nation on a tax  base
that  included  the  royalty  payment  paid,  accrued or incurred by the
taxpayer; (IV) the related member's  income  from  the  transaction  was
taxed in such country at an effective rate of tax at least equal to that
imposed  by  this city; and (V) the royalty payment was paid, accrued or
incurred pursuant to a transaction that was undertaken for a valid busi-
ness purpose and using terms that reflect an arm's length relationship.
  (iv)] The adjustment required in this subdivision shall not  apply  if
the  taxpayer  and  the  commissioner of finance agree in writing to the
application or use  of  alternative  adjustments  or  computations.  The

S. 6359                            156                           A. 8559

commissioner  of  finance  may,  in  his or her discretion, agree to the
application or use of alternative adjustments or computations when he or
she concludes that in the absence of such agreement the  income  of  the
taxpayer would not be properly reflected.
  S  96.  Subclauses  (iii)  and (iv) of clause (B) of subparagraph 2 of
paragraph (n) of subdivision 8 of section 11-602 of  the  administrative
code  of  the  city  of  New York, as amended by section 10 of part E of
chapter 59 of the laws of 2013, are amended to read as follows:
  (iii) [The adjustment required in this paragraph shall  not  apply  if
the  taxpayer  establishes, by clear and convincing evidence of the type
and in the form specified by the commissioner of finance, that: (I)  the
royalty payment was paid, accrued or incurred to a related member organ-
ized  under the laws of a country other than the United States; (II) the
related member's income from the transaction was subject to a comprehen-
sive income tax treaty between such country and the United States; (III)
the related member was subject to tax in a foreign nation on a tax  base
that  included  the  royalty  payment  paid,  accrued or incurred by the
taxpayer; (IV) the related member's  income  from  the  transaction  was
taxed in such country at an effective rate of tax at least equal to that
imposed  by  this city; and (V) the royalty payment was paid, accrued or
incurred pursuant to a transaction that was undertaken for a valid busi-
ness purpose and using terms that reflect an arm's length relationship.
  (iv)] The adjustment required in this paragraph shall not apply if the
taxpayer and the commissioner of finance agree in writing to the  appli-
cation  or  use  of alternative adjustments or computations. The commis-
sioner of finance may, in his or her discretion, agree to  the  applica-
tion  or  use  of alternative adjustments or computations when he or she
concludes that in the absence  of  such  agreement  the  income  of  the
taxpayer would not be properly reflected.
  S  97.  Clauses  (iii)  and (iv) of subparagraph (B) of paragraph 2 of
subdivision (q) of section 11-641 of the administrative code of the city
of New York, as amended by section 11 of part E of  chapter  59  of  the
laws of 2013, are amended to read as follows:
  (iii)  [The adjustment required in this subdivision shall not apply if
the taxpayer establishes, by clear and convincing evidence of  the  type
and  in the form specified by the commissioner of finance, that: (I) the
royalty payment was paid, accrued or incurred to a related member organ-
ized under the laws of a country other than the United States; (II)  the
related member's income from the transaction was subject to a comprehen-
sive income tax treaty between such country and the United States; (III)
the  related member was subject to tax in a foreign nation on a tax base
that included the royalty payment  paid,  accrued  or  incurred  by  the
taxpayer;  (IV)  the  related  member's  income from the transaction was
taxed in such country at an effective rate of tax at least equal to that
imposed by this city; and (V) the royalty payment was paid,  accrued  or
incurred pursuant to a transaction that was undertaken for a valid busi-
ness purpose and using terms that reflect an arm's length relationship.
  (iv)]  The  adjustment required in this subdivision shall not apply if
the taxpayer and the commissioner of finance agree  in  writing  to  the
application  or  use  of  alternative  adjustments  or computations. The
commissioner of finance may, in his or  her  discretion,  agree  to  the
application or use of alternative adjustments or computations when he or
she  concludes  that  in the absence of such agreement the income of the
taxpayer would not be properly reflected.
  S 98. Clauses (iii) and (iv) of subparagraph (B)  of  paragraph  2  of
subdivision  (t)  of  section  11-1712 of the administrative code of the

S. 6359                            157                           A. 8559

city of New York, as amended by section 12 of part E of  chapter  59  of
the laws of 2013, are amended to read as follows:
  (iii)  [The adjustment required in this subdivision shall not apply if
the taxpayer establishes, by clear and convincing evidence of  the  type
and  in the form specified by the commissioner of finance, that: (I) the
royalty payment was paid, accrued or incurred to a related member organ-
ized under the laws of a country other than the United States; (II)  the
related member's income from the transaction was subject to a comprehen-
sive income tax treaty between such country and the United States; (III)
the  related member was subject to tax in a foreign nation on a tax base
that included the royalty payment  paid,  accrued  or  incurred  by  the
taxpayer;  (IV)  the  related  member's  income from the transaction was
taxed in such country at an effective rate of tax at least equal to that
imposed by this city; and (V) the royalty payment was paid,  accrued  or
incurred pursuant to a transaction that was undertaken for a valid busi-
ness purpose and using terms that reflect an arm's length relationship.
  (iv)]  The  adjustment required in this subdivision shall not apply if
the taxpayer and the commissioner of finance agree  in  writing  to  the
application  or  use  of  alternative  adjustments  or computations. The
commissioner of finance may, in his or  her  discretion,  agree  to  the
application or use of alternative adjustments or computations when he or
she  concludes  that  in the absence of such agreement the income of the
taxpayer would not be properly reflected.
  S 99. Notwithstanding any  provisions  of  law  to  the  contrary  and
notwithstanding  the  repeal of article 32 of the tax law by section one
of this act, the repeal of section 180 of the tax law by section two  of
this  act  and the repeal of section 181 of the tax law by section three
of this act, all provisions  of  such  article  and  such  sections,  in
respect to the imposition, exemption, assessment, payment, payment over,
determination,  collection,  and  credit  or refund of tax, interest and
penalty imposed thereunder, the filing of forms and returns, the preser-
vation of records for the purposes of such tax, the secrecy of  returns,
the disposition of revenues, and the civil and criminal penalties appli-
cable  to  the  violation  of the provisions of such article 32 and such
sections 180 and 181, shall continue  in  full  force  and  effect  with
respect to all such tax accrued for taxable years beginning before Janu-
ary  1,  2015;  and  all  actions  and  proceedings,  civil or criminal,
commenced or authorized to be  commenced  under  or  by  virtue  of  any
provision  of  such  article  32  or  by virtue of any provision of such
section 180 or 181 so repealed, and pending  or  able  to  be  commenced
immediately prior to the taking effect of such repeal, may be commenced,
prosecuted and defended to final effect in the same manner as they might
if such provisions were not so repealed.
  S  100.  Subdivision  1  of  section 187 of the tax law, as amended by
chapter 2 of the laws of 1995, is amended to read as follows:
  1. A taxpayer shall be allowed a credit, to be  credited  against  the
taxes  imposed by this article, other than the taxes and fees imposed by
sections [one hundred  eighty,  one  hundred  eighty-one,]  one  hundred
eighty-six-a and one hundred eighty-six-e of this chapter. The amount of
the  credit  shall  be  the  amount  of  the special additional mortgage
recording tax paid by the taxpayer pursuant to the provisions of  subdi-
vision one-a of section two hundred fifty-three of this chapter on mort-
gages  recorded  on  and  after January first, nineteen hundred seventy-
nine. Provided, however,  that  the  amount  of  such  credit  allowable
against the tax imposed by section one hundred eighty-four of this chap-
ter  shall  be the excess of the amount of such special additional mort-

S. 6359                            158                           A. 8559

gage recording tax paid over the amount of any credit  allowed  by  this
section  against  the tax imposed by section one hundred eighty-three of
this chapter. Provided further, however, no credit shall be allowed with
respect  to  a  mortgage  of real property principally improved or to be
improved by one or more structures containing in the aggregate not  more
than  six  residential dwelling units, each dwelling unit having its own
separate cooking facilities, where the real property is located  in  one
or more of the counties comprising the metropolitan commuter transporta-
tion  district and where the mortgage is recorded on or after May first,
nineteen hundred eighty-seven.  Provided  further,  however,  no  credit
shall be allowed with respect to a mortgage of real property principally
improved  or  to be improved by one or more structures containing in the
aggregate not more than six residential dwelling  units,  each  dwelling
unit having its own separate cooking facilities, where the real property
is  located  in the county of Erie and where the mortgage is recorded on
or after May first, nineteen hundred eighty-seven.
  S 101. Subdivision 1 of section 187-a of the  tax  law,  as  added  by
chapter 142 of the laws of 1997, is amended to read as follows:
  1.    Allowance of credit. A taxpayer shall be allowed a credit, to be
computed as hereinafter provided, against  the  taxes  imposed  by  this
article,  other  than the taxes imposed by sections [one hundred eighty,
one hundred eighty-one,] one hundred eighty-six-a, one  hundred  eighty-
six-e  and one hundred eighty-nine of this article, for employing within
the state a qualified employee. Provided, however, the amount of  credit
allowed  by  this section against the tax imposed by section one hundred
eighty-four of this article shall be the excess of the  credit  computed
under  this  section  over  the amount of credit allowed by this section
against the tax imposed by section  one  hundred  eighty-three  of  this
article.
  S  102.  Subdivision  1  of  section 190 of the tax law, as amended by
section 17 of part B of chapter 58 of the laws of 2004,  is  amended  to
read as follows:
  1.  General.  A  taxpayer  shall  be  allowed a credit against the tax
imposed by this article[, other than  the  taxes  and  fees  imposed  by
sections one hundred eighty and one hundred eighty-one of this article,]
equal  to twenty percent of the premium paid during the taxable year for
long-term care insurance. In order  to  qualify  for  such  credit,  the
taxpayer's premium payment must be for the purchase of or for continuing
coverage under a long-term care insurance policy that qualifies for such
credit  pursuant  to  section  one thousand one hundred seventeen of the
insurance law.
  S 103. Subdivision 5 of section 192 of the tax law is REPEALED.
  S 104. Clauses 1 and 2 of subparagraph (A)  and  subparagraph  (B)  of
paragraph (iii) of subdivision 9 of section 16-v of section 1 of chapter
174  of  the laws of 1968 constituting the urban development corporation
act, as added by section 1 of part C of chapter 59 of the laws of  2013,
is amended to read as follows:
  (1)  over fifty percent of the number of shares of stock entitling the
holders thereof to vote for the election of  directors  or  trustees  is
owned  or  controlled,  either  directly  or  indirectly,  by a taxpayer
subject to tax under the following provisions of the  tax  law:  article
nine-A; section one hundred eighty-three, OR one hundred eighty-four [or
one  hundred eighty-five] of article nine; [article thirty-two] or arti-
cle thirty-three; or
  (2) is substantially similar in operation and in ownership to a  busi-
ness  entity  (or  entities)  taxable  or  previously  taxable under the

S. 6359                            159                           A. 8559

following provisions of the tax law: article nine-A; section one hundred
eighty-three, one hundred eighty-four, FORMER SECTION one hundred eight-
y-five or former section one hundred eighty-six of article nine;  FORMER
article thirty-two; article thirty-three; article twenty-three, or would
have  been subject to tax under such article twenty-three (as such arti-
cle was in effect on January first,  nineteen  hundred  eighty)  or  the
income  (or  losses) of which is (or was) includable under article twen-
ty-two; or
  (B) a sole proprietorship, partnership, limited  partnership,  limited
liability  company,  or  New  York  subchapter S corporation that is not
substantially similar in operation and in ownership to a business entity
(or entities) taxable, or previously taxable, under  article  nine-A  of
the  tax law, section one hundred eighty-three, one hundred eighty-four,
FORMER SECTION one hundred eighty-five or  former  section  one  hundred
eighty-six  of article nine of the tax law, FORMER article thirty-two or
ARTICLE thirty-three of the tax law, article twenty-three of the tax law
or which would have been subject to tax under such article  twenty-three
(as  such  article  was  in  effect  on  January first, nineteen hundred
eighty) or the income (or losses) of which is (or was) includable  under
article twenty-two of the tax law; and
  S  105. Section 206 of the tax law, as added by chapter 69 of the laws
of 1978, is amended to read as follows:
  S 206.   Deposit and disposition of  revenue.    The  [license  fees,]
taxes,  percentage,  interest  and other charges imposed by this article
shall be collected and deposited and receipts  therefor  issued  by  the
[tax  commission,  except  that  such  license  fees, taxes, percentage,
interest and other charges imposed by section one hundred eighty of this
chapter shall be collected and deposited and receipts therefor issued by
the proper state officer in accordance with the provisions  of  subdivi-
sion  two  of  section one hundred eighty of this chapter,] COMMISSIONER
and all revenues  so  collected  or  received  shall  be  deposited  and
disposed  of  pursuant to the provisions of section one hundred seventy-
one-a of this chapter.
  S 106. Subsection (a) of section 1080 of the  tax  law,  as  added  by
chapter 188 of the laws of 1964, is amended to read as follows:
  (a)  General.---  The  provisions  of  this article shall apply to the
administration of and the procedures with respect to the  taxes  imposed
by  articles  nine  [(except  section one hundred eighty)], AND nine-a[,
nine-b and nine-c] of this chapter for taxable years or  periods  ending
on or after December thirty-first, nineteen hundred sixty-four.
  S  107.  Subdivisions  (a)  and (c) of section 1809 of the tax law, as
added by section 1 of subpart A of part S of chapter 57 of the  laws  of
2010, are amended to read as follows:
  (a)  Any  person  who, with intent to evade payment of any tax imposed
under article nine [(other than under section one hundred eighty or  one
hundred  eighty-one)],  nine-A,  thirteen, [thirty-two,] thirty-three or
thirty-three-A of this chapter, fails to file a  return  or  report  for
three  consecutive  taxable  years  shall be guilty of a class E felony,
provided that such person had an unpaid tax liability, in excess of  the
threshold  amount  with respect to each of the three consecutive taxable
years. The threshold amount in the case of a taxable year under  article
nine-A  of  this  chapter  ending after June thirtieth, nineteen hundred
eighty-nine is the applicable  fixed  dollar  minimum  prescribed  under
paragraph  (d)  of  subdivision  one  of section two hundred ten of this
chapter. In the event such fixed dollar minimum is less than two hundred
fifty dollars, the threshold amount in the case of such taxable year  is

S. 6359                            160                           A. 8559

two  hundred  fifty  dollars. In all other cases the threshold amount is
two hundred fifty dollars.
  (c)  As  used  in  this section, the terms "return" and "report" shall
mean a return or report required under section one  hundred  ninety-two,
two  hundred  eleven,  two hundred ninety-four, [fourteen hundred sixty-
two,] fifteen hundred fifteen or  fifteen  hundred  fifty-four  of  this
chapter.    It  shall  not  include  any return or report referred to in
section one hundred ninety-seven-a, two  hundred  thirteen-a,  [fourteen
hundred sixty] or fifteen hundred thirteen of this chapter.
  S  108.  Paragraphs (d), (e), (g), (h) and (q) of section 104-A of the
business corporation law, subdivisions (d), (e) and (q)  as  amended  by
chapter 166 of the laws of 1991, subdivision (g) as added by chapter 591
of  the  laws  of 1982, and subdivision (h) as amended by chapter 117 of
the laws of 1986, are amended to read as follows:
  (d) For filing a certificate of incorporation pursuant to section four
hundred two of this chapter, one hundred twenty-five dollars  [plus  the
tax on shares prescribed by section one hundred eighty of the tax law].
  (e)  For  filing  a certificate of amendment pursuant to section eight
hundred five of this chapter, sixty dollars  [plus  the  tax  on  shares
prescribed  by section one hundred eighty of the tax law if such certif-
icate shows a change of shares].
  (g) For filing a restated certificate  of  incorporation  pursuant  to
section eight hundred seven of this chapter, sixty dollars [plus the tax
on  shares  prescribed  by  section one hundred eighty of the tax law if
such certificate shows a change of shares].
  (h) For filing a certificate of merger or  consolidation  pursuant  to
section  nine hundred four of this chapter, or a certificate of exchange
pursuant to section nine hundred thirteen (other than paragraph  (g)  of
section  nine hundred thirteen) of this chapter, sixty dollars [plus the
tax on shares prescribed by section one hundred eighty of the tax law if
such certificate shows a change of shares].
  (q) For filing  a  certificate  of  incorporation  by  a  professional
service  corporation  pursuant  to section fifteen hundred three of this
chapter, one  hundred  twenty-five  dollars  [plus  the  tax  on  shares
prescribed by section one hundred eighty of the tax law].
  S  109.  Subdivision 8 of section 7-a of the general associations law,
as added by chapter 575 of the laws of  1964,  is  amended  to  read  as
follows:
  8. The provisions of section ninety-six of the executive law prescrib-
ing  the  fee  to  be  collected by the department of state for filing a
certificate of incorporation under the business  corporation  law  shall
apply  to  the certificate of incorporation to be filed pursuant to this
section[, and the organization tax payable  under  section  one  hundred
eighty of the tax law in respect of a corporation formed under the busi-
ness  corporation law shall be paid before the department of state shall
file such certificate of incorporation].
  S 110. Severability. If any provision of this act shall for any reason
be finally adjudged by any court of competent jurisdiction to be  inval-
id,  such judgment shall not affect, impair, or invalidate the remainder
of this act, but shall be confined in its  operation  to  the  provision
directly  involved  in the controversy in which such judgment shall have
been rendered. It is hereby declared to be in the intent of the legisla-
ture that this  act  would  have  been  enacted  even  if  such  invalid
provision  had  not  been  included  in this act. Provided further, if a
court of final, competent jurisdiction adjudges the tax rates imposed on
qualified New York manufacturers  to  be  invalid,  qualified  New  York

S. 6359                            161                           A. 8559

manufacturers  shall  be  subject  to  the  same  tax rates as all other
taxpayers subject to tax under article 9-A  of  the  tax  law.  Provided
further,  if  a court of final, competent jurisdiction adjudges that any
of  the  tax  credits provided by this act to be invalid, such credit or
credits shall be deemed repealed and shall be of no force and effect  as
to any taxpayers.
  S  111.  This act shall take effect January 1, 2015 and shall apply to
taxable years commencing on or after such date; provided that the amend-
ments to section 25 of the tax law made by section forty-three  of  this
act  shall  not  affect  the  repeal of such section and shall be deemed
repealed therewith; provided, further, that the amendments to the  open-
ing  paragraph  of  subdivision  (a), subparagraph (C) of paragraph 2 of
subdivision (e) and subdivision (f) of section 35 of the tax law made by
section fifty of this act shall not affect the repeal of such provisions
and shall be deemed repealed  therewith;  provided,  further,  that  the
amendments  to  clause  (xxxii)  of  subparagraph  (B) of paragraph 1 of
subsection (i) of section 606 of the tax law made by section sixty-eight
of this act shall not affect the repeal of  such  clause  and  shall  be
deemed  repealed  therewith;  provided,  further, that the amendments to
clause (xxxiii) of subparagraph (B) of paragraph 1 of subsection (i)  of
section 606 of the tax law made by section sixty-eight of this act shall
not affect the repeal of such clause and shall be deemed repealed there-
with;  and  provided,  further,  that  the  amendments to clause (ii) of
subparagraph (B) of paragraph  2  of  subsection  (q),  paragraph  3  of
subsection  (s)  and  the closing paragraph of paragraph 1 of subsection
(t) of section 1085 of the tax law made by section  eighty-one  of  this
act  shall  not affect the repeal of such provisions and shall be deemed
repealed therewith.

                                 PART B

  Section 1. Subparagraph (iii) of paragraph (a) of  subdivision  14  of
section  425 of the real property tax law, as added by section 1 of part
J of chapter 57 of the laws of 2013, is amended to read as follows:
  (iii) An owner who fails to register by the registration  deadline  so
established  shall be permitted to file a petition with the commissioner
requesting that the commissioner excuse such failure and accept  a  late
registration, provided that such petition shall explain why such failure
occurred  and shall be filed no later than one year after such deadline,
AND PROVIDED FURTHER THAT IF THE COMMISSIONER ACCEPTS A  LATE  REGISTRA-
TION  AFTER HAVING DIRECTED THE REMOVAL OF THE BASIC STAR EXEMPTION FROM
THE PROPERTY TO WHICH THE REGISTRATION PERTAINS, THEN IN LIEU OF DIRECT-
ING THE EXEMPTION TO BE RESTORED, THE COMMISSIONER IS AUTHORIZED IN  HIS
OR  HER DISCRETION TO REMIT DIRECTLY TO THE PROPERTY OWNER OR OWNERS THE
TAX SAVINGS THAT THE EXEMPTION  WOULD  HAVE  YIELDED  HAD  IT  NOT  BEEN
REMOVED,  AND TO FURTHER DIRECT THE ASSESSOR TO RESTORE THE EXEMPTION ON
A PROSPECTIVE BASIS WITHOUT A NEW APPLICATION UNLESS  THE  ASSESSOR  HAS
REASON  TO  BELIEVE  THAT  THE  PROPERTY OWNER IS NO LONGER ELIGIBLE FOR
REASONS OTHER THAN A FAILURE TO REGISTER;
  S 2. This act shall take effect immediately and  shall  be  deemed  to
have been in full force and effect on and after April 1, 2014.

                                 PART C

  Section  1. Section 2 of chapter 540 of the laws of 1992, amending the
real property tax law relating to oil and gas  charges,  as  amended  by

S. 6359                            162                           A. 8559

section  1  of  part  A of chapter 59 of the laws of 2012, is amended to
read as follows:
  S  2.  This  act  shall take effect immediately and shall be deemed to
have been in full force and effect on and after April 1, 1992; provided,
however that any charges imposed by section 593 of the real property tax
law as added by section one of this act shall first be  due  for  values
for assessment rolls with tentative completion dates after July 1, 1992,
and  provided  further,  that  this  act  shall remain in full force and
effect until March 31, [2015] 2018, at which time  section  593  of  the
real  property  tax  law  as  added  by section one of this act shall be
repealed.
  S 2. This act shall take effect immediately.

                                 PART D

  Section 1. Subdivision 1 of section 236  of  the  racing,  pari-mutuel
wagering and breeding law, as amended by chapter 18 of the laws of 2008,
is amended to read as follows:
  1. Every corporation authorized under this chapter to conduct pari-mu-
tuel  betting at a race meeting on races run thereat, except as provided
in section two hundred thirty-eight of this article with respect to  the
franchised corporation, shall distribute all sums deposited in any pari-
mutuel  pool  to  the holders of winning tickets therein, providing such
tickets be presented for payment before April first of the year  follow-
ing  the  year  of  their purchase, less an amount which shall be estab-
lished and retained by such racing corporation of  between  fourteen  to
twenty  per centum of the total deposits in pools resulting from regular
on-track bets and less sixteen to twenty-two per  centum  of  the  total
deposits  in pools resulting from multiple on-track bets and less twenty
to thirty per centum of the total deposits in pools resulting from exot-
ic on-track bets and less twenty to thirty-six per centum of  the  total
pools  resulting  from  super exotic on-track bets, plus the breaks. The
retention rate to be established is subject to the prior approval of the
[racing and wagering board] COMMISSION.  Such rate may  not  be  changed
more  than once per calendar quarter to be effective on the first day of
the calendar quarter. "Exotic bets" and "multiple bets" shall  have  the
meanings  set forth in section five hundred nineteen of this chapter and
breaks are hereby defined as the odd cents over any multiple of ten,  or
for  exotic  bets  over any multiple of fifty, or for super exotic bets,
over any multiple of one hundred, calculated on the basis of one dollar,
otherwise payable to a patron provided, however,  that  effective  after
October  fifteenth,  nineteen  hundred  ninety-four  breaks  are  hereby
defined as the odd cents over any multiple of five for  payoffs  greater
than one dollar five cents but less than five dollars, over any multiple
of  ten  for payoffs greater than five dollars but less than twenty-five
dollars, over any multiple of twenty-five for payoffs greater than twen-
ty-five dollars but less than two hundred fifty  dollars,  or  over  any
multiple  of  fifty  for  payoffs over two hundred fifty dollars. "Super
exotic bets" shall have the meaning set forth in section  three  hundred
one  of  this  chapter. Of the amount so retained there shall be paid by
such corporation to the department of taxation and finance as a  reason-
able  tax  by  the  state  for  the  privilege of conducting pari-mutuel
betting on the races run at the race meeting held by  such  corporation,
which tax is hereby levied, the following percentages of the total pool,
plus fifty-five per centum of the breaks; the applicable rates for regu-
lar and multiple bets shall be one and one-half per centum; the applica-

S. 6359                            163                           A. 8559

ble  rates for exotic bets shall be six and three-quarter per centum and
the applicable rate for super exotic bets shall be seven and three-quar-
ter per centum. Effective on and after September first, nineteen hundred
ninety-four,  the  applicable  tax  rate  shall be one per centum of all
wagers, provided that,  an  amount  equal  to  one-half  the  difference
between the taxation rate for on-track regular, multiple and exotic bets
as of December thirty-first, nineteen hundred ninety-three and the rates
on such on-track wagers as herein provided shall be used exclusively for
purses. Provided, however, that for any twelve-month period beginning on
April  first in nineteen hundred ninety and any year thereafter, each of
the applicable rates set forth above shall be increased  by  one-quarter
of  one  per  centum on all on-track bets of any such racing corporation
that did not expend an amount equal to at  least  one-half  of  one  per
centum  of  its  on-track bets during the immediately preceding calendar
year for enhancements consisting of capital improvements as  defined  by
section  two  hundred thirty-seven of this article, repairs to its phys-
ical plant, structures, and equipment used in  its  racing  or  wagering
operations as certified by the [state racing and wagering board] COMMIS-
SION  to  the  commissioner of taxation and finance no later than eighty
days after the close of such calendar year, and five special  events  at
each  track  in each calendar year, not otherwise conducted in the ordi-
nary course of business, the purpose of which  shall  be  to  encourage,
attract  and  promote  track  attendance and encourage new and continued
patronage, which events shall be approved by the  [racing  and  wagering
board] COMMISSION for purposes of this subdivision. In the determination
of  the  amounts  expended for such enhancements, the [board] COMMISSION
may consider the immediately preceding twelve month calendar  period  or
the average of the two immediately preceding twelve month calendar peri-
ods.  Provided  further,  however,  that of the portion of the increased
amounts retained by such corporation above  those  amounts  retained  in
nineteen  hundred  eighty-four,  an  amount  of  such  increase shall be
distributed to purses in the same proportion as commissions  and  purses
were distributed during nineteen hundred eighty-four as certified by the
[board]  COMMISSION. Such corporation in the second zone shall receive a
credit against the daily tax imposed by this subdivision  in  an  amount
equal  to  one per centum of total daily pools resulting from the simul-
cast of such corporation's races  to  licensed  facilities  operated  by
regional  off-track  betting corporations in accordance with section one
thousand eight of this chapter, provided however, that sixty per  centum
of the amount of such credit shall be used exclusively to increase purs-
es  for  overnight  races  conducted  by such corporation; and, provided
further, that in no event shall such total daily credit exceed  one  per
centum  of  the total daily pool of such corporation. Provided, however,
that on and after September first,  nineteen  hundred  ninety-four  such
credit  shall be four-tenths percent of total daily pools resulting from
such simulcasting and that in no event shall  such  total  daily  credit
equal four-tenths percent of the total daily pool of such corporation.
  Such corporation shall pay to the New York state thoroughbred breeding
and  development  fund  one-half  of  one  per centum of the total daily
on-track pari-mutuel pools from regular, multiple and exotic  bets,  and
three  per  centum  of  super exotic bets. The corporation shall receive
credit as a reduction of the tax by  the  state  for  the  privilege  of
conducting pari-mutuel betting for the amounts, except amounts paid from
super  exotic  betting  pools,  paid  to the New York state thoroughbred
breeding and development fund  after  January  first,  nineteen  hundred
seventy-eight.

S. 6359                            164                           A. 8559

  Such  corporation  shall distribute to purses an amount equal to fifty
per centum of any compensation it receives  from  simulcasting  or  from
wagering conducted outside the United States. Such corporation shall pay
to the [racing and wagering board] COMMISSION as a regulatory fee, which
fee  is hereby levied, [fifty] SIXTY hundredths of one per centum of the
total daily on-track pari-mutuel pools of such corporation.
  S 2. Paragraph (d) of subdivision 1 of  section  238  of  the  racing,
pari-mutuel  wagering  and breeding law, as amended by chapter 18 of the
laws of 2008, is amended to read as follows:
  (d) The pari-mutuel tax rate  authorized  by  paragraph  (a)  of  this
subdivision shall be effective so long as a franchised corporation noti-
fies  the  [racing and wagering board] COMMISSION by August fifteenth of
each year that such pari-mutuel tax rate is effective of its  intent  to
conduct a race meeting at Aqueduct racetrack during the months of Decem-
ber,  January, February, March and April. For purposes of this paragraph
such race meeting shall consist of not less  than  ninety-five  days  of
racing.  Not later than May first of each year that such pari-mutuel tax
rate  is  effective,  the  [racing  and wagering board] COMMISSION shall
determine whether a race meeting at Aqueduct racetrack consisted of  the
number  of days as required by this paragraph. In determining the number
of race days, cancellation of a race day because of an act of God, which
the [racing and wagering board] COMMISSION approves or because of weath-
er conditions that are unsafe or hazardous which the [racing and  wager-
ing  board]  COMMISSION  approves shall not be construed as a failure to
conduct a race day. Additionally, cancellation of a race day because  of
circumstances  beyond  the  control  of  such franchised corporation for
which the [racing and wagering board] COMMISSION  gives  approval  shall
not  be construed as a failure to conduct a race day. If the [racing and
wagering board] COMMISSION determines that the number of days of  racing
as required by this paragraph have not occurred then the pari-mutuel tax
rate in paragraph (a) of this subdivision shall revert to the pari-mutu-
el  tax rates in effect prior to January first, nineteen hundred ninety-
five. Such franchised corporation shall pay to the [racing and  wagering
board]  COMMISSION  as  a  regulatory  fee,  which fee is hereby levied,
[fifty] SIXTY hundredths of one per centum of the total  daily  on-track
pari-mutuel pools of such franchised corporation.
  S  3. Paragraph d of subdivision 1 of section 318 of the racing, pari-
mutuel wagering and breeding law, as amended by section 3 of part  B  of
chapter 59 of the laws of 2005, is amended to read as follows:
  d.  Every  harness  racing association or corporation shall pay to the
[board] COMMISSION as a regulatory fee,  which  fee  is  hereby  levied,
[fifty]  SIXTY  hundredths  of  one  percent of the total daily on-track
pari-mutuel pools of such association or corporation.
  S 4. The opening paragraph of subdivision 1  of  section  527  of  the
racing,  pari-mutuel wagering and breeding law, as amended by chapter 18
of the laws of 2008, is amended to read as follows:
  The disposition of the retained commission from pools  resulting  from
regular,  multiple or exotic bets, as the case may be, whether placed on
races run within a region or  outside  a  region,  conducted  by  racing
corporations, harness racing associations or corporations, quarter horse
racing associations or corporations or races run outside the state shall
be governed by the tables in paragraphs a and b of this subdivision. The
rate  denominated  "state  tax" shall represent the rate of a reasonable
tax imposed upon the retained commission for the privilege of conducting
off-track pari-mutuel betting, which tax is hereby levied and  shall  be
payable  in the manner set forth in this section. Each off-track betting

S. 6359                            165                           A. 8559

corporation shall pay to the [racing and wagering board] COMMISSION as a
regulatory fee, which fee is hereby levied, [fifty] SIXTY hundredths  of
one  percent  of  the total daily pools of such corporation. Each corpo-
ration  shall also pay twenty per centum of the breaks derived from bets
on harness races and fifty per centum of the breaks derived from bets on
all other races to the agriculture and New York State horse breeding and
development fund and to the thoroughbred breeding and development  fund,
the  total  of  such payments to be apportioned fifty per centum to each
such fund. For the purposes of this section, the New York city, Suffolk,
Nassau, and the Catskill regions shall constitute a  single  region  and
any  thoroughbred track located within the Capital District region shall
be deemed to be within such single region. A  "regional  meeting"  shall
refer to either harness or thoroughbred meetings, or both, except that a
franchised  corporation shall not be a regional track for the purpose of
receiving distributions from bets on thoroughbred races conducted  by  a
thoroughbred  track  in  the Catskill region conducting a mixed meeting.
With the exception of a harness racing association or corporation  first
licensed  to  conduct  pari-mutuel  wagering at a track located in Tioga
county after January first, two thousand five, racing corporations first
licensed to conduct pari-mutuel racing  after  January  first,  nineteen
hundred  eighty-six or a harness racing association or corporation first
licensed to conduct pari-mutuel wagering at a track located  in  Genesee
County  after January first, two thousand five, and quarter horse tracks
shall not be "regional tracks"; if there is more than one harness  track
within  a region, such tracks shall evenly divide payments made pursuant
to the tables in paragraphs a and b of  this  subdivision  when  neither
track  is  running.  In  the event a track elects to reduce its retained
percentage from any or all of its pari-mutuel pools, the payments to the
track holding the race and the regional track required by  paragraphs  a
and  b  of  this  subdivision  shall  be  reduced  in proportion to such
reduction. Nothing in this section shall be construed to  authorize  the
conduct  of off-track betting contrary to the provisions of section five
hundred twenty-three of this article.
  S 5. Paragraph a of subdivision 1 of section 904 of the racing,  pari-
mutuel  wagering  and breeding law, as amended by chapter 18 of the laws
of 2008, is amended to read as follows:
  a. The applicable state tax provided for in  paragraphs  a  and  b  of
subdivision  one  of  section  five hundred twenty-seven of this chapter
shall be one-half per centum for regular, multiple and exotic bets.  Any
harness  racing  or  association  or corporation, or thoroughbred racing
corporation authorized pursuant to this section shall pay to the [racing
and wagering board] COMMISSION as a regulatory fee, which fee is  hereby
levied, [fifty] SIXTY hundredths of one percent of the total daily pari-
mutuel pools.
  S 6. Paragraph g of subdivision 3 of section 1007 of the racing, pari-
mutuel  wagering  and breeding law, as amended by chapter 18 of the laws
of 2008, is amended to read as follows:
  g. Any harness racing or association or corporation,  or  thoroughbred
racing  corporation authorized pursuant to this section shall pay to the
[racing and wagering board] COMMISSION as a regulatory fee, which fee is
hereby levied, [fifty] SIXTY hundredths of  one  percent  of  the  total
daily pari-mutuel pools.
  S 7. Paragraph b of subdivision 3 of section 1008 of the racing, pari-
mutuel  wagering and breeding law, as  amended by section 7 of part B of
chapter 59 of the laws of 2005, is amended to read as follows:

S. 6359                            166                           A. 8559

  b. Of the sums received by the sending track, fifty percent  shall  be
distributed  to  purses  in  addition  to moneys distributed pursuant to
section five hundred twenty-seven of this chapter. The off-track betting
corporation shall pay to the [racing and wagering board] COMMISSION as a
regulatory  fee, which fee is hereby levied, [fifty] SIXTY hundredths of
one percent of the total daily pools.
  S 8. Paragraph d of subdivision 4 of section 1009 of the racing, pari-
mutuel wagering and breeding law, as amended by section 8 of part  B  of
chapter 59 of the laws of 2005, is amended to read as follows:
  d.  The  operator shall pay to the [racing and wagering board] COMMIS-
SION as a regulatory fee, which fee  is  hereby  levied,  [fifty]  SIXTY
hundredths of one percent of the total daily pools.
  S 9. Subparagraph (iv) of paragraph i of subdivision 1 of section 1014
of  the  racing,  pari-mutuel  wagering  and breeding law, as amended by
chapter 18 of the laws of 2008, is amended to read as follows:
  (iv) Any thoroughbred racing corporation or harness racing association
or corporation or off-track betting corporation authorized  pursuant  to
this  section shall pay to the [racing and wagering board] COMMISSION as
a regulatory fee, which fee is hereby levied, [fifty]  SIXTY  hundredths
of one percent of all wagering pools.
  S  10.  Paragraph  e  of  subdivision 3 of section 1015 of the racing,
pari-mutuel wagering and breeding law, as amended by chapter 18  of  the
laws of 2008, is amended to read as follows:
  e.  Any  thoroughbred racing corporation or harness racing association
or corporation or off-track betting corporation authorized  pursuant  to
this  section shall pay to the [racing and wagering board] COMMISSION as
a regulatory fee, which fee is hereby levied, [fifty]  SIXTY  hundredths
of one percent of all wagering pools.
  S  11. Clause (B) of subparagraph 2 of paragraph b of subdivision 1 of
section 1016 of the racing, pari-mutuel wagering and  breeding  law,  as
amended  by  chapter  18  of  the  laws  of  2008, is amended to read as
follows:
  (B) Any harness racing or association or corporation  or  thoroughbred
racing  corporation authorized pursuant to this section shall pay to the
[racing and wagering board] COMMISSION as a regulatory fee, which fee is
hereby levied, [fifty] SIXTY hundredths of  one  percent  of  the  total
daily pari-mutuel pools.
  S  12.  Paragraph  b  of  subdivision 2 of section 1018 of the racing,
pari-mutuel wagering and breeding law, as amended by chapter 18  of  the
laws of 2008, is amended to read as follows:
  b.  Any  thoroughbred racing corporation or harness racing association
or corporation or off-track betting corporation shall pay to the [racing
and wagering board] COMMISSION as a regulatory fee, which fee is  hereby
levied, [fifty] SIXTY hundredths of one percent of all wagering pools.
  S 13. This act shall take effect immediately.

                                 PART E

  Section 1. Subsection (a) of section 653 of the tax law, as amended by
chapter 65 of the laws of 1985, is amended to read as follows:
  (a)  General.  (1) Any return, statement or other document required to
be made pursuant to this article shall  be  signed  in  accordance  with
regulations  or  instructions prescribed by the [tax commission] COMMIS-
SIONER.   The fact that an individual's name  is  signed  to  a  return,
statement,  or  other  document,  shall  be prima facie evidence for all

S. 6359                            167                           A. 8559

purposes that the return,  statement  or  other  document  was  actually
signed by him OR HER.
  (2)  IN  THE  CASE  OF  AN  ELECTRONICALLY FILED INDIVIDUAL'S PERSONAL
INCOME TAX RETURN PREPARED BY A TAX PREPARER, AN AUTHORIZATION  TO  FILE
ANY  RETURN, STATEMENT OR OTHER DOCUMENT REQUIRED TO BE MADE PURSUANT TO
THIS ARTICLE SIGNED BY THE TAXPAYER IN ACCORDANCE WITH  THE  REGULATIONS
OR  INSTRUCTIONS  PRESCRIBED  BY THE COMMISSIONER AND RECEIVED ELECTRON-
ICALLY BY THE TAX PREPARER  SHALL  SATISFY  THE  SIGNATURE  REQUIREMENTS
UNDER THIS ARTICLE.
  S 2. This act shall take effect immediately and shall apply to returns
filed for taxable years beginning on or after January 1, 2014.

                                 PART F

  Section 1. Clause (C) of subparagraph (i) of paragraph (b) of subdivi-
sion  4  of  section  425  of  the  real property tax law, as amended by
section 3 of part E of chapter 83 of the laws of  2002,  is  amended  to
read as follows:
  (C)  For final assessment rolls to be completed in [each ensuing year]
THE YEARS TWO THOUSAND FOUR THROUGH TWO THOUSAND FOURTEEN, the  applica-
ble income tax year, cost-of-living-adjustment percentage and applicable
increase  percentage  shall  all be advanced by one year, and the income
standard shall be the previously-applicable income standard increased by
the new cost-of-living-adjustment percentage. If there should be a  year
for  which  there  is no applicable increase percentage due to a general
benefit increase as defined by subdivision three of  subsection  (i)  of
section  four  hundred  fifteen  of title forty-two of the United States
code, the applicable increase percentage for purposes of  this  computa-
tion  shall be deemed to be the percentage which would have yielded that
general benefit increase. FOR FINAL ASSESSMENT ROLLS TO BE COMPLETED  IN
TWO  THOUSAND  FIFTEEN  AND  THEREAFTER,  THE APPLICABLE INCOME TAX YEAR
SHALL BE  ADVANCED  BY  ONE  YEAR,  AND  ELIGIBILITY  FOR  THE  ENHANCED
EXEMPTION  SHALL  BE  BASED  UPON  THE INCOME STANDARD APPLIED FOR FINAL
ASSESSMENT ROLLS COMPLETED IN TWO THOUSAND FOURTEEN.
  S 2. This act shall take effect immediately and shall apply to assess-
ment rolls completed in 2015 and thereafter.

                                 PART G

  Section 1. Section 2 of part I of chapter 58  of  the  laws  of  2006,
relating  to  providing an enhanced earned income tax credit, as amended
by section 1 of part L of chapter 59 of the laws of 2012, is amended  to
read as follows:
  S 2. This act shall take effect immediately and shall apply to taxable
years beginning on or after January 1, 2006 and before January 1, [2015]
2017.
  S 2. This act shall take effect immediately.

                                 PART H

  Section  1.  The  general  obligations  law is amended by adding a new
section 3-505 to read as follows:
  S 3-505. ENFORCEMENT OF DELINQUENT TAX LIABILITIES THROUGH  ELECTRONIC
TAX CLEARANCES FOR OCCUPATIONAL, PROFESSIONAL AND BUSINESS LICENSES.
  1. AS USED IN THIS SECTION:

S. 6359                            168                           A. 8559

  A.  "GOVERNMENT  ENTITY"  MEANS  THE  STATE OF NEW YORK, OR ANY OF ITS
AGENCIES, POLITICAL SUBDIVISIONS, INSTRUMENTALITIES, PUBLIC CORPORATIONS
(INCLUDING A PUBLIC CORPORATION CREATED PURSUANT TO AGREEMENT OR COMPACT
WITH ANOTHER STATE OR CANADA), OR COMBINATION THEREOF,  RESPONSIBLE  FOR
DETERMINING WHETHER A LICENSE SHALL BE ISSUED OR RENEWED.
  B.  "ELECTRONIC  LICENSE  APPLICATION"  MEANS ANY ELECTRONIC DATA FORM
THAT MUST BE COMPLETED BY AN APPLICANT TO OBTAIN OR RENEW A LICENSE,  OR
AN ELECTRONIC DATA PROCESS WHICH IS USED BY A GOVERNMENT ENTITY TO PROC-
ESS  DATA  RECEIVED  FROM  AN  APPLICANT  SEEKING  TO RECEIVE OR RENEW A
LICENSE.
  C. "ELECTRONIC TAX CLEARANCE" MEANS AN ELECTRONIC  COMMUNICATION  FROM
THE  DEPARTMENT OF TAXATION AND FINANCE INDICATING THAT AN APPLICANT HAD
NO PAST-DUE TAX LIABILITIES, AS THAT TERM  IS  DEFINED  IN  SECTION  ONE
HUNDRED  SEVENTY-ONE-W OF THE TAX LAW, OR THAT NO CONCLUSIVE MATCH COULD
BE MADE.
  D. "LICENSE" MEANS  ANY  CERTIFICATE,  LICENSE,  PERMIT  OR  GRANT  OF
PERMISSION  REQUIRED  BY LAW OR AGENCY REGULATION AS A CONDITION FOR THE
LAWFUL PRACTICE OF ANY OCCUPATION, EMPLOYMENT,  TRADE,  VOCATION,  BUSI-
NESS, OR PROFESSION, INCLUDING ANY REGISTRATION REQUIRED BY LAW OR AGEN-
CY  REGULATION  AS  A  CONDITION  FOR  SUCH  LAWFUL PRACTICE. THIS SHALL
INCLUDE, BUT IS NOT LIMITED TO, ANY LICENSE GRANTED TO AN INDIVIDUAL  OR
ENTITY  BY  THE  STATE EDUCATION DEPARTMENT, THE DEPARTMENT OF STATE, OR
THE OFFICE OF COURT ADMINISTRATION.  PROVIDED, HOWEVER,  THAT  "LICENSE"
SHALL  NOT,  FOR  THE  PURPOSES  OF THIS SECTION, INCLUDE ANY LICENSE OR
PERMIT TO OWN, POSSESS, CARRY, OR FIRE ANY EXPLOSIVE,  PISTOL,  HANDGUN,
RIFLE, SHOTGUN, OTHER FIREARM OR AMMUNITION.
  2.  NOTWITHSTANDING  ANY  OTHER PROVISION OF LAW, AND WHEN NOT ALREADY
REQUIRED BY ANOTHER PROVISION OF LAW OR REGULATION, ANY GOVERNMENT ENTI-
TY MAY ELECT TO CONDITION THE ISSUANCE OR RENEWAL OF A  LICENSE  ON  THE
ABSENCE  OF  PAST-DUE  TAX  LIABILITIES  AND  TO MAKE SUCH DETERMINATION
THROUGH THE RECEIPT OF AN ELECTRONIC TAX CLEARANCE FROM  THE  DEPARTMENT
OF  TAXATION AND FINANCE AS PROVIDED FOR IN SECTION ONE HUNDRED SEVENTY-
ONE-W OF THE TAX LAW.
  3. ANY APPLICANT FOR A LICENSE SUBJECT  TO  ELECTRONIC  TAX  CLEARANCE
SHALL  BE  REQUIRED  TO  PROVIDE ANY INFORMATION DEEMED NECESSARY BY THE
GOVERNMENT ENTITY AND THE DEPARTMENT OF TAXATION AND  FINANCE  TO  EFFI-
CIENTLY  AND  ACCURATELY  PROVIDE  AN  ELECTRONIC TAX CLEARANCE, AND THE
FAILURE BY THE APPLICANT TO PROVIDE SUCH INFORMATION  SHALL  RENDER  THE
APPLICATION INCOMPLETE.
  4.  THE APPLICATION FOR A LICENSE SUBJECT TO ELECTRONIC TAX CLEARANCE,
OR THE INSTRUCTIONS FOR  SUCH  APPLICATION,  SHALL  CLEARLY  INFORM  THE
APPLICANT  THAT  AN ELECTRONIC TAX CLEARANCE WILL BE PERFORMED AND THAT,
IF THE TAX CLEARANCE IS DENIED, THE APPLICANT MUST CONTACT  THE  DEPART-
MENT  OF  TAXATION  AND  FINANCE TO RESOLVE ANY PAST-DUE TAX LIABILITIES
BEFORE THE APPLICATION FOR A LICENSE OR RENEWAL MAY BE RESUBMITTED.
  5. IF AN ELECTRONIC TAX CLEARANCE IS DENIED BY THE DEPARTMENT OF TAXA-
TION AND FINANCE, THE GOVERNMENT ENTITY SHALL DENY ISSUANCE  OR  RENEWAL
OF  THE  REQUESTED LICENSE AND SHALL ELECTRONICALLY NOTIFY THE APPLICANT
TO CONTACT THE  DEPARTMENT  OF  TAXATION  AND  FINANCE  TO  RESOLVE  THE
PAST-DUE  TAX  LIABILITIES  AND THAT NO LICENSE MAY BE ISSUED OR RENEWED
UNTIL THE TAX LIABILITIES ARE RESOLVED.
  6. ANY TAX CLEARANCE OR RELATED  COMMUNICATIONS  SHALL  BE  BY  SECURE
ELECTRONIC  COMMUNICATION BETWEEN THE DEPARTMENT OF TAXATION AND FINANCE
AND THE REQUESTING GOVERNMENT ENTITY SUCH THAT PROCESSING OF  THE  ELEC-
TRONIC  APPLICATION  IS  NOT  DELAYED IF THE ELECTRONIC TAX CLEARANCE IS
RECEIVED.  NOTWITHSTANDING ANY OTHER LAW TO THE CONTRARY,  A  GOVERNMENT

S. 6359                            169                           A. 8559

ENTITY  SHALL  BE  AUTHORIZED TO SHARE ANY APPLICANT DATA OR INFORMATION
WITH THE DEPARTMENT OF TAXATION AND FINANCE THAT IS NECESSARY TO  ENSURE
THE  PROPER  MATCHING  OF THE APPLICANT TO THE TAX RECORDS MAINTAINED BY
THE DEPARTMENT OF TAXATION AND FINANCE.
  7.  NO  FEE  SHALL  BE  CHARGED  TO  THE APPLICANT FOR THE PURPOSES OF
RECEIVING AN ELECTRONIC TAX CLEARANCE.
  S 2. The tax law is amended by adding a new section 171-w to  read  as
follows:
  S  171-W. ENFORCEMENT OF DELINQUENT TAX LIABILITIES THROUGH ELECTRONIC
TAX CLEARANCES FOR OCCUPATIONAL, PROFESSIONAL AND BUSINESS LICENSES.  1.
IN ACCORDANCE WITH SECTION 3-505 OF THE  GENERAL  OBLIGATIONS  LAW,  THE
COMMISSIONER  SHALL  COOPERATE WITH ANY GOVERNMENT ENTITY THAT ELECTS TO
REQUIRE AN ELECTRONIC TAX CLEARANCE AS A PART OF AN  ELECTRONIC  LICENSE
APPLICATION  PROCESS FOR WHICH THE GOVERNMENT ENTITY IS RESPONSIBLE. FOR
THE PURPOSES OF THIS SECTION, THE TERM "TAX LIABILITIES" SHALL MEAN  ANY
TAX,  SURCHARGE, OR FEE ADMINISTERED BY THE COMMISSIONER, OR ANY PENALTY
OR INTEREST OWED BY AN INDIVIDUAL OR  ENTITY.  THE  TERM  "PAST-DUE  TAX
LIABILITIES"  MEANS  ANY UNPAID TAX LIABILITIES EQUAL TO OR IN EXCESS OF
FIVE HUNDRED DOLLARS WHICH HAVE BECOME FIXED AND  FINAL  SUCH  THAT  THE
TAXPAYER  NO  LONGER HAS ANY RIGHT TO ADMINISTRATIVE OR JUDICIAL REVIEW.
FOR THE PURPOSES OF THIS SECTION, THE TERMS "GOVERNMENT ENTITY,"  "ELEC-
TRONIC  LICENSE  APPLICATION," AND "LICENSE" SHALL HAVE THE SAME MEANING
AS PROVIDED IN SECTION 3-505 OF THE GENERAL OBLIGATIONS LAW.
  2. THE COMMISSIONER, OR HIS OR HER DESIGNEE, SHALL COOPERATE WITH  ANY
GOVERNMENT  ENTITY EXERCISING ITS AUTHORITY PURSUANT TO SECTION 3-505 OF
THE GENERAL OBLIGATIONS LAW TO ESTABLISH PROCEDURES BY WHICH THE DEPART-
MENT SHALL ELECTRONICALLY RECEIVE A TAX CLEARANCE REQUEST  AS  AN  ELEC-
TRONIC  LICENSE  APPLICATION  IS  PROCESSED, AND ELECTRONICALLY TRANSMIT
SUCH TAX CLEARANCE TO THE  GOVERNMENT  ENTITY.  THESE  PROCEDURES  SHALL
INCLUDE  THE  IDENTIFICATION  OF OWNERS, OFFICERS OR RESPONSIBLE PERSONS
SUBJECT TO ELECTRONIC TAX CLEARANCE IN CONJUNCTION WITH  AN  APPLICATION
BY AN ENTITY, AND ANY OTHER PROCEDURES DEEMED NECESSARY TO CARRY OUT THE
PROVISIONS OF THIS SECTION.
  3.  IN ANY INSTANCE WHERE A LICENSE OR LICENSE RENEWAL PROVIDED BY THE
GOVERNMENT ENTITY IS OF A TYPE THAT MAY BE ISSUED ONLY TO AN  INDIVIDUAL
OR  ENTITY THAT IS A PERSON REQUIRED TO REGISTER PURSUANT TO SECTION ONE
THOUSAND ONE HUNDRED THIRTY-FOUR OF THIS CHAPTER, THE  DEPARTMENT  SHALL
ALSO  VERIFY  THAT THE APPLICANT IS REGISTERED PURSUANT TO SUCH SECTION,
AND NO ELECTRONIC TAX CLEARANCE MAY BE ISSUED UNLESS  THE  APPLICANT  IS
REGISTERED PURSUANT TO SUCH SECTION.
  4.  IF A TAX CLEARANCE IS DENIED, THE GOVERNMENT ENTITY PROCESSING THE
APPLICATION SHALL PROVIDE NOTICE TO THE APPLICANT TO CONTACT THE DEPART-
MENT.  WHEN THE APPLICANT CONTACTS THE DEPARTMENT, THE DEPARTMENT  SHALL
INFORM THE APPLICANT (A) WHAT PAST-DUE TAX LIABILITIES ARE AT ISSUE; (B)
THAT AN ELECTRONIC TAX CLEARANCE MAY BE RECEIVED BY FULLY SATISFYING THE
PAST-DUE  TAX LIABILITIES OR BY MAKING PAYMENT ARRANGEMENTS SATISFACTORY
TO THE COMMISSIONER OR, IF THE APPLICANT NEEDS TO REGISTER FOR SALES TAX
PURPOSES, BY REGISTERING PURSUANT TO SECTION ONE  THOUSAND  ONE  HUNDRED
THIRTY-FOUR  OF  THIS  CHAPTER;  AND (C) THE GROUNDS FOR CHALLENGING THE
DENIAL OF AN ELECTRONIC TAX CLEARANCE LISTED IN SUBDIVISION FIVE OF THIS
SECTION. THE GOVERNMENT ENTITY SHALL ALSO INFORM THE APPLICANT  THAT  AN
APPLICATION  MAY  BE  RESUBMITTED  AFTER  PAYMENT  FOR  THE PAST-DUE TAX
LIABILITIES HAS CLEARED, OR, IF A PAYMENT PLAN IS AGREED TO,  AFTER  THE
FIRST PAYMENT PURSUANT TO SUCH PLAN HAS CLEARED.
  5.  (A)  NOTWITHSTANDING  ANY  OTHER  PROVISION  OF LAW, AND EXCEPT AS
SPECIFICALLY PROVIDED HEREIN, AN  APPLICANT  DENIED  AN  ELECTRONIC  TAX

S. 6359                            170                           A. 8559

CLEARANCE  SHALL  HAVE NO RIGHT TO COMMENCE A COURT ACTION OR PROCEEDING
OR SEEK ANY OTHER LEGAL RECOURSE AGAINST THE DEPARTMENT OR  THE  GOVERN-
MENT  ENTITY RELATED TO THE DENIAL OF AN ELECTRONIC TAX CLEARANCE BY THE
DEPARTMENT.  AN APPLICANT MAY CHALLENGE SUCH DENIAL OF AN ELECTRONIC TAX
CLEARANCE ONLY ON THE GROUNDS THAT:
  (I) THE INDIVIDUAL OR ENTITY DENIED THE ELECTRONIC  TAX  CLEARANCE  IS
NOT THE INDIVIDUAL OR ENTITY WITH THE PAST-DUE TAX LIABILITIES AT ISSUE;
(II)  THE PAST-DUE TAX LIABILITIES WERE SATISFIED; (III) THE APPLICANT'S
WAGES ARE BEING GARNISHED FOR THE PAYMENT OF CHILD SUPPORT  OR  COMBINED
CHILD  AND SPOUSAL SUPPORT PURSUANT TO AN INCOME EXECUTION ISSUED PURSU-
ANT TO SECTION FIVE THOUSAND TWO HUNDRED FORTY-ONE OR FIVE THOUSAND  TWO
HUNDRED FORTY-TWO OF THE CIVIL PRACTICE LAW AND RULES OR ANOTHER STATE'S
INCOME WITHHOLDING ORDER AS AUTHORIZED UNDER PART FIVE OF ARTICLE FIVE-B
OF  THE FAMILY COURT ACT, OR GARNISHED BY THE DEPARTMENT FOR THE PAYMENT
OF THE PAST-DUE TAX LIABILITIES AT ISSUE; (IV) THE APPLICANT  IS  MAKING
CHILD  SUPPORT  PAYMENTS  OR COMBINED CHILD AND SPOUSAL SUPPORT PAYMENTS
PURSUANT TO A SATISFACTORY PAYMENT ARRANGEMENT UNDER SECTION ONE HUNDRED
ELEVEN-B OF THE SOCIAL SERVICES LAW WITH A SUPPORT  COLLECTION  UNIT  OR
OTHERWISE  MAKING  PERIODIC  PAYMENTS  IN  ACCORDANCE  WITH SECTION FOUR
HUNDRED FORTY OF THE FAMILY COURT ACT; OR (V) IF THE ONLY BASIS FOR  THE
DENIAL  OF  AN  ELECTRONIC  TAX CLEARANCE WAS THE APPLICANT'S FAILURE TO
REGISTER PURSUANT TO SECTION ONE THOUSAND  ONE  HUNDRED  THIRTY-FOUR  OF
THIS  CHAPTER,  THAT  THE  APPLICANT WAS PROPERLY REGISTERED PURSUANT TO
SUCH SECTION ONE THOUSAND ONE HUNDRED THIRTY-FOUR.
  (B) AN APPLICANT SEEKING TO CHALLENGE THE DENIAL OF AN ELECTRONIC  TAX
CLEARANCE  MUST PROTEST TO THE DEPARTMENT OR THE DIVISION OF TAX APPEALS
NO LATER THAN SIXTY DAYS FROM THE DATE OF THE ELECTRONIC NOTIFICATION TO
THE APPLICANT, PURSUANT TO SUBDIVISION FOUR  OF  SECTION  3-505  OF  THE
GENERAL OBLIGATIONS LAW, THAT THE ELECTRONIC TAX CLEARANCE WAS DENIED.
  (C)  NOTHING  IN  THIS  SUBDIVISION IS INTENDED TO LIMIT ANY APPLICANT
FROM SEEKING RELIEF FROM JOINT AND SEVERAL LIABILITY PURSUANT TO SECTION
SIX HUNDRED FIFTY-FOUR OF THIS CHAPTER, TO THE EXTENT THAT HE OR SHE  IS
ELIGIBLE  PURSUANT  TO  THAT  SECTION, OR ESTABLISHING TO THE DEPARTMENT
THAT THE ENFORCEMENT OF THE UNDERLYING TAX LIABILITIES HAS  BEEN  STAYED
BY  THE  FILING  OF  A  PETITION PURSUANT TO THE BANKRUPTCY CODE OF 1978
(TITLE ELEVEN OF THE UNITED STATES CODE).
  6. NOTWITHSTANDING ANY OTHER PROVISION  OF  LAW,  THE  DEPARTMENT  MAY
EXCHANGE  WITH  A  GOVERNMENT  ENTITY  ANY DATA OR INFORMATION NECESSARY
THAT, IN THE DISCRETION OF THE COMMISSIONER, IS NECESSARY FOR THE IMPLE-
MENTATION OF ANY ELECTRONIC TAX CLEARANCE. HOWEVER, NO OTHER AGENCY  MAY
RE-DISCLOSE  THIS  INFORMATION TO ANY OTHER ENTITY OR PERSON, OTHER THAN
FOR THE PURPOSE OF INFORMING THE APPLICANT THAT THE  APPLICATION  FOR  A
LICENSE  OR THE RENEWAL OF SUCH LICENSE WILL NOT BE PROCESSED DUE TO THE
LACK OF A REQUIRED TAX CLEARANCE AUTHORIZED  BY  ANY  PROVISION  OF  LAW
UNLESS OTHERWISE PERMITTED BY LAW.
  7.  EXCEPT  AS  OTHERWISE  PROVIDED IN THIS SECTION, THE ACTIVITIES TO
COLLECT PAST-DUE TAX LIABILITIES UNDERTAKEN BY THE  DEPARTMENT  PURSUANT
TO  THIS  SECTION  SHALL  NOT  IN  ANY WAY LIMIT, RESTRICT OR IMPAIR THE
DEPARTMENT FROM EXERCISING ANY OTHER AUTHORITY TO COLLECT OR ENFORCE TAX
LIABILITIES UNDER ANY OTHER APPLICABLE PROVISION OF LAW.
  8. EXCEPT AS OTHERWISE PROVIDED IN THIS  SECTION,  THE  PROVISIONS  OF
THIS SECTION ARE NOT APPLICABLE TO THE TAX CLEARANCE REQUIRED BY SECTION
ONE HUNDRED SEVENTY-ONE-V OF THIS CHAPTER.
  S  3. This act shall take effect June 1, 2014; provided, however, that
the department of taxation and finance and any government entity  elect-
ing  to receive an electronic tax clearance from the department of taxa-

S. 6359                            171                           A. 8559

tion and finance may work to execute the necessary procedures and  tech-
nical  changes  to  support  the  electronic  tax  clearance  process as
described in sections  one  and  two  of  this  act  before  that  date;
provided, further, that this effective date will not impact the adminis-
tration  of  any  electronic tax clearance program authorized by another
provision of law.

                                 PART I

  Section 1. Subsection (b) of section 612 of the tax law is amended  by
adding a new paragraph 40 to read as follows:
  (40)  IN  THE  CASE OF A BENEFICIARY OF A NONRESIDENT TRUST OR A TRUST
NOT SUBJECT TO TAX PURSUANT TO SUBPARAGRAPH (D) OF  PARAGRAPH  THREE  OF
SUBSECTION  (B)  OF SECTION SIX HUNDRED FIVE OF THIS ARTICLE (EXCEPT FOR
AN INCOMPLETE GIFT NON-GRANTOR TRUST, AS DEFINED BY PARAGRAPH  FORTY-ONE
OF  THIS  SUBSECTION),  THE  AMOUNT  OF ANY ACCUMULATION DISTRIBUTION AS
DESCRIBED IN SUBSECTION (B) OF SECTION SIX  HUNDRED  SIXTY-FIVE  OF  THE
INTERNAL  REVENUE  CODE  FOR  THE TAX YEAR, SUCH AMOUNT TO BE DETERMINED
WITHOUT REGARD TO THE  PENULTIMATE  SENTENCE  OF  SUCH  SUBSECTION  THAT
REFERENCES  SECTION  SIX  HUNDRED  SIXTY-SEVEN OF SUCH CODE, AND WITHOUT
REGARD TO SUBSECTION (C) OF SECTION SIX HUNDRED SIXTY-FIVE OF THE INTER-
NAL REVENUE CODE, TO THE EXTENT NOT ALREADY INCLUDED  IN  FEDERAL  GROSS
INCOME FOR THE TAX YEAR.
  S 2. Subsection (b) of section 612 of the tax law is amended by adding
a new paragraph 41 to read as follows:
  (41)  IN  THE CASE OF A TAXPAYER WHO TRANSFERRED PROPERTY TO AN INCOM-
PLETE GIFT  NON-GRANTOR  TRUST,  THE  INCOME  OF  THE  TRUST,  LESS  ANY
DEDUCTIONS  OF  THE  TRUST,  TO THE EXTENT SUCH INCOME AND DEDUCTIONS OF
SUCH TRUST WOULD BE TAKEN  INTO  ACCOUNT  IN  COMPUTING  THE  TAXPAYER'S
FEDERAL  TAXABLE  INCOME IF SUCH TRUST IN ITS ENTIRETY WERE TREATED AS A
GRANTOR TRUST FOR FEDERAL TAX PURPOSES. FOR PURPOSES OF THIS  PARAGRAPH,
AN "INCOMPLETE GIFT NON-GRANTOR TRUST" MEANS A RESIDENT TRUST THAT MEETS
THE  FOLLOWING  CONDITIONS:  (I) THE TRUST DOES NOT QUALIFY AS A GRANTOR
TRUST UNDER SECTION SIX HUNDRED SEVENTY-ONE THROUGH SIX  HUNDRED  SEVEN-
TY-NINE  OF THE INTERNAL REVENUE CODE, AND (2) THE GRANTOR'S TRANSFER OF
ASSETS TO THE TRUST IS TREATED AS AN INCOMPLETE GIFT UNDER SECTION TWEN-
TY-FIVE HUNDRED ELEVEN OF THE INTERNAL REVENUE CODE, AND THE REGULATIONS
THEREUNDER.
  S 3. Section 621 of the tax law, as added by chapter 272 of  the  laws
of  1963  and  subsection  (a)  as amended by chapter 267 of the laws of
1987, is amended to read as follows:
  S 621. [Credit] CREDITS to trust  beneficiary  receiving  accumulation
distribution.   (a) General. A resident beneficiary of a trust whose New
York adjusted gross income includes  all  or  part  of  an  accumulation
distribution by such trust, as defined in section six hundred sixty-five
of the internal revenue code, INCLUDING A BENEFICIARY WHO IS REQUIRED TO
MAKE  THE  MODIFICATION REQUIRED BY PARAGRAPH FORTY OF SUBSECTION (B) OF
SECTION SIX HUNDRED TWELVE OF THIS PART, shall be allowed (1)  a  credit
against  the  tax  otherwise due under this article for all or a propor-
tionate part of any tax paid by the trust under this  article  or  under
FORMER article sixteen of this chapter (as such article was in effect on
or before December thirtieth, nineteen hundred sixty), for any preceding
taxable  year which would not have been payable if the trust had in fact
made distributions to its beneficiaries at the times and in the  amounts
specified in section six hundred sixty-six of the internal revenue code;
AND (2) A CREDIT AGAINST THE TAXES IMPOSED BY THIS ARTICLE FOR THE TAXA-

S. 6359                            172                           A. 8559

BLE YEAR FOR ANY INCOME TAX IMPOSED ON THE TRUST FOR THE TAXABLE YEAR OR
ANY  PRIOR  TAXABLE  YEAR BY ANOTHER STATE OF THE UNITED STATES, A POLI-
TICAL SUBDIVISION THEREOF, OR THE DISTRICT OF COLUMBIA, UPON INCOME BOTH
DERIVED  THEREFROM  AND SUBJECT TO TAX UNDER THIS ARTICLE, PROVIDED THAT
THE AMOUNT OF THE CREDIT SHALL NOT EXCEED  THE  PERCENTAGE  OF  THE  TAX
OTHERWISE  DUE  UNDER THIS ARTICLE DETERMINED BY DIVIDING THE PORTION OF
THE INCOME THAT IS BOTH TAXABLE TO THE TRUST IN SUCH OTHER  JURISDICTION
AND TAXABLE TO THE BENEFICIARY UNDER THIS ARTICLE BY THE TOTAL AMOUNT OF
THE BENEFICIARY'S NEW YORK INCOME.
  (b)  Limitation.  The  [credit]  CREDITS  under this section shall not
reduce the tax otherwise due from the beneficiary under this article  to
an amount less than would have been due if the accumulation distribution
or  his  part  thereof  were  excluded  from his New York adjusted gross
income.
  S 4. Section 658 of the tax law is amended by adding a new  subsection
(f) to read as follows:
   (F)  (1) EVERY NONRESIDENT TRUST OR A TRUST DESCRIBED BY SUBPARAGRAPH
(D) OF PARAGRAPH THREE OF SUBSECTION (B) OF SECTION SIX HUNDRED FIVE  OF
THIS  ARTICLE SHALL MAKE A RETURN FOR ANY TAXABLE YEAR IN WHICH IT MAKES
AN ACCUMULATION DISTRIBUTION WITHIN THE MEANING OF  SUBDIVISION  (B)  OF
SECTION SIX HUNDRED SIXTY-FIVE OF THE INTERNAL REVENUE CODE TO A BENEFI-
CIARY  WHO  IS  A  RESIDENT,  WHICH RETURN SHALL INCLUDE (I) INFORMATION
IDENTIFYING SUCH RESIDENT, (II) THE AMOUNT OF SUCH ACCUMULATION DISTRIB-
UTION, AND (III) SUCH OTHER INFORMATION AS THE COMMISSIONER MAY REQUIRE.
  (2) EVERY RESIDENT TRUST THAT DOES NOT FILE  THE  RETURN  REQUIRED  BY
SECTION  SIX HUNDRED FIFTY-ONE OF THIS PART ON THE GROUND THAT IT IS NOT
SUBJECT TO TAX PURSUANT  TO  SUBPARAGRAPH  (D)  OF  PARAGRAPH  THREE  OF
SUBSECTION (B) OF SECTION SIX HUNDRED FIVE OF THIS ARTICLE FOR THE TAXA-
BLE  YEAR  SHALL  MAKE A RETURN FOR SUCH TAXABLE YEAR SUBSTANTIATING ITS
ENTITLEMENT TO THAT EXEMPTION AND PROVIDING SUCH  OTHER  INFORMATION  AS
THE COMMISSIONER MAY REQUIRE.
  (3)  THE  RETURNS  REQUIRED  BY  THIS  SUBSECTION SHALL BE FILED ON OR
BEFORE THE FIFTEENTH DAY OF THE FOURTH MONTH FOLLOWING THE CLOSE OF EACH
TAXABLE YEAR. FOR PURPOSES OF THIS PARAGRAPH,  "TAXABLE  YEAR"  MEANS  A
YEAR  OR  A PERIOD WHICH WOULD BE A TAXABLE YEAR OF THE TRUST IF IT WERE
SUBJECT TO TAX UNDER THIS ARTICLE.
  S 5. Paragraph 2 of subsection (h) of section 685 of the tax  law,  as
amended  by  chapter  190  of  the  laws  of 1990, is amended to read as
follows:
  (2) If any partnership [or], S corporation, OR TRUST required to  file
a return or report under subsection (c) OR SUBSECTION (F) of section six
hundred  fifty-eight  or  under  section  six hundred fifty-nine OF THIS
ARTICLE for any taxable year fails to file such return or report at  the
time  prescribed  therefor  (determined  with regard to any extension of
time for filing), or files a return or report which fails  to  show  the
information  required  under  such subsection (c) or section six hundred
fifty-nine OF THIS ARTICLE, unless it is shown that such failure is  due
to  reasonable  cause  and not due to willful neglect, there shall, upon
notice and demand by the commissioner and in the same manner as tax,  be
paid  by  the  partnership or S corporation a penalty for each month (or
fraction thereof) during which such failure continues (but not to exceed
five months). The amount of such penalty for any month is the product of
fifty dollars, multiplied by the number of partners in  the  partnership
or shareholders in the S corporation during any part of the taxable year
who were subject to tax under this article during any part of such taxa-
ble  year,  EXCEPT  THAT,  IN  THE CASE OF A TRUST, THE PENALTY SHALL BE

S. 6359                            173                           A. 8559

EQUAL TO ONE HUNDRED FIFTY DOLLARS A MONTH UP TO A  MAXIMUM  OF  FIFTEEN
HUNDRED DOLLARS PER TAXABLE YEAR.
  S  6. Subdivision (b) of section 11-1712 of the administrative code of
the city of New York is amended by adding a new paragraph 36 to read  as
follows:
  (36)  IN  THE  CASE OF A BENEFICIARY OF A NONRESIDENT TRUST OR A TRUST
NOT SUBJECT TO TAX PURSUANT TO SUBPARAGRAPH (D) OF  PARAGRAPH  THREE  OF
SUBSECTION  (B) OF SECTION 11-1705 OF THIS CHAPTER (EXCEPT FOR AN INCOM-
PLETE GIFT NON-GRANTOR TRUST, AS DEFINED BY  PARAGRAPH  THIRTY-SEVEN  OF
THIS  SUBDIVISION),  THE  AMOUNT  OF  ANY  ACCUMULATION  DISTRIBUTION AS
DESCRIBED IN SUBSECTION (B) OF SECTION SIX  HUNDRED  SIXTY-FIVE  OF  THE
INTERNAL  REVENUE  CODE  FOR  THE TAX YEAR, SUCH AMOUNT TO BE DETERMINED
WITHOUT REGARD TO THE  PENULTIMATE  SENTENCE  OF  SUCH  SUBSECTION  THAT
REFERENCES  SECTION  SIX  HUNDRED  SIXTY-SEVEN  OF SUCH CODE AND WITHOUT
REGARD TO SUBSECTION (C) OF SECTION SIX HUNDRED SIXTY-FIVE OF THE INTER-
NAL REVENUE CODE, TO THE EXTENT NOT ALREADY INCLUDED  IN  FEDERAL  GROSS
INCOME FOR THE TAX YEAR.
  S  7. Subdivision (b) of section 11-1712 of the administrative code of
the city of New York is amended by adding a new paragraph 37 to read  as
follows:
  (37)  IN  THE CASE OF A TAXPAYER WHO TRANSFERRED PROPERTY TO AN INCOM-
PLETE GIFT  NON-GRANTOR  TRUST,  THE  INCOME  OF  THE  TRUST,  LESS  ANY
DEDUCTIONS  OF  SUCH  TRUST, TO THE EXTENT SUCH INCOME AND DEDUCTIONS OF
SUCH TRUST WOULD BE TAKEN  INTO  ACCOUNT  IN  COMPUTING  THE  TAXPAYER'S
FEDERAL  TAXABLE  INCOME IF SUCH TRUST IN ITS ENTIRETY WERE TREATED AS A
GRANTOR TRUST FOR FEDERAL TAX PURPOSES. FOR PURPOSES OF THIS  PARAGRAPH,
AN "INCOMPLETE GIFT NON-GRANTOR TRUST" MEANS A RESIDENT TRUST THAT MEETS
THE  FOLLOWING  CONDITIONS:  (I) THE TRUST DOES NOT QUALIFY AS A GRANTOR
TRUST UNDER SECTION SIX HUNDRED SEVENTY-ONE THROUGH SIX  HUNDRED  SEVEN-
TY-NINE  OF THE INTERNAL REVENUE CODE, AND (2) THE GRANTOR'S TRANSFER OF
ASSETS TO THE TRUST IS TREATED AS AN INCOMPLETE GIFT UNDER SECTION TWEN-
TY FIVE HUNDRED ELEVEN OF THE INTERNAL REVENUE CODE, AND THE REGULATIONS
THEREUNDER.
  S 8. Section 11-1721 of the administrative code of  the  city  of  New
York, subdivisions (a) and (b) as amended by section 72 and such section
as  renumbered  by  section  43  of  chapter 639 of the laws of 1986, is
amended to read as follows:
  S 11-1721 [Credit] CREDITS to trust beneficiary receiving accumulation
distribution. (a) General. A city resident beneficiary of a trust  whose
city  adjusted  gross  income  includes  all  or part of an accumulation
distribution by such trust, as defined in section six hundred sixty-five
of the internal revenue code, INCLUDING A BENEFICIARY WHO IS REQUIRED TO
MAKE THE MODIFICATION REQUIRED BY PARAGRAPH  THIRTY-SIX  OF  SUBDIVISION
(B) OF SECTION 11-1712 OF THIS SUBCHAPTER, shall be allowed (1) a credit
against  the  tax  otherwise due under this chapter for all or a propor-
tionate part of any tax paid by the trust under this  chapter  or  under
FORMER  title  T  of chapter forty-six of this code, as it was in effect
prior to September first, nineteen hundred eighty-six, for any preceding
taxable year which would not have been payable if the trust had in  fact
made  distributions to its beneficiaries at the times and in the amounts
specified in section six hundred sixty-six of the internal revenue code;
AND (2) A CREDIT AGAINST THE TAXES IMPOSED BY THIS CHAPTER FOR THE TAXA-
BLE YEAR FOR ANY INCOME TAX IMPOSED FOR THE TAXABLE YEAR  OR  ANY  PRIOR
TAXABLE YEAR BY ANOTHER STATE OF THE UNITED STATES, A POLITICAL SUBDIVI-
SION  THEREOF,  OR  THE  DISTRICT  OF COLUMBIA, UPON INCOME BOTH DERIVED
THEREFROM AND SUBJECT TO TAX  UNDER  THIS  CHAPTER,  PROVIDED  THAT  THE

S. 6359                            174                           A. 8559

AMOUNT  OF  THE CREDIT SHALL NOT EXCEED THE PERCENTAGE OF THE TAX OTHER-
WISE DUE UNDER THIS CHAPTER DETERMINED BY DIVIDING THE  PORTION  OF  THE
INCOME  THAT IS BOTH TAXABLE TO THE TRUST IN SUCH OTHER JURISDICTION AND
TAXABLE TO THE BENEFICIARY UNDER THIS CHAPTER BY THE TOTAL AMOUNT OF THE
BENEFICIARY'S NEW YORK CITY INCOME.
  (b)  Limitation.  The  [credit]  CREDITS  under this section shall not
reduce the tax otherwise due from the beneficiary under this chapter  to
an amount less than would have been due if the accumulation distribution
or  his  or her part thereof were excluded from his or her city adjusted
gross income.
  S 9. This act shall take effect immediately and shall apply to taxable
years beginning on or after January 1, 2014, provided that sections  one
and  six  of  this  act  shall not apply to income of an exempt resident
trust paid to a beneficiary before June 1, 2014, and  sections  two  and
seven  of this act shall not apply to income from a trust that is liqui-
dated before June 1, 2014.

                                 PART J

  Section 1. Section 602 of the tax law is REPEALED.
  S 2. Paragraph 4 of subsection (c) and paragraph 4 of  subsection  (d)
of section 606 of the tax law, paragraph 4 of subsection (c) as added by
chapter  309  of  the  laws of 1996 and paragraph 4 of subsection (d) as
amended by chapter 2 of the  laws  of  1995,  are  amended  to  read  as
follows:
  (4) Part-year residents. In the case of a part-year resident taxpayer,
the credit under this subsection shall be allowed against the tax deter-
mined  under  subsections  (a)  through  (d)  of section six hundred one
reduced by the credit permitted under subsection (b)  of  this  section,
and  any  excess  credit after such application shall be allowed against
the [taxes] TAX imposed by [sections six hundred two  and]  SECTION  six
hundred  three.  Any  remaining excess, after such application, shall be
refunded as provided in paragraph two hereof,  provided,  however,  that
any  overpayment  under such paragraph shall be limited to the amount of
the remaining excess multiplied by a fraction, the numerator of which is
federal adjusted gross income for the period of residence,  computed  as
if  the taxable year for federal income tax purposes were limited to the
period of residence, and the denominator of which  is  federal  adjusted
gross income for the taxable year.
  (4) Part-year residents. In the case of a part-year resident taxpayer,
the credit under this subsection shall be allowed against the tax deter-
mined  under  subsections  (a)  through  (d)  of section six hundred one
reduced by the credits permitted under subsections (b), (c) and  (m)  of
this  section,  and  any  excess  credit after such application shall be
allowed against the [taxes] TAX imposed by  [sections  six  hundred  two
and]  SECTION six hundred three. Any remaining excess, after such appli-
cation, shall be refunded as provided in paragraph two hereof, provided,
however, that any overpayment under such paragraph shall be  limited  to
the amount of the remaining excess multiplied by a fraction, the numera-
tor  of  which  is federal adjusted gross income for the period of resi-
dence, computed as if the taxable year for federal income  tax  purposes
were limited to the period of residence, and the denominator of which is
federal adjusted gross income for the taxable year.
  S 3. Section 622 of the tax law is REPEALED.
  S 4. Section 636 of the tax law is REPEALED.

S. 6359                            175                           A. 8559

  S  5.  Subsections  (a), (b) and (c) of section 639 of the tax law, as
added by chapter 170 of the  laws  of  1994,  are  amended  to  read  as
follows:
  (a)  If  an  individual changes status from resident to nonresident he
shall, regardless of his method of accounting, accrue to the  period  of
residence  any  items  of  income,  gain, loss, deduction, [items of tax
preference] or ordinary income portion of a lump sum distribution accru-
ing prior to the change of status, with the applicable modifications and
adjustments to federal adjusted gross income[,] AND itemized  deductions
[and  items  of tax preference] under sections six hundred twelve[,] AND
six hundred fifteen [and six hundred twenty-two], if not otherwise prop-
erly includible or allowable for New York income tax purposes  for  such
period or a prior taxable year under his method of accounting.
  (b)  If  an  individual changes status from nonresident to resident he
shall, regardless of his method of accounting, accrue to the  period  of
nonresidence any items of income, gain, loss or deduction, [items of tax
preference] or ordinary income portion of a lump sum distribution accru-
ing prior to the change of status, with the applicable modifications and
adjustments  to federal adjusted gross income[,] AND itemized deductions
[and items of tax preference] under sections six hundred  twelve[,]  AND
six  hundred  fifteen  [and  six  hundred  twenty-two], other than items
derived from or connected with New York sources, if not otherwise  prop-
erly  includible  or allowable for New York income tax purposes for such
period or for a prior taxable year under his method of accounting.
  (c) No item of income, gain, loss, deduction,  [item  of  tax  prefer-
ence,]  ordinary  income portion of a lump sum distribution or modifica-
tion or adjustment which is accrued under this section  shall  be  taken
into  account  in  determining the tax under this article for any subse-
quent taxable year.
  S 6. Paragraphs 1, 2, 3 and 4 of subsection (a) of section 651 of  the
tax  law,  paragraph  1  as  amended by chapter 333 of the laws of 1987,
paragraph 2 as amended by chapter 28 of the laws of 1987, and paragraphs
3 and 4 as amended by chapter 170 of the laws of 1994,  are  amended  to
read as follows:
  (1)  every  resident  individual (A) required to file a federal income
tax return for the taxable year, or (B) having  federal  adjusted  gross
income  for  the  taxable  year,  increased  by  the modifications under
subsection (b) of section six hundred twelve, in excess of four thousand
dollars, or in excess of his New York standard deduction, if  lower,  or
(C)  [subject  to  tax  under  section  six  hundred two, or (D)] having
received during the taxable year a lump sum distribution any portion  of
which is subject to tax under section six hundred three;
  (2)  every  resident estate or trust required to file a federal income
tax return for the taxable year, or having any New York  taxable  income
for the taxable year, determined under section six hundred eighteen, [or
subject to tax under section six hundred two,] or having received during
the taxable year a lump sum distribution any portion of which is subject
to tax under section six hundred three;
  (3) every nonresident or part-year resident individual having New York
source  income  for  the taxable year, determined under part III of this
article, and having New York adjusted gross income for the taxable year,
determined under part II of this article, in excess  of  the  taxpayer's
New  York  standard  deduction,  [or  subject  to  tax under section six
hundred two,] or having received during the  taxable  year  a  lump  sum
distribution  any  portion  of which is subject to tax under section six
hundred three; and

S. 6359                            176                           A. 8559

  (4) every nonresident estate or  trust  or  part-year  resident  trust
having  New  York  source  income for the taxable year, determined under
part III of this article, and having New York adjusted gross income  for
the  taxable  year, determined under paragraph four of subsection (e) of
section  six  hundred  one, [or subject to tax under section six hundred
two,] or having received during the taxable year a lump sum distribution
any portion of which is subject to tax under section six hundred three.
  S 7. Paragraph 6 of subsection (b) of section 654 of the tax  law,  as
added  by  section  5  of  part Q of chapter 407 of the laws of 1999, is
amended to read as follows:
  (6) In subparagraph (B) of paragraph two of subsection (d), the phrase
"section 1 or 55" shall be read as "section  six  hundred  one  [or  six
hundred two] of this article".
  S 8. Section 659 of the tax law, as amended by chapter 577 of the laws
of 1997, is amended to read as follows:
  S  659.   Report of federal changes, corrections or disallowances.  If
the amount of a taxpayer's federal taxable income, [federal items of tax
preference,] total taxable amount or ordinary income portion of  a  lump
sum  distribution  or includible gain of a trust reported on his federal
income tax return for any taxable year, or the amount  of  a  taxpayer's
earned income credit or credit for employment-related expenses set forth
on  such return, or the amount of any federal foreign tax credit affect-
ing the calculation of the credit for Canadian  provincial  taxes  under
section  six  hundred twenty or six hundred twenty-A of this article, or
the amount of any claim of right adjustment, is changed or corrected  by
the  United States internal revenue service or other competent authority
or as the result of a renegotiation of a contract  or  subcontract  with
the  United  States, or the amount an employer is required to deduct and
withhold from wages for  federal  income  tax  withholding  purposes  is
changed  or  corrected  by  such service or authority or if a taxpayer's
claim for credit or refund of federal income tax is disallowed in  whole
or  in  part,  the  taxpayer  or  employer  shall  report such change or
correction or disallowance within ninety days after the  final  determi-
nation  of such change, correction, renegotiation or disallowance, or as
otherwise required by the commissioner, and shall concede  the  accuracy
of  such  determination or state wherein it is erroneous.  The allowance
of a tentative carryback adjustment based  upon  a  net  operating  loss
carryback  pursuant to section sixty-four hundred eleven of the internal
revenue code shall be treated as a final determination for  purposes  of
this  section.  Any taxpayer filing an amended federal income tax return
and any employer filing an amended federal return of income tax withheld
shall also file within ninety days thereafter an  amended  return  under
this  article,  and  shall give such information as the commissioner may
require.  The commissioner may by regulation prescribe  such  exceptions
to the requirements of this section as he or she deems appropriate.  For
purposes  of this section, (i) the term "taxpayer" shall include a part-
nership having a resident partner or having any income derived from  New
York  sources,  and a corporation with respect to which the taxable year
of such change, correction, disallowance or amendment  is  a  year  with
respect  to which the election provided for in subsection (a) of section
six hundred sixty of this article  is  in  effect,  and  (ii)  the  term
"federal income tax return" shall include the returns of income required
under  sections six thousand thirty-one and six thousand thirty-seven of
the internal revenue code.   In the case of  such  a  corporation,  such
report  shall  also  include  any  change  or  correction  of  the taxes
described in paragraphs two and three of subsection (f) of section thir-

S. 6359                            177                           A. 8559

teen hundred sixty-six of the internal revenue code.  Reports made under
this section by a partnership or corporation shall indicate the  portion
of  the  change in each item of income, gain, loss or deduction (and, in
the case of a corporation, of each change in, or disallowance of a claim
for  credit  or  refund of, a tax referred to in the preceding sentence)
allocable to each partner or shareholder and shall set forth such  iden-
tifying  information  with respect to such partner or shareholder as may
be prescribed by the commissioner.
  S 9. Subsection (d) of section 683 of the tax law, as amended by chap-
ter 170 of the laws of 1994, is amended to read as follows:
  (d) Omission of income, [item of tax preference,] total taxable amount
or ordinary income portion of a lump sum  distribution  on  return.--The
tax  may  be  assessed at any time within six years after the return was
filed if--
  (1) an individual omits from his New York adjusted gross income,  [the
sum  of  his  items  of  tax preference,] or the total taxable amount or
ordinary income portion of a lump sum distribution  an  amount  properly
includible  therein  which  is  in  excess of twenty-five percent of the
amount of New York adjusted gross income, [the sum of the items  of  tax
preference,] or the total taxable amount or ordinary income portion of a
lump sum distribution stated in the return, or
  (2)  an estate or trust omits from its New York adjusted gross income,
[the sum of its items of tax preference,] or the total taxable amount or
ordinary income portion of a lump sum distribution  an  amount  properly
includible  therein  which  is  in  excess of twenty-five percent of the
amount stated in the return of New York adjusted gross income determined
in accordance with paragraph four  of  subsection  (e)  of  section  six
hundred  one,  [or the sum of the items of tax preference,] or the total
taxable amount or ordinary income portion of a  lump  sum  distribution,
respectively.  For  purposes of this subsection there shall not be taken
into account any amount which is omitted in the return if such amount is
disclosed in the return, or in a statement attached to the return, in  a
manner  adequate to apprise the commissioner of the nature and amount of
the item of income, [tax preference,] total taxable amount  or  ordinary
income portion of a lump sum distribution.
  S 10. Subparagraph (B) of paragraph 4 of subsection (c) of section 685
of the tax law, as amended by chapter 28 of the laws of 1987, is amended
to read as follows:
  (B)  Determination  of  annualized income installment.--In the case of
any required installment,  the  annualized  income  installment  is  the
excess,  if  any, of an amount equal to the applicable percentage of the
tax for the taxable year computed by placing on an annualized basis  the
taxable  income  [and  minimum taxable income] for months in the taxable
year ending before the due date for the installment, over the  aggregate
amount  of  any  prior  required  installments for the taxable year. The
applicable percentage of  the  tax  shall  be  twenty-two  and  one-half
percent  in the case of the first installment, forty-five percent in the
case of the second installment, sixty-seven and one-half percent in  the
case  of  the  third  installment  and ninety percent in the case of the
fourth installment, and shall be computed without regard to any increase
in the rates applicable to the taxable year  unless  such  increase  was
enacted at least thirty days prior to the due date of the installment.
  S  11. Paragraphs 2 and 3 of subsection (a) of section 1301 of the tax
law, as amended by chapter 209 of the laws of 2011, are amended to  read
as follows:

S. 6359                            178                           A. 8559

  (2)  [for  taxable years beginning before two thousand fifteen, a city
minimum income tax on such residents, and
  (3)] for taxable years beginning after nineteen hundred seventy-six, a
separate tax on the ordinary income portion of lump sum distributions of
such  residents,  at  the  rates  provided  for herein, such taxes to be
administered, collected and distributed by the commissioner as  provided
for in this article.
  S 12. Section 1301-A of the tax law is REPEALED.
  S  13.  Subsection  (a)  of section 1302 of the tax law, as amended by
chapter 333 of the laws of 1987, is amended to read as follows:
  (a) Imposition of tax. The city personal income tax  (other  than  the
[city  minimum  income  tax  and  the] city separate tax on the ordinary
income portion of  lump  sum  distributions)  imposed  pursuant  to  the
authority  of this article shall be imposed for each taxable year on the
city taxable income of every city resident individual, estate and trust.
A taxpayer's taxable year for purposes of a tax imposed pursuant to  the
authority  of  this  article shall be the same as his taxable year under
article twenty-two of this chapter.
  S 14. The opening paragraph of subsection (a) of section 1304  of  the
tax  law, as amended by section 134 of part A of chapter 389 of the laws
of 1997, is amended to read as follows:
  A tax (other than the [city minimum income tax, the] city separate tax
relating to qualified higher education funds and the city  separate  tax
on the ordinary income portion of lump sum distributions) imposed pursu-
ant  to  the  authority  of section thirteen hundred one of this article
shall be determined as follows:
  S 15. Subsection (c) of section 1307 of the tax  law,  as  amended  by
chapter 712 of the laws of 2004, is amended to read as follows:
  (c)  When  an individual changes his status from city resident to city
nonresident, or from  city  nonresident  to  city  resident,  he  shall,
regardless  of  his  method  of  accounting, accrue any items of income,
gain, loss, deduction[, items of  tax  preference]  or  ordinary  income
portion  of  a  lump  sum  distribution  accruing prior to the change of
status, with the applicable modifications  and  adjustments  to  federal
adjusted gross income[,] AND itemized deductions [and items of tax pref-
erence]  under  sections  six  hundred twelve[,] AND six hundred fifteen
[and six hundred twenty-two], if not otherwise  properly  includible  or
allowable  for  New  York income tax purposes for such period or a prior
taxable year under his method of accounting. Such accruals shall be made
as provided in section six hundred thirty-nine of this chapter.
  S 16. Subsection (a) of section 1306 of the tax  law,  as  amended  by
chapter 333 of the laws of 1987, is amended to read as follows:
  (a)  General.  On  or  before  the  fifteenth  day of the fourth month
following the close of a taxable year, an income tax return under a city
tax imposed pursuant to the authority of this article shall be made  and
filed by or for every city resident individual, estate or trust required
to  file  a  New  York  state  personal income tax (including [a minimum
income tax and] a city separate tax on the ordinary  income  portion  of
lump sum distributions) return for the taxable year.
  S  17.  Section  11-1702 of the administrative code of the city of New
York is REPEALED.
  S 18. Subdivision (a) of section 11-1704 of the administrative code of
the city of New York, as amended by chapter 17 of the laws of  1997,  is
amended to read as follows:
  (a)  In  addition  to the taxes imposed by sections 11-1701[, 11-1702]
and 11-1703, there is hereby imposed for  each  taxable  year  beginning

S. 6359                            179                           A. 8559

after  nineteen  hundred eighty-nine but before nineteen hundred ninety-
nine, a tax surcharge on the city taxable income of every city  resident
individual, estate and trust.
  S 19. Subdivision (c) of section 11-1704 of the administrative code of
the  city of New York, as amended by chapter 271 of the laws of 1991, is
amended to read as follows:
  (c) The tax surcharge imposed pursuant to this section shall be admin-
istered, collected and distributed by the commissioner of  taxation  and
finance  in  the  same  manner as the taxes imposed pursuant to sections
11-1701[, 11-1702] and 11-1703, and all of the provisions of this  chap-
ter, including sections 11-1706, 11-1721 and 11-1773, shall apply to the
tax surcharge imposed by this section.
  S  20.  Section  11-1722 of the administrative code of the city of New
York is REPEALED.
  S 21. Subdivision (a) of section 11-1751 of the administrative code of
the city of New York, as amended by chapter 333 of the laws of 1987,  is
amended to read as follows:
  (a)  General.  On  or  before  the  fifteenth  day of the fourth month
following the close of a taxable year, an income tax return  under  this
chapter  shall  be made and filed by or for every city resident individ-
ual, estate or trust required to file a New York state  personal  income
tax  (including  a [minimum income tax and] separate tax on the ordinary
income portion of lump sum distributions) return for the taxable year.
  S 22. Subdivision (b) of section 11-1754 of the administrative code of
the city of New York, as amended by chapter 712 of the laws of 2004,  is
amended to read as follows:
  (b)  City  taxable  income  [and  city minimum taxable income] as city
resident. The city taxable income [and city minimum taxable income]  for
the  portion of the year during which he or she is a city resident shall
be determined, except as provided in subdivision (c), as if his  or  her
taxable  year for federal income tax purposes were limited to the period
of his or her city resident status.
  S 23. Paragraph 6 of subdivision (b) of section 11-1755 of the  admin-
istrative code of the city of New York, as added by section 17 of part Q
of chapter 407 of the laws of 1999, is amended to read as follows:
  (6) In subparagraph (B) of paragraph two of subsection (d), the phrase
"section 1 or 55" shall be read as "section 11-1701 [or 11-1702] of this
chapter".
  S  24.  Section  11-1759 of the administrative code of the city of New
York, as amended by chapter 577 of the laws of 1997, is amended to  read
as follows:
  S  11-1759 Report of federal changes, corrections or disallowances. If
the amount of a taxpayer's federal taxable income, [federal items of tax
preference,] total taxable amount or ordinary income portion of  a  lump
sum  distribution  or includible gain of a trust reported on his federal
income tax return for any taxable year, or the amount of  any  claim  of
right  adjustment, is changed or corrected by the United States internal
revenue service or other competent authority, or  as  the  result  of  a
renegotiation of a contract or subcontract with the United States or the
amount  an  employer  is  required to deduct and withhold from wages for
federal income tax withholding purposes is changed or corrected by  such
service  or  authority  or if a taxpayer's claim for credit or refund of
federal income tax is disallowed in whole or in part,  the  taxpayer  or
employer  shall  report such change or correction or disallowance within
ninety days after the final determination of  such  change,  correction,
renegotiation,  or disallowance, or as otherwise required by the commis-

S. 6359                            180                           A. 8559

sioner, and shall concede the accuracy of such  determination  or  state
wherein  it is erroneous. The allowance of a tentative carryback adjust-
ment based upon a net  operating  loss  carryback  pursuant  to  section
sixty-four  hundred eleven of the internal revenue code shall be treated
as a final determination for purposes  of  this  section.  Any  taxpayer
filing  an  amended federal income tax return and any employer filing an
amended federal return of income tax withheld  shall  also  file  within
ninety  days  thereafter an amended return under this chapter, and shall
give such information as the commissioner may require. The  commissioner
may  by regulation prescribe such exceptions to the requirements of this
section as he or she deems appropriate. For purposes  of  this  section,
(i)  the  term  "taxpayer" shall include a partnership having a resident
partner or having any income derived from New York sources, and a corpo-
ration  with  respect  to  which  the  taxable  year  of  such   change,
correction,  disallowance  or  amendment is a year with respect to which
the election provided for in subsection (a) of section six hundred sixty
of the tax law is in effect, and  (ii)  the  term  "federal  income  tax
return"  shall include the returns of income required under sections six
thousand thirty-one and six thousand thirty-seven of the internal reven-
ue code. In the case of such  a  corporation,  such  report  shall  also
include  any  change  or correction of the taxes described in paragraphs
two and three of subsection (f) of section thirteen hundred sixty-six of
the internal revenue code. Reports made under this section by a partner-
ship or corporation shall indicate the portion of  the  change  in  each
item  of  income,  gain, loss or deduction (and, in the case of a corpo-
ration, of each change in, or disallowance of  a  claim  for  credit  or
refund  of,  a  tax  referred to in the preceding sentence) allocable to
each partner or shareholder and shall set forth such identifying  infor-
mation  with respect to such partner or shareholder as may be prescribed
by the commissioner.
  S 25. Subdivision (d) of section 11-1783 of the administrative code of
the city of New York, as amended by chapter 170 of the laws of 1994,  is
amended to read as follows:
  (d) Omission of income, [item of tax preference,] total taxable amount
or ordinary income portion of a lump sum distribution on return. The tax
may  be assessed at any time within six years after the return was filed
if:
  (1) an individual omits from his city adjusted gross income[, the  sum
of his items of tax preference, or] the total taxable amount or ordinary
income  portion of a lump sum distribution an amount properly includible
therein which is in excess of twenty-five percent of the amount of  city
adjusted  gross  income[, the sum of the items of tax preference] or the
total taxable amount or ordinary income portion of a lump  sum  distrib-
ution stated in the return, or
  (2) an estate or trust omits from its city adjusted gross income, [the
sum  of  its  items  of  tax preference,] or the total taxable amount or
ordinary income portion of a lump sum distribution  an  amount  properly
includible  therein  which  is  in  excess of twenty-five percent of the
amount stated in the return of city adjusted gross income, [or  the  sum
of the items of tax preference,] or the total taxable amount or ordinary
income portion of a lump sum distribution, respectively. For purposes of
this paragraph, city adjusted gross income means New York adjusted gross
income  as  determined under paragraph four of subsection (e) of section
six hundred one of the tax law.
  For purposes of this subdivision there shall not be taken into account
any amount which is omitted in the return if such amount is disclosed in

S. 6359                            181                           A. 8559

the return, or in a statement  attached  to  the  return,  in  a  manner
adequate  to  apprise  the  commissioner of the nature and amount of the
item of income, [tax preference,] the total taxable amount  or  ordinary
income portion of a lump sum distribution.
  S  26.  Subparagraph  (B) of paragraph 4 of subdivision (c) of section
11-1785 of the administrative code of the city of New York,  as  amended
by chapter 333 of the laws of 1987, is amended to read as follows:
  (B) Determination of annualized income installment. In the case of any
required  installment,  the annualized income installment is the excess,
if any, of an amount equal to the applicable percentage of the  tax  for
the  taxable year computed by placing on an annualized basis the taxable
income [and minimum taxable income]  for  months  in  the  taxable  year
ending  before  the  due  date  for  the installment, over the aggregate
amount of any prior required installments  for  the  taxable  year.  The
applicable  percentage  of  the  tax  shall  be  twenty-two and one-half
percent in the case of the first installment, forty-five percent in  the
case  of the second installment, sixty-seven and one-half percent in the
case of the third installment and ninety percent  in  the  case  of  the
fourth installment, and shall be computed without regard to any increase
in  the  rates  applicable  to the taxable year unless such increase was
enacted at least thirty days prior to the due date of the installment.
  S 27. This act shall take effect  immediately  and  apply  to  taxable
years beginning on or after January 1, 2014.

                                 PART K

  Section  1.  Subsection  (e-1) of section 606 of the tax law is relet-
tered subsection (e-2).
  S 2. Section 606 of the tax law is amended by adding a new  subsection
(e-1) to read as follows:
  (E-1)  ENHANCED  REAL  PROPERTY  TAX  CIRCUIT  BREAKER CREDIT. (1) FOR
PURPOSES OF THIS SUBSECTION:
  (A) "QUALIFIED TAXPAYER" MEANS A RESIDENT INDIVIDUAL OF THE STATE  WHO
HAS  OCCUPIED  THE  SAME RESIDENCE FOR SIX MONTHS OR MORE OF THE TAXABLE
YEAR, AND IS REQUIRED OR CHOOSES TO FILE A RETURN UNDER THIS ARTICLE.
  (B) "HOUSEHOLD" OR  "MEMBERS  OF  THE  HOUSEHOLD"  MEANS  A  QUALIFIED
TAXPAYER  AND  ALL  OTHER PERSONS, NOT NECESSARILY RELATED, WHO HAVE THE
SAME RESIDENCE AND SHARE ITS FURNISHINGS, FACILITIES AND ACCOMMODATIONS.
SUCH TERMS SHALL NOT INCLUDE A TENANT, SUBTENANT, ROOMER OR BOARDER  WHO
IS  NOT  RELATED  TO  THE  QUALIFIED TAXPAYER IN ANY DEGREE SPECIFIED IN
PARAGRAPHS ONE THROUGH EIGHT OF SUBSECTION (A) OF  SECTION  ONE  HUNDRED
FIFTY-TWO  OF  THE  INTERNAL REVENUE CODE.  PROVIDED, HOWEVER, NO PERSON
MAY BE A MEMBER OF MORE THAN ONE HOUSEHOLD AT ONE TIME.
  (C) "HOUSEHOLD GROSS INCOME" MEANS THE AGGREGATE ADJUSTED GROSS INCOME
OF ALL MEMBERS OF THE HOUSEHOLD FOR THE TAXABLE  YEAR  AS  REPORTED  FOR
FEDERAL  INCOME  TAX  PURPOSES,  OR  WHICH WOULD BE REPORTED AS ADJUSTED
GROSS INCOME IF A FEDERAL INCOME TAX RETURN WERE REQUIRED TO  BE  FILED,
WITH  THE  MODIFICATIONS IN SUBSECTION (B) OF SECTION SIX HUNDRED TWELVE
OF THIS ARTICLE BUT WITHOUT THE MODIFICATIONS IN SUBSECTION (C) OF  SUCH
SECTION, PLUS ANY PORTION OF THE GAIN FROM THE SALE OR EXCHANGE OF PROP-
ERTY  OTHERWISE  EXCLUDED  FROM  SUCH AMOUNT; EARNED INCOME FROM SOURCES
WITHOUT THE UNITED  STATES  EXCLUDABLE  FROM  FEDERAL  GROSS  INCOME  BY
SECTION  NINE HUNDRED ELEVEN OF THE INTERNAL REVENUE CODE; SUPPORT MONEY
NOT INCLUDED IN  ADJUSTED  GROSS  INCOME;  NONTAXABLE  STRIKE  BENEFITS;
SUPPLEMENTAL  SECURITY  INCOME PAYMENTS; THE GROSS AMOUNT OF ANY PENSION
OR ANNUITY BENEFITS TO THE EXTENT NOT INCLUDED IN  SUCH  ADJUSTED  GROSS

S. 6359                            182                           A. 8559

INCOME  (INCLUDING, BUT NOT LIMITED TO, RAILROAD RETIREMENT BENEFITS AND
ALL PAYMENTS RECEIVED UNDER THE FEDERAL SOCIAL SECURITY ACT  AND  VETER-
ANS'  DISABILITY  PENSIONS); NONTAXABLE INTEREST RECEIVED FROM THE STATE
OF  NEW  YORK,  ITS AGENCIES, INSTRUMENTALITIES, PUBLIC CORPORATIONS, OR
POLITICAL SUBDIVISIONS (INCLUDING A PUBLIC CORPORATION CREATED  PURSUANT
TO  AGREEMENT OR COMPACT WITH ANOTHER STATE OR CANADA); WORKERS' COMPEN-
SATION; THE GROSS AMOUNT OF "LOSS-OF-TIME" INSURANCE; AND THE AMOUNT  OF
CASH PUBLIC ASSISTANCE AND RELIEF, OTHER THAN MEDICAL ASSISTANCE FOR THE
NEEDY,  PAID  TO OR FOR THE BENEFIT OF THE QUALIFIED TAXPAYER OR MEMBERS
OF HIS OR HER  HOUSEHOLD.  HOUSEHOLD  GROSS  INCOME  SHALL  NOT  INCLUDE
SURPLUS  FOODS  OR  OTHER RELIEF IN KIND OR PAYMENTS MADE TO INDIVIDUALS
BECAUSE OF THEIR STATUS AS VICTIMS OF NAZI  PERSECUTION  AS  DEFINED  IN
P.L.  103-286.  PROVIDED,  FURTHER,  HOUSEHOLD  GROSS  INCOME SHALL ONLY
INCLUDE ALL SUCH INCOME RECEIVED BY ALL MEMBERS OF THE  HOUSEHOLD  WHILE
MEMBERS  OF SUCH HOUSEHOLD. IN COMPUTING HOUSEHOLD GROSS INCOME, THE NET
AMOUNT OF LOSS REPORTED ON FEDERAL SCHEDULE C, D,  E,  OR  F  SHALL  NOT
EXCEED  THREE THOUSAND DOLLARS PER SCHEDULE. IN ADDITION, THE NET AMOUNT
OF ANY OTHER SEPARATE CATEGORY OF LOSS SHALL NOT EXCEED  THREE  THOUSAND
DOLLARS. THE AGGREGATE AMOUNT OF ALL LOSSES INCLUDED IN COMPUTING HOUSE-
HOLD GROSS INCOME SHALL NOT EXCEED FIFTEEN THOUSAND DOLLARS.
  (D)  "RESIDENCE" MEANS A DWELLING IN THIS STATE OWNED BY THE TAXPAYER,
AND SO MUCH OF THE LAND ABUTTING IT,  NOT  EXCEEDING  ONE  ACRE,  AS  IS
REASONABLY  NECESSARY FOR USE OF THE DWELLING AS A HOME, AND MAY CONSIST
OF A PART OF A MULTI-DWELLING  OR  MULTI-PURPOSE  BUILDING  INCLUDING  A
COOPERATIVE  OR  CONDOMINIUM.    RESIDENCE  INCLUDES A TRAILER OR MOBILE
HOME, USED EXCLUSIVELY FOR RESIDENTIAL  PURPOSES  AND  DEFINED  AS  REAL
PROPERTY  PURSUANT TO PARAGRAPH (G) OF SUBDIVISION TWELVE OF SECTION ONE
HUNDRED TWO OF THE REAL PROPERTY TAX LAW.
  (E) "QUALIFYING REAL PROPERTY TAXES" MEANS ALL  REAL  PROPERTY  TAXES,
SPECIAL  AD  VALOREM LEVIES AND SPECIAL ASSESSMENTS, EXCLUSIVE OF PENAL-
TIES AND INTEREST, LEVIED BY A TAXING JURISDICTION WITH A  CAP-COMPLIANT
BUDGET  ON  THE  RESIDENCE  OF  A QUALIFIED TAXPAYER AND PAID DURING THE
TAXABLE YEAR.
  (I) FOR THE PURPOSES OF THIS SUBSECTION, A "CAP-COMPLIANT BUDGET"  FOR
A  SCHOOL DISTRICT SUBJECT TO SECTION TWO THOUSAND TWENTY-THREE-A OF THE
EDUCATION LAW MEANS A BUDGET FOR WHICH THE CHIEF  EXECUTIVE  OFFICER  OF
SUCH  SCHOOL  DISTRICT HAS CERTIFIED, NO LATER THAN THE TWENTY-FIRST DAY
OF THE FISCAL YEAR TO WHICH IT APPLIES, TO THE  STATE  COMPTROLLER,  THE
COMMISSIONER  OF TAXATION AND FINANCE AND THE COMMISSIONER OF EDUCATION,
IN A FORM AND MANNER PRESCRIBED BY THE STATE COMPTROLLER IN CONSULTATION
WITH THE COMMISSIONER OF TAXATION AND FINANCE AND  THE  COMMISSIONER  OF
EDUCATION, THAT THE BUDGET SO ADOPTED DOES NOT EXCEED THE TAX LEVY LIMIT
PRESCRIBED BY SUCH SECTION. A "CAP-COMPLIANT BUDGET" FOR A LOCAL GOVERN-
MENT  SUBJECT TO SECTION THREE-C OF THE GENERAL MUNICIPAL LAW SHALL MEAN
A BUDGET FOR WHICH THE CHIEF EXECUTIVE OFFICER OR BUDGET OFFICER OF SUCH
LOCAL GOVERNMENT UNIT HAS CERTIFIED, NO LATER THAN THE TWENTY-FIRST  DAY
OF THE FISCAL YEAR TO WHICH IT APPLIES, TO THE STATE COMPTROLLER AND THE
COMMISSIONER OF TAXATION AND FINANCE, IN A FORM AND MANNER PRESCRIBED BY
THE  STATE COMPTROLLER IN CONSULTATION WITH THE COMMISSIONER OF TAXATION
AND FINANCE, THAT THE ADOPTED BUDGET OF SUCH LOCAL  GOVERNMENT  DID  NOT
REQUIRE AND THE GOVERNING BODY OF SUCH LOCAL GOVERNMENT DID NOT ENACT OR
APPROVE  A  LOCAL  LAW  OR  RESOLUTION  TO  OVERRIDE  THE TAX LEVY LIMIT
PRESCRIBED BY SUCH SECTION, OR, IF  THE  GOVERNING  BODY  OF  THE  LOCAL
GOVERNMENT  DID  ENACT  A  LOCAL LAW OR APPROVE A RESOLUTION TO OVERRIDE
SUCH TAX LEVY LIMIT, THAT SUCH LOCAL LAW OR RESOLUTION WAS  SUBSEQUENTLY
REPEALED.  IF  A  CERTIFICATION REQUIRED BY THIS PARAGRAPH HAS BEEN MADE

S. 6359                            183                           A. 8559

AND THE ACTUAL TAX LEVY OF THE TAXING JURISDICTION EXCEEDS THE  APPLICA-
BLE  TAX  LEVY  LIMIT,  THE EXCESS AMOUNT SHALL BE PLACED IN RESERVE AND
USED IN THE MANNER PRESCRIBED BY  SUBDIVISION  FIVE  OF  SECTION  TWENTY
THOUSAND  TWENTY-THREE-A  OF  THE  EDUCATION  LAW  OR SUBDIVISION SIX OF
SECTION THREE-C OF THE GENERAL MUNICIPAL LAW, WHICHEVER  IS  APPLICABLE,
EVEN IF A TAX LEVY IN EXCESS OF THE TAX LEVY LIMIT HAD BEEN DULY AUTHOR-
IZED FOR THE APPLICABLE FISCAL YEAR IN ACCORDANCE WITH SUCH SECTION.
  (II)  FOR  TAX  YEAR  TWO  THOUSAND FOURTEEN, ONLY REAL PROPERTY TAXES
LEVIED BY SCHOOL DISTRICTS WITH CAP-COMPLIANT BUDGETS CONSTITUTE  QUALI-
FYING REAL PROPERTY TAXES.
  (III)  IN  A  CITY  WITH  A  POPULATION  OF  ONE  MILLION OR MORE, THE
RESTRICTION IN CLAUSE (I) OF THIS SUBPARAGRAPH THAT TAXES MUST BE LEVIED
BY A TAXING JURISDICTION WITH A CAP-COMPLIANT  BUDGET  DOES  NOT  APPLY.
HOWEVER,  REAL  PROPERTY  TAXES,  SPECIAL AD VALOREM LEVIES, AND SPECIAL
ASSESSMENTS LEVIED BY SUCH CITY SHALL CONSTITUTE QUALIFYING REAL PROPER-
TY TAXES ONLY IF TAXES  LEVIED  IN  THE  STATE  OUTSIDE  SUCH  CITY  ARE
REQUIRED  FOR  PURPOSES  OF THIS CREDIT TO BE LEVIED BY TAXING JURISDIC-
TIONS WITH CAP-COMPLIANT BUDGETS.
  (IV) A QUALIFIED TAXPAYER MAY ELECT TO INCLUDE ANY  ADDITIONAL  AMOUNT
THAT  WOULD  HAVE  BEEN  LEVIED IN THE ABSENCE OF AN EXEMPTION FROM REAL
PROPERTY TAXATION PURSUANT TO SECTION FOUR HUNDRED  SIXTY-SEVEN  OF  THE
REAL  PROPERTY  TAX LAW. IF TENANT-STOCKHOLDERS IN A COOPERATIVE HOUSING
CORPORATION HAVE MET THE REQUIREMENTS OF SECTION TWO HUNDRED SIXTEEN  OF
THE INTERNAL REVENUE CODE BY WHICH THEY ARE ALLOWED A DEDUCTION FOR REAL
ESTATE TAXES, THE AMOUNT OF TAXES SO ALLOWABLE, OR WHICH WOULD BE ALLOW-
ABLE  IF THE TAXPAYER HAD FILED RETURNS ON A CASH BASIS, SHALL BE QUALI-
FYING REAL PROPERTY TAXES. IF A RESIDENCE IS OWNED BY TWO OR MORE  INDI-
VIDUALS  AS JOINT TENANTS OR TENANTS IN COMMON, AND ONE OR MORE THAN ONE
INDIVIDUAL IS NOT A MEMBER OF THE HOUSEHOLD,  QUALIFYING  REAL  PROPERTY
TAXES  IS  THAT  PART  OF SUCH TAXES ON THE RESIDENCE WHICH REFLECTS THE
OWNERSHIP PERCENTAGE OF THE QUALIFIED TAXPAYER AND MEMBERS OF HIS OR HER
HOUSEHOLD. IF A RESIDENCE IS AN INTEGRAL PART OF A LARGER UNIT, QUALIFY-
ING REAL PROPERTY TAXES SHALL BE LIMITED TO THAT AMOUNT  OF  SUCH  TAXES
PAID  AS MAY BE REASONABLY APPORTIONED TO SUCH RESIDENCE. IF A HOUSEHOLD
OWNS AND OCCUPIES TWO OR MORE RESIDENCES DURING DIFFERENT PERIODS IN THE
SAME TAXABLE YEAR, QUALIFYING REAL PROPERTY TAXES SHALL BE  THE  SUM  OF
THE  PRORATED  QUALIFYING REAL PROPERTY TAXES ATTRIBUTABLE TO THE HOUSE-
HOLD DURING THE PERIODS SUCH HOUSEHOLD OCCUPIES EACH OF SUCH RESIDENCES.
IF THE HOUSEHOLD OWNS AND OCCUPIES A RESIDENCE FOR PART OF  THE  TAXABLE
YEAR  AND  RENTS  A  RESIDENCE FOR PART OF THE SAME TAXABLE YEAR, IT MAY
INCLUDE THE PRORATION OF QUALIFYING REAL PROPERTY TAXES ON THE RESIDENCE
OWNED.  PROVIDED, HOWEVER, FOR PURPOSES OF THE CREDIT ALLOWED UNDER THIS
SUBSECTION, QUALIFYING REAL PROPERTY TAXES MAY BE INCLUDED BY  A  QUALI-
FIED  TAXPAYER  ONLY  TO  THE EXTENT THAT SUCH TAXPAYER OR THE SPOUSE OF
SUCH TAXPAYER, OCCUPYING SUCH RESIDENCE  FOR  ONE  HUNDRED  EIGHTY-THREE
DAYS  OR  MORE  OF THE TAXABLE YEAR, OWNS OR HAS OWNED THE RESIDENCE AND
PAID SUCH TAXES.
  (2) A QUALIFIED TAXPAYER SHALL BE ALLOWED  A  CREDIT  AS  PROVIDED  IN
PARAGRAPH THREE HEREOF AGAINST THE TAXES IMPOSED BY THIS ARTICLE REDUCED
BY  THE CREDITS PERMITTED BY THIS ARTICLE. IF THE CREDIT EXCEEDS THE TAX
AS SO REDUCED FOR SUCH YEAR UNDER THIS  ARTICLE,  THE  EXCESS  SHALL  BE
TREATED AS AN OVERPAYMENT, TO BE CREDITED OR REFUNDED, WITHOUT INTEREST.
IF  A  QUALIFIED  TAXPAYER  IS NOT REQUIRED TO FILE A RETURN PURSUANT TO
SECTION SIX HUNDRED FIFTY-ONE OF THIS ARTICLE, A QUALIFIED TAXPAYER  MAY
NEVERTHELESS  RECEIVE  THE  FULL  AMOUNT OF THE CREDIT TO BE CREDITED OR
REFUNDED AS AN OVERPAYMENT, WITHOUT INTEREST.

S. 6359                            184                           A. 8559

  (3) DETERMINATION OF CREDIT. (A) FOR TAXABLE YEARS  BEGINNING  IN  TWO
THOUSAND  FOURTEEN,  THE  AMOUNT  OF  THE  CREDIT  ALLOWABLE  UNDER THIS
SUBSECTION SHALL BE DETERMINED AS FOLLOWS:
IF THE HOUSEHOLD        EXCESS REAL PROPERTY        THE CREDIT AMOUNT IS
GROSS INCOME FOR THE    TAXES ARE THE EXCESS        THE FOLLOWING
TAXABLE YEAR IS:        OF QUALIFYING REAL          PERCENTAGE OF THE
                        PROPERTY TAXES OVER         EXCESS REAL PROPERTY
                        THE FOLLOWING               TAXES:
                        PERCENTAGE OF
                        HOUSEHOLD GROSS INCOME:
LESS THAN $120,000      2.4%                        6.25%
$120,000 TO LESS
THAN $150,000           3.2%                        4.75%
$150,000 TO LESS
THAN $200,000           4.0%                        3.25%
  NOTWITHSTANDING  THE  FOREGOING  PROVISIONS, THE MAXIMUM CREDIT DETER-
MINED UNDER THIS SUBPARAGRAPH MAY NOT EXCEED FIVE HUNDRED DOLLARS.
  (B) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND FIFTEEN, THE AMOUNT OF
THE CREDIT ALLOWABLE  UNDER  THIS  SUBSECTION  SHALL  BE  DETERMINED  AS
FOLLOWS:
IF THE HOUSEHOLD        EXCESS REAL PROPERTY        THE CREDIT AMOUNT IS
GROSS INCOME FOR THE    TAXES ARE THE EXCESS        THE FOLLOWING
TAXABLE YEAR IS:        OF QUALIFYING REAL          PERCENTAGE OF THE
                        PROPERTY TAXES OVER         EXCESS REAL PROPERTY
                        THE FOLLOWING               TAXES:
                        PERCENTAGE OF
                        HOUSEHOLD GROSS INCOME:
LESS THAN $120,000      3.0%                        8.25%
$120,000 TO LESS
THAN $150,000           4.0%                        6.00%
$150,000 TO LESS
THAN $200,000           5.0%                        3.75%
  NOTWITHSTANDING  THE  FOREGOING  PROVISIONS, THE MAXIMUM CREDIT DETER-
MINED UNDER  THIS  SUBPARAGRAPH  MAY  NOT  EXCEED  SEVEN  HUNDRED  FIFTY
DOLLARS.
  (C) FOR TAXABLE YEARS BEGINNING AFTER TWO THOUSAND FIFTEEN, THE AMOUNT
OF  THE  CREDIT  ALLOWABLE  UNDER THIS SUBSECTION SHALL BE DETERMINED AS
FOLLOWS:
IF THE HOUSEHOLD        EXCESS REAL PROPERTY        THE CREDIT AMOUNT IS
GROSS INCOME FOR THE    TAXES ARE THE EXCESS        THE FOLLOWING
TAXABLE YEAR IS:        OF QUALIFYING REAL          PERCENTAGE OF THE
                        PROPERTY TAXES OVER         EXCESS REAL PROPERTY
                        THE FOLLOWING               TAXES:
                        PERCENTAGE OF
                        HOUSEHOLD GROSS INCOME:
LESS THAN $120,000      3.0%                        20.0%
$120,000 TO LESS
THAN $150,000           4.0%                        15.0%
$150,000 TO LESS
THAN $200,000           5.0%                        10.0%
  NOTWITHSTANDING THE FOREGOING PROVISIONS, THE  MAXIMUM  CREDIT  DETER-
MINED UNDER THIS SUBPARAGRAPH MAY NOT EXCEED ONE THOUSAND DOLLARS.
  (4)  IF A QUALIFIED TAXPAYER OCCUPIES A RESIDENCE FOR A PERIOD OF LESS
THAN TWELVE MONTHS DURING THE TAXABLE YEAR OR OCCUPIES TWO OR MORE RESI-
DENCES DURING DIFFERENT PERIODS IN SUCH TAXABLE YEAR, THE CREDIT ALLOWED
PURSUANT TO THIS SUBSECTION SHALL BE COMPUTED  IN  SUCH  MANNER  AS  THE

S. 6359                            185                           A. 8559

COMMISSIONER  MAY  PRESCRIBE  IN ORDER TO PROPERLY REFLECT THE CREDIT OR
PORTION THEREOF ATTRIBUTABLE TO SUCH RESIDENCE OR  RESIDENCES  AND  SUCH
PERIOD OR PERIODS.
  (5)  THE  COMMISSIONER  MAY  PRESCRIBE  THAT  THE  CREDIT  UNDER  THIS
SUBSECTION SHALL BE DETERMINED IN WHOLE OR IN PART BY THE USE OF  TABLES
PRESCRIBED  BY SUCH COMMISSIONER. SUCH TABLES SHALL SET FORTH THE CREDIT
TO THE NEAREST DOLLAR.
  (6) ONLY ONE CREDIT PER HOUSEHOLD AND PER QUALIFIED TAXPAYER SHALL  BE
ALLOWED PER TAXABLE YEAR UNDER THIS SUBSECTION. WHEN TWO OR MORE MEMBERS
OF  A  HOUSEHOLD  ARE  ABLE  TO  MEET THE QUALIFICATIONS FOR A QUALIFIED
TAXPAYER, THE CREDIT SHALL BE EQUALLY  DIVIDED  BETWEEN  OR  AMONG  SUCH
INDIVIDUALS UNLESS SUCH INDIVIDUALS FILE WITH THE COMMISSIONER A WRITTEN
AGREEMENT AMONG SUCH INDIVIDUALS SETTING FORTH A DIFFERENT DIVISION.
  (A)  PROVIDED, HOWEVER, WHERE A JOINT INCOME TAX RETURN HAS BEEN FILED
PURSUANT TO THE PROVISIONS OF SECTION  SIX  HUNDRED  FIFTY-ONE  OF  THIS
ARTICLE  BY  A  QUALIFIED  TAXPAYER AND HIS OR HER SPOUSE (OR WHERE BOTH
SPOUSES ARE QUALIFIED TAXPAYERS AND HAVE FILED SUCH JOINT  RETURN),  THE
CREDIT,  OR  THE  PORTION OF THE CREDIT IF DIVIDED, TO WHICH THE SPOUSES
ARE ENTITLED SHALL BE APPLIED AGAINST THE TAX OF BOTH  SPOUSES  AND  ANY
OVERPAYMENT SHALL BE MADE TO BOTH SPOUSES.
  (B)  WHERE  ANY RETURN REQUIRED TO BE FILED PURSUANT TO THE PROVISIONS
OF SECTION SIX HUNDRED FIFTY-ONE OF THIS ARTICLE IS  COMBINED  WITH  ANY
RETURN  OF  TAX IMPOSED PURSUANT TO THE AUTHORITY OF THIS CHAPTER OR ANY
OTHER LAW IF SUCH TAX IS ADMINISTERED BY THE COMMISSIONER, THE CREDIT OR
THE PORTION OF THE CREDIT IF DIVIDED, ALLOWED TO THE QUALIFIED  TAXPAYER
MAY  BE  APPLIED BY THE COMMISSIONER TOWARD ANY LIABILITY FOR THE AFORE-
MENTIONED TAXES.
  (7) NO CREDIT SHALL BE GRANTED UNDER THIS SUBSECTION:
  (A) IF HOUSEHOLD GROSS INCOME FOR THE TAXABLE YEAR EQUALS  OR  EXCEEDS
TWO HUNDRED THOUSAND DOLLARS.
  (B)  TO A PROPERTY OWNER UNLESS: (I) THE PROPERTY IS USED FOR RESIDEN-
TIAL PURPOSES, (II) NOT MORE THAN TWENTY PERCENT OF THE  RENTAL  INCOME,
IF ANY, FROM THE PROPERTY IS FROM RENTAL FOR NONRESIDENTIAL PURPOSES AND
(III) THE PROPERTY IS OCCUPIED AS A RESIDENCE IN WHOLE OR IN PART BY ONE
OR MORE OF THE OWNERS OF THE PROPERTY.
  (C) TO AN INDIVIDUAL WITH RESPECT TO WHOM A DEDUCTION UNDER SUBSECTION
(C)  OF  SECTION  ONE  HUNDRED FIFTY-ONE OF THE INTERNAL REVENUE CODE IS
ALLOWABLE TO ANOTHER TAXPAYER FOR THE TAXABLE YEAR.
  (D) WITH RESPECT TO A RESIDENCE THAT  IS  WHOLLY  EXEMPTED  FROM  REAL
PROPERTY TAXATION.
  (E) TO AN INDIVIDUAL WHO IS NOT A RESIDENT INDIVIDUAL OF THE STATE FOR
THE ENTIRE TAXABLE YEAR.
  (8) THE RIGHT TO CLAIM A CREDIT OR THE PORTION OF A CREDIT, WHERE SUCH
CREDIT  HAS BEEN DIVIDED UNDER THIS SUBSECTION, SHALL BE PERSONAL TO THE
QUALIFIED TAXPAYER AND SHALL NOT SURVIVE HIS  OR  HER  DEATH,  BUT  SUCH
RIGHT MAY BE EXERCISED ON BEHALF OF A CLAIMANT BY HIS OR HER LEGAL GUAR-
DIAN OR ATTORNEY IN FACT DURING HIS OR HER LIFETIME.
  (9)  RETURNS. IF A QUALIFIED TAXPAYER IS NOT REQUIRED TO FILE A RETURN
PURSUANT TO SECTION SIX HUNDRED FIFTY-ONE OF THIS ARTICLE, A CLAIM FOR A
CREDIT MAY BE TAKEN ON A RETURN FILED WITH THE COMMISSIONER WITHIN THREE
YEARS FROM THE TIME IT WOULD HAVE BEEN REQUIRED THAT A RETURN  BE  FILED
PURSUANT  TO  SUCH SECTION HAD THE QUALIFIED TAXPAYER HAD A TAXABLE YEAR
ENDING ON DECEMBER THIRTY-FIRST.  RETURNS UNDER THIS PARAGRAPH SHALL  BE
IN  SUCH FORM AS SHALL BE PRESCRIBED BY THE COMMISSIONER, WHO SHALL MAKE
AVAILABLE SUCH FORMS AND INSTRUCTIONS FOR FILING SUCH RETURNS.

S. 6359                            186                           A. 8559

  (10) PROOF OF CLAIM. THE COMMISSIONER MAY REQUIRE A QUALIFIED TAXPAYER
TO FURNISH THE FOLLOWING INFORMATION IN SUPPORT OF HIS OR HER CLAIM  FOR
CREDIT  UNDER  THIS  SUBSECTION:  HOUSEHOLD  GROSS INCOME, REAL PROPERTY
TAXES LEVIED OR THAT WOULD  HAVE  BEEN  LEVIED  IN  THE  ABSENCE  OF  AN
EXEMPTION  FROM  REAL  PROPERTY  TAX  PURSUANT  TO  SECTION FOUR HUNDRED
SIXTY-SEVEN OF THE REAL PROPERTY TAX LAW, THE NAMES OF  MEMBERS  OF  THE
HOUSEHOLD  AND  OTHER  QUALIFYING TAXPAYERS OCCUPYING THE SAME RESIDENCE
AND THEIR IDENTIFYING NUMBERS INCLUDING SOCIAL SECURITY NUMBERS,  HOUSE-
HOLD  GROSS INCOME, SIZE AND NATURE OF PROPERTY CLAIMED AS RESIDENCE AND
ALL OTHER INFORMATION WHICH MAY  BE  REQUIRED  BY  THE  COMMISSIONER  TO
DETERMINE THE CREDIT.
  (11)  ADMINISTRATION.  THE  PROVISIONS  OF THIS ARTICLE, INCLUDING THE
PROVISIONS OF SECTION SIX HUNDRED FIFTY-THREE, SIX HUNDRED  FIFTY-EIGHT,
AND  SIX HUNDRED FIFTY-NINE AND THE PROVISIONS OF PART SIX OF THIS ARTI-
CLE RELATING TO PROCEDURE AND  ADMINISTRATION,  INCLUDING  THE  JUDICIAL
REVIEW  OF  THE DECISIONS OF THE COMMISSIONER, EXCEPT SO MUCH OF SECTION
SIX HUNDRED EIGHTY-SEVEN WHICH PERMITS A CLAIM FOR CREDIT OR  REFUND  TO
BE  FILED  AFTER  THE  PERIOD  PROVIDED  FOR  IN  PARAGRAPH NINE OF THIS
SUBSECTION AND EXCEPT SECTIONS  SIX  HUNDRED  FIFTY-SEVEN,  SIX  HUNDRED
EIGHTY-EIGHT  AND  SIX HUNDRED NINETY-SIX, SHALL APPLY TO THE PROVISIONS
OF THIS SUBSECTION IN THE SAME MANNER AND WITH THE SAME FORCE AND EFFECT
AS IF THE LANGUAGE OF THOSE PROVISIONS HAD  BEEN  INCORPORATED  IN  FULL
INTO THIS SUBSECTION AND HAD EXPRESSLY REFERRED TO THE CREDIT ALLOWED OR
RETURNS  FILED UNDER THIS SUBSECTION, EXCEPT TO THE EXTENT THAT ANY SUCH
PROVISION IS EITHER INCONSISTENT WITH A PROVISION OF THIS SUBSECTION  OR
IS  NOT  RELEVANT  TO THIS SUBSECTION. AS USED IN SUCH SECTIONS AND SUCH
PART, THE TERM "TAXPAYER" SHALL INCLUDE A QUALIFIED TAXPAYER UNDER  THIS
SUBSECTION  AND,  NOTWITHSTANDING  THE  PROVISIONS  OF SUBSECTION (E) OF
SECTION  SIX  HUNDRED  NINETY-SEVEN,  WHERE  A  QUALIFIED  TAXPAYER  HAS
PROTESTED THE DENIAL OF A CLAIM FOR CREDIT UNDER THIS SUBSECTION AND THE
TIME  TO  FILE  A  PETITION  FOR  REDETERMINATION OF A DEFICIENCY OR FOR
REFUND HAS NOT EXPIRED, HE OR SHE SHALL, SUBJECT TO SUCH  CONDITIONS  AS
MAY  BE  SET  BY  THE COMMISSIONER, RECEIVE SUCH INFORMATION (A) THAT IS
CONTAINED IN ANY RETURN FILED UNDER THIS ARTICLE BY A MEMBER OF  HIS  OR
HER  HOUSEHOLD FOR THE TAXABLE YEAR FOR WHICH THE CREDIT IS CLAIMED, AND
(B) THAT THE COMMISSIONER FINDS IS RELEVANT AND MATERIAL TO THE ISSUE OF
WHETHER SUCH CLAIM WAS PROPERLY DENIED.
  (12) NOTWITHSTANDING ANY OTHER PROVISION OF THIS ARTICLE,  THE  CREDIT
ALLOWED  UNDER  THIS  SUBSECTION  SHALL BE DETERMINED AFTER THE DETERMI-
NATION  AND  APPLICATION  OF  ANY  OTHER  CREDITS  PERMITTED  UNDER  THE
PROVISIONS  OF  THIS  ARTICLE.    A TAXPAYER SHALL BE ALLOWED EITHER THE
CREDIT PROVIDED BY THIS SUBSECTION OR  THE  REAL  PROPERTY  TAX  CIRCUIT
BREAKER  CREDIT PROVIDED BY SUBSECTION (E) OF THIS SECTION, WHICHEVER IS
GREATER.
  S 3. Paragraph 14 of subsection (e) of section 606 of the tax  law  is
REPEALED.
  S 4. This act shall take effect immediately and shall apply to taxable
years beginning on or after January 1, 2014.

                                 PART L

  Section  1.    Section  606  of the tax law is amended by adding a new
subsection (b-1) to read as follows:
  (B-1) RENTERS' CREDIT.
  (1) FOR THE PURPOSES OF THIS SUBSECTION:

S. 6359                            187                           A. 8559

  (A) "QUALIFIED TAXPAYER" MEANS A RESIDENT INDIVIDUAL OF THE STATE  WHO
HAS  OCCUPIED  AND  PAID  RENT  FOR HIS OR HER PRIMARY RESIDENCE IN THIS
STATE FOR SIX MONTHS OR MORE OF THE TAXABLE YEAR, IS REQUIRED OR CHOOSES
TO FILE A RETURN UNDER THIS ARTICLE, AND (I) IS SIXTY-FIVE YEARS OF  AGE
OR  OLDER, (II) IS FILING A JOINT RETURN WITH A SPOUSE WHO IS SIXTY-FIVE
YEARS OF AGE OR OLDER, (III) IS A HEAD OF HOUSEHOLD, (IV) IS  A  MARRIED
INDIVIDUAL  FILING  A  JOINT  RETURN  WITH A SPOUSE AND HAS AT LEAST ONE
DEPENDENT, (V) IS A MARRIED INDIVIDUAL FILING A SEPARATE RETURN AND  HAS
AT  LEAST  ONE DEPENDENT, OR (VI) IS A SURVIVING SPOUSE AND HAS AT LEAST
ONE DEPENDENT. AN INDIVIDUAL CANNOT BE A QUALIFIED TAXPAYER IF HE OR SHE
IS AN INDIVIDUAL WITH RESPECT TO WHOM A DEDUCTION UNDER  SUBSECTION  (C)
OF  SECTION  151  OF  THE  INTERNAL REVENUE CODE IS ALLOWABLE TO ANOTHER
TAXPAYER FOR THE TAXABLE YEAR OR PAYS RENT FOR HIS OR HER PRIMARY  RESI-
DENCE  TO  A FAMILY MEMBER SHARING THE SAME PRIMARY RESIDENCE.  A FAMILY
MEMBER OF AN INDIVIDUAL IS THE  INDIVIDUAL'S  SPOUSE,  BROTHER,  SISTER,
PARENT,  GRANDPARENT,  CHILD, GRANDCHILD, UNCLE, AUNT, NEPHEW, OR NIECE,
RELATED TO THE INDIVIDUAL BY BLOOD, MARRIAGE OR ADOPTION.
  (B) "RESIDENCE" MEANS A DWELLING IN THIS STATE AND MAY  CONSIST  OF  A
PART  OF  A MULTI-DWELLING OR MULTI-PURPOSE BUILDING INCLUDING A COOPER-
ATIVE OR CONDOMINIUM, AND RENTAL UNITS WITHIN A SINGLE  DWELLING.  RESI-
DENCE  INCLUDES  A TRAILER OR MOBILE HOME, USED EXCLUSIVELY FOR RESIDEN-
TIAL PURPOSES AND DEFINED AS REAL PROPERTY PURSUANT TO PARAGRAPH (G)  OF
SUBDIVISION  TWELVE  OF SECTION ONE HUNDRED TWO OF THE REAL PROPERTY TAX
LAW.
  (2) (A) A QUALIFIED TAXPAYER SHALL BE ALLOWED A CREDIT AS PROVIDED  IN
THIS SUBSECTION AGAINST THE TAXES IMPOSED BY THIS ARTICLE REDUCED BY THE
CREDITS  PERMITTED  BY THIS ARTICLE. IF THE CREDIT EXCEEDS THE TAX AS SO
REDUCED FOR SUCH YEAR UNDER THIS ARTICLE, 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. IF A QUALIFIED TAXPAYER
IS NOT REQUIRED TO FILE A RETURN PURSUANT TO SECTION SIX HUNDRED  FIFTY-
ONE  OF  THIS  ARTICLE  BUT  OTHERWISE QUALIFIES FOR A CREDIT UNDER THIS
SUBSECTION, A CLAIM FOR A CREDIT MAY BE TAKEN ON A RETURN FILED WITH THE
COMMISSIONER WITHIN THREE YEARS FROM THE TIME THAT A RETURN  WOULD  HAVE
BEEN  REQUIRED  TO  BE FILED PURSUANT TO SUCH SECTION HAD SUCH QUALIFIED
TAXPAYER HAD A TAXABLE YEAR ENDING  ON  DECEMBER  THIRTY-FIRST.  RETURNS
SHALL  BE  IN  SUCH  FORM AS PRESCRIBED BY THE COMMISSIONER. A QUALIFIED
TAXPAYER MUST PROVIDE ANY INFORMATION THE COMMISSIONER  DEEMS  NECESSARY
TO DETERMINE THE CREDIT ALLOWED.
  (B) IF MORE THAN ONE QUALIFIED TAXPAYER PAYS RENT FOR THE SAME PRIMARY
RESIDENCE  AND  HAS  A  FEDERAL ADJUSTED GROSS INCOME FOR WHICH A CREDIT
WOULD OTHERWISE BE DUE, EACH SUCH QUALIFIED TAXPAYER  SHALL  DIVIDE  THE
BASE  AMOUNT  OF  THE  CREDIT ALLOWED FOR HIS OR HER INCOME LEVEL BY THE
TOTAL NUMBER OF INDIVIDUALS OR MARRIED COUPLES FILING A JOINT RETURN WHO
ARE PAYING THE RENT, WHETHER OR NOT ELIGIBLE FOR A CREDIT, TO  DETERMINE
THE  AMOUNT OF CREDIT ALLOWED TO THAT QUALIFIED TAXPAYER. ANY ADDITIONAL
AMOUNT OF CREDIT DETERMINED BASED ON THE NUMBER OF EXEMPTIONS CLAIMED BY
SUCH TAXPAYER SHALL NOT BE SO DIVIDED.
  (C) A QUALIFIED TAXPAYER  SHALL  BE  ALLOWED  THE  CREDIT  UNDER  THIS
SUBSECTION OR THE CREDIT UNDER SUBSECTION (E) OF THIS SECTION, WHICHEVER
IS THE HIGHER AMOUNT.
  (3)  (A)  FOR ANY QUALIFIED TAXPAYER WHO IS SIXTY-FIVE YEARS OF AGE OR
OLDER WITH A FILING STATUS OF SINGLE, THE AMOUNT OF THE  CREDIT  ALLOWED
PURSUANT  TO  THIS  PARAGRAPH SHALL BE DETERMINED IN ACCORDANCE WITH THE
FOLLOWING TABLES:

S. 6359                            188                           A. 8559

FOR TAXABLE YEARS BEGINNING IN 2014,
IF FEDERAL ADJUSTED GROSS INCOME IS:        THE CREDIT SHALL BE:
$25,000 OR LESS                                     $110
OVER $25,000 BUT NOT OVER $40,000                    $90
OVER $40,000 BUT NOT OVER $50,000                    $70

FOR TAXABLE YEARS BEGINNING IN OR
AFTER 2015, IF FEDERAL ADJUSTED GROSS
INCOME IS:                                  THE CREDIT SHALL BE:
$25,000 OR LESS                                     $220
OVER $25,000 BUT NOT OVER $40,000                   $180
OVER $40,000 BUT NOT OVER $50,000                   $140
  (B) FOR ANY OTHER QUALIFIED TAXPAYER, THE AMOUNT OF THE CREDIT ALLOWED
PURSUANT  TO  THIS  PARAGRAPH SHALL BE DETERMINED IN ACCORDANCE WITH THE
FOLLOWING TABLES; PROVIDED, HOWEVER, THAT A QUALIFIED TAXPAYER WHO IS  A
MARRIED  INDIVIDUAL  FILING  A SEPARATE NEW YORK INCOME TAX RETURN SHALL
RECEIVE ONE-HALF OF THE BASE AMOUNT OF THE CREDIT  PLUS  ANY  ADDITIONAL
AMOUNT FOR WHICH SUCH TAXPAYER WOULD BE ELIGIBLE BASED ON THE INCOME AND
NUMBER OF EXEMPTIONS CLAIMED BY SUCH TAXPAYER:

FOR TAXABLE YEARS BEGINNING IN 2014,
IF FEDERAL ADJUSTED GROSS INCOME IS:         THE CREDIT SHALL BE:
$25,000 OR LESS                              $80 PLUS AN AMOUNT
                                             EQUAL TO $35
                                             MULTIPLIED BY A
                                             NUMBER WHICH IS ONE
                                             LESS THAN THE NUMBER
                                             OF EXEMPTIONS FOR
                                             WHICH THE TAXPAYER
                                             (OR IN THE CASE
                                             OF A MARRIED COUPLE
                                             FILING A JOINT RETURN,
                                             TAXPAYERS) IS ENTITLED
                                             TO A DEDUCTION FOR THE
                                             TAXABLE YEAR FOR FEDERAL
                                             INCOME TAX PURPOSES
                                             UNDER SUBSECTIONS (B)
                                             AND (C) OF SECTION 151
                                             OF THE INTERNAL REVENUE CODE

OVER $25,000 BUT NOT OVER $45,000            $65 PLUS AN AMOUNT
                                             EQUAL TO $24
                                             MULTIPLIED BY A NUMBER
                                             WHICH IS ONE LESS THAN
                                             THE NUMBER OF EXEMPTIONS
                                             FOR WHICH THE TAXPAYER
                                             (OR IN THE CASE OF
                                             A MARRIED COUPLE FILING A
                                             JOINT RETURN, TAXPAYERS)
                                             IS ENTITLED TO A
                                             DEDUCTION FOR THE TAXABLE
                                             YEAR FOR FEDERAL INCOME
                                             TAX PURPOSES UNDER
                                             SUBSECTIONS (B) AND (C)
                                             OF SECTION 151 OF THE
                                             INTERNAL REVENUE CODE

S. 6359                            189                           A. 8559

OVER $45,000 BUT NOT OVER $65,000            $55 PLUS AN AMOUNT
                                             EQUAL TO $12 MULTIPLIED
                                             BY A NUMBER WHICH IS ONE
                                             LESS THAN THE NUMBER
                                             OF EXEMPTIONS FOR
                                             WHICH THE TAXPAYER (OR
                                             IN THE CASE OF A MARRIED
                                             COUPLE FILING A JOINT RETURN,
                                             TAXPAYERS) IS ENTITLED
                                             TO A DEDUCTION FOR THE
                                             TAXABLE YEAR FOR FEDERAL
                                             INCOME TAX PURPOSES UNDER
                                             SUBSECTIONS (B) AND (C)
                                             OF SECTION 151 OF THE
                                             INTERNAL REVENUE CODE

OVER $65,000 BUT NOT OVER $100,000           $45 PLUS AN AMOUNT
                                             EQUAL TO $12 MULTIPLIED
                                             BY A NUMBER WHICH IS ONE
                                             LESS THAN THE NUMBER
                                             OF EXEMPTIONS FOR WHICH
                                             THE TAXPAYER (OR IN THE
                                             CASE OF A MARRIED COUPLE
                                             FILING A JOINT RETURN,
                                             TAXPAYERS) IS ENTITLED TO
                                             A DEDUCTION FOR THE TAXABLE
                                             YEAR FOR FEDERAL INCOME TAX
                                             PURPOSES UNDER SUBSECTIONS
                                             (B) AND (C) OF SECTION 151
                                             OF THE INTERNAL REVENUE CODE

FOR TAXABLE YEARS BEGINNING IN OR
AFTER 2015, IF FEDERAL ADJUSTED GROSS
INCOME IS:                                   THE CREDIT SHALL BE:
$25,000 OR LESS                              $160 PLUS AN
                                             AMOUNT EQUAL TO $70
                                             MULTIPLIED BY A NUMBER WHICH
                                             IS ONE LESS THAN THE
                                             NUMBER OF EXEMPTIONS
                                             FOR WHICH THE TAXPAYER
                                             (OR IN THE CASE OF A
                                             MARRIED COUPLE FILING A
                                             JOINT RETURN, TAXPAYERS)
                                             IS ENTITLED TO A DEDUCTION
                                             FOR THE TAXABLE YEAR FOR
                                             FEDERAL INCOME TAX PURPOSES
                                             UNDER SUBSECTIONS (B) AND
                                             (C) OF SECTION 151 OF THE
                                             INTERNAL REVENUE CODE

OVER $25,000 BUT NOT OVER $45,000            $130 PLUS AN AMOUNT
                                             EQUAL TO $48
                                             MULTIPLIED BY A NUMBER
                                             WHICH IS ONE LESS THAN
                                             THE NUMBER OF EXEMPTIONS
                                             FOR WHICH THE TAXPAYER

S. 6359                            190                           A. 8559

                                             (OR IN THE CASE OF
                                             A MARRIED COUPLE FILING
                                             A JOINT RETURN, TAXPAYERS)
                                             IS ENTITLED TO A DEDUCTION
                                             FOR THE TAXABLE YEAR FOR
                                             FEDERAL INCOME TAX PURPOSES
                                             UNDER SUBSECTIONS (B)
                                             AND (C) OF SECTION 151
                                             OF THE INTERNAL REVENUE CODE

OVER $45,000 BUT NOT OVER $65,000            $110 PLUS AN AMOUNT
                                             EQUAL TO $24 MULTIPLIED
                                             BY A NUMBER WHICH IS ONE
                                             LESS THAN THE NUMBER
                                             OF EXEMPTIONS FOR
                                             WHICH THE TAXPAYER (OR
                                             IN THE CASE OF A MARRIED
                                             COUPLE FILING A JOINT RETURN,
                                             TAXPAYERS) IS ENTITLED TO A
                                             DEDUCTION FOR THE TAXABLE
                                             YEAR FOR FEDERAL INCOME TAX
                                             PURPOSES UNDER SUBSECTIONS
                                             (B) AND (C) OF SECTION 151
                                             OF THE INTERNAL  REVENUE CODE

OVER $65,000 BUT NOT OVER $100,000           $90 PLUS AN AMOUNT
                                             EQUAL TO $24 MULTIPLIED
                                             BY A NUMBER WHICH IS ONE
                                             LESS THAN THE NUMBER
                                             OF EXEMPTIONS FOR
                                             WHICH THE TAXPAYER (OR
                                             IN THE CASE OF A MARRIED
                                             COUPLE FILING A JOINT RETURN,
                                             TAXPAYERS) IS
                                             ENTITLED TO A DEDUCTION
                                             FOR THE TAXABLE YEAR FOR
                                             FEDERAL INCOME TAX PURPOSES
                                             UNDER SUBSECTIONS (B) AND
                                             (C) OF SECTION 151 OF THE
                                             INTERNAL REVENUE CODE
  S 2. This act shall take effect immediately.

                                 PART M

  Section  1. Paragraphs 2, 4 and 5 of subsection (vv) of section 606 of
the tax law, as added by section 1 of part CC of chapter 59 of the  laws
of 2013, are amended to read as follows:
  2.  To  be  eligible for the credit, the taxpayer (or taxpayers filing
joint returns) on the personal income tax return filed for  the  taxable
year  [two  years  prior],  must  [have]  (a)  [been] BE a resident, (b)
[claimed] CLAIM one or more dependent children who were under the age of
seventeen on the last day of the taxable year, (c) [had] HAVE  New  York
adjusted  gross income of at least forty thousand dollars but no greater
than three hundred thousand dollars, and (d) [had] HAVE a tax  liability
as  determined  under paragraph three of this subsection of greater than
or equal to zero.

S. 6359                            191                           A. 8559

  4. [For each year  this  credit  is  allowed,  on  or  before  October
fifteenth  of such year, the commissioner shall determine the taxpayer's
eligibility for this credit utilizing the information available  to  the
commissioner  on the taxpayer's personal income tax return filed for the
taxable  year two years prior to the taxable year in which the credit is
allowed. For those taxpayers whom the commissioner has determined eligi-
ble for this credit, the commissioner shall advance a payment  of  three
hundred  fifty  dollars. When a taxpayer files his or her return for the
taxable year, such taxpayer shall properly reconcile that payment on his
or her return.
  5.] If the amount of the credit allowed under  this  subsection  shall
exceed  the  taxpayer's  tax  for  the taxable year, the excess shall be
treated as an overpayment of tax to be credited or refunded  in  accord-
ance with the provisions of SECTION six hundred eighty-six of this arti-
cle, provided, however, that no interest shall be paid thereon.
  S 2. This act shall take effect immediately and apply to taxable years
beginning on or after January 1, 2015.

                                 PART N

  Section  1.  Paragraph  1  of subsection (a) of section 651 of the tax
law, as amended by chapter 333 of the laws of 1987, is amended  to  read
as follows:
  (1)  every  resident  individual (A) required to file a federal income
tax return for the taxable year, or (B) having  federal  adjusted  gross
income  for  the  taxable  year,  increased  by  the modifications under
subsection (b) of section six hundred twelve OF THIS ARTICLE, in  excess
of [four thousand dollars, or in excess of] his OR HER New York standard
deduction,  [if  lower,] or (C) subject to tax under section six hundred
two OF THIS ARTICLE, or (D) having received during the  taxable  year  a
lump  sum  distribution  any  portion  of  which is subject to tax under
section six hundred three OF THIS ARTICLE;
  S 2. This act shall take effect immediately and apply to taxable years
beginning on or after January 1, 2014.

                                 PART O

  Section 1. Paragraph 1 of subdivision (a) of section  28  of  the  tax
law,  as  amended  by  section  1 of part I of chapter 59 of the laws of
2012, is amended to read as follows:
  (1) A taxpayer which is a qualified commercial production company,  or
which is a sole proprietor of a qualified commercial production company,
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 (c) of this section, to be computed
as  provided in this section. Provided, however, to be eligible for such
credit, at least seventy-five percent of the production costs (excluding
post production costs) paid or incurred directly  and  predominantly  in
the  actual  filming  or  recording  of the qualified commercial must be
costs incurred in New York state. The tax  credit  allowed  pursuant  to
this  section  shall  apply  to  taxable  years beginning before January
first, two thousand [fifteen] SEVENTEEN.
  S 2. Paragraph (a) of subdivision 38 of section 210 of the tax law, as
amended by section 3 of part I of chapter 59 of the  laws  of  2012,  is
amended to read as follows:

S. 6359                            192                           A. 8559

  (a)  Allowance  of  credit.  A  taxpayer  that is eligible pursuant to
provisions of section twenty-eight of this chapter shall  be  allowed  a
credit  to  be  computed  as  provided  in  such section against the tax
imposed by this article. The tax credit allowed pursuant to this section
shall  apply  to taxable years beginning before January first, two thou-
sand [fifteen] SEVENTEEN.
  S 3. Paragraph 1 of subsection (jj) of section 606 of the tax law,  as
amended  by  section  4  of part I of chapter 59 of the laws of 2012, is
amended to read as follows:
  (1) Allowance of credit. A taxpayer that is eligible pursuant  to  the
provisions  of  section  twenty-eight of this chapter shall be allowed a
credit to be computed as  provided  in  such  section  against  the  tax
imposed by this article. The tax credit allowed pursuant to this section
shall  apply  to taxable years beginning before January first, two thou-
sand [fifteen] SEVENTEEN.
  S 4. This act shall take effect immediately.

                                 PART P

  Section 1. Subdivision 4 of section 22 of the public housing  law,  as
amended  by  section  2  of part J of chapter 59 of the laws of 2012, is
amended to read as follows:
  4. Statewide limitation. The aggregate dollar amount of  credit  which
the  commissioner  may  allocate  to eligible low-income buildings under
this article shall be [forty-eight] FIFTY-SIX million dollars. The limi-
tation provided by this subdivision applies only to  allocation  of  the
aggregate  dollar  amount  of  credit  by the commissioner, and does not
apply to allowance to a taxpayer of the credit with respect to an eligi-
ble low-income building for each year of the credit period.
  S 2. Subdivision 4 of section 22 of the public housing law, as amended
by section one of this act, is amended to read as follows:
  4. Statewide limitation. The aggregate dollar amount of  credit  which
the  commissioner  may  allocate  to eligible low-income buildings under
this article shall be [fifty-six] SIXTY-FOUR million dollars. The  limi-
tation  provided  by  this subdivision applies only to allocation of the
aggregate dollar amount of credit by  the  commissioner,  and  does  not
apply to allowance to a taxpayer of the credit with respect to an eligi-
ble low-income building for each year of the credit period.
  S  3.  This act shall take effect immediately; provided, however, that
section two of this act shall take effect April 1, 2015.

                                 PART Q

  Section 1. Subdivision (b) of section  27-1318  of  the  environmental
conservation  law,  as  amended by section 2 of part E of chapter 577 of
the laws of 2004, is amended to read as follows:
  (b) Within [sixty] ONE HUNDRED EIGHTY  days  of  commencement  of  the
remedial design, the owner of an inactive hazardous waste disposal site,
and/or  any  person  responsible  for implementing a remedial program at
such site, where institutional  or  engineering  controls  are  employed
pursuant to this title, shall execute an environmental easement pursuant
to title thirty-six of article seventy-one of this chapter.
  S  2.  Subdivision 2 of section 27-1405 of the environmental conserva-
tion law, as amended by section 2 of part A of chapter 577 of  the  laws
of 2004, is amended to read as follows:

S. 6359                            193                           A. 8559

  2.  "Brownfield  site"  or  "site"  shall mean any real property[, the
redevelopment or reuse of which may be complicated by  the  presence  or
potential  presence of] WHERE a contaminant IS PRESENT AT LEVELS EXCEED-
ING THE SOIL CLEANUP OBJECTIVES OR OTHER HEALTH-BASED  OR  ENVIRONMENTAL
STANDARDS PROMULGATED BY THE DEPARTMENT THAT ARE APPLICABLE BASED ON THE
REASONABLY ANTICIPATED USE OF THE PROPERTY, AS DETERMINED BY THE DEPART-
MENT. Such term shall not include real property:
  (a)  listed in the registry of inactive hazardous waste disposal sites
under section 27-1305 of this article at the time of application to this
program and given a classification as described in subparagraph  one  or
two  of  paragraph b of subdivision two of section 27-1305 of this arti-
cle; provided, however [except until July  first,  two  thousand  five],
real  property  listed  in  the  registry  of  inactive  hazardous waste
disposal sites under subparagraph two of paragraph b of subdivision  two
of  section 27-1305 of this article [prior to the effective date of this
article], where such real property is owned  by  a  volunteer  OR  UNDER
CONTRACT  TO  BE  TRANSFERRED  TO A VOLUNTEER AND THE DEPARTMENT HAS NOT
IDENTIFIED ANY RESPONSIBLE PARTIES FOR THAT PROPERTY HAVING THE  ABILITY
TO  PAY  FOR  THE INVESTIGATION OR CLEANUP OF THE PROPERTY, shall not be
deemed ineligible to participate and further provided that the status of
any such site as listed in the registry shall not be  altered  prior  to
the  issuance of a certificate of completion pursuant to section 27-1419
of this title. THE DEPARTMENT'S ASSESSMENT  OF  ELIGIBILITY  UNDER  THIS
PARAGRAPH  SHALL  NOT  CONSTITUTE  A  FINDING  CONCERNING LIABILITY WITH
RESPECT TO THE PROPERTY;
  (b) listed on the national priorities list established under authority
of 42 U.S.C. section 9605;
  (c) subject to an enforcement action under title seven or nine of this
article, [except] OR PERMITTED  AS  a  treatment,  storage  or  disposal
facility  [subject to a permit]; provided, that nothing herein contained
shall be deemed otherwise to exclude from the scope of the term  "brown-
field  site"  a  hazardous waste treatment, storage or disposal facility
having interim  status  according  to  regulations  promulgated  by  the
commissioner;
  (d)  subject to an order for cleanup pursuant to article twelve of the
navigation law or pursuant to title ten of  article  seventeen  of  this
chapter  except  such  property  shall not be deemed ineligible if it is
subject to a stipulation agreement; or
  (e) subject to any  other  on-going  state  or  federal  environmental
enforcement action related to the contamination which is at or emanating
from the site subject to the present application.
  S  3.  Subdivision 1 of section 27-1407 of the environmental conserva-
tion law, as amended by section 3 of part A of chapter 577 of  the  laws
of  2004,  is  amended  and  a  new  subdivision 1-a is added to read as
follows:
  1. A person who seeks to participate in this program  shall  submit  a
request  to  the  department  on a form provided by the department. Such
form shall include information to be determined by the department suffi-
cient to allow the department to determine eligibility and the  current,
intended and reasonably anticipated future land use of the site pursuant
to  section  27-1415  of  this  title.   ANY SUCH PERSON SHALL SUBMIT AN
INVESTIGATION REPORT SUFFICIENT TO DEMONSTRATE THAT  THE  SITE  REQUIRES
REMEDIATION  IN  ORDER  TO MEET THE REMEDIAL REQUIREMENTS OF THIS TITLE;
AND, FOR ANY STRATEGIC SITE LOCATED WITHIN A BROWNFIELD OPPORTUNITY AREA
DESIGNATED BY THE SECRETARY OF STATE PURSUANT TO  SECTION  NINE  HUNDRED
SEVENTY-R  OF THE GENERAL MUNICIPAL LAW, A CERTIFICATION THAT THE DEVEL-

S. 6359                            194                           A. 8559

OPMENT OF THE SITE WILL BE IN CONFORMANCE WITH SUCH BROWNFIELD  OPPORTU-
NITY AREA PLAN.
  1-A.  IF  THE  PERSON IS ALSO SEEKING TO RECEIVE THE TANGIBLE PROPERTY
CREDIT COMPONENT OF THE BROWNFIELD REDEVELOPMENT TAX CREDIT PURSUANT  TO
PARAGRAPH  THREE OF SUBDIVISION (A) OF SECTION TWENTY-ONE OF THE TAX LAW
SUCH PERSON SHALL SUBMIT INFORMATION SUFFICIENT TO DEMONSTRATE THAT  (1)
THE SITE HAS: (I) BEEN A VACANT LOT FOR FIFTEEN OR MORE YEARS, OR (II) A
BUILDING  OR  BUILDINGS THAT HAVE BEEN VACANT FOR FIFTEEN OR MORE YEARS,
OR (III) A LOT OR BUILDINGS HAVE BEEN BOTH VACANT AND TAX DELINQUENT FOR
TEN OR MORE YEARS, (2) THE PROJECTED COST OF THE INVESTIGATION AND REME-
DIATION WHICH IS PROTECTIVE FOR THE ANTICIPATED USE OF THE SITE  EXCEEDS
THE  CERTIFIED  APPRAISED VALUE OF THE PROPERTY ABSENT CONTAMINATION, OR
(3) THE PROJECT IS A PRIORITY ECONOMIC DEVELOPMENT PROJECT AS DETERMINED
BY THE DEPARTMENT OF ECONOMIC DEVELOPMENT THAT HAS RECEIVED A RESOLUTION
FROM THE MUNICIPALITY WITHIN WHICH  THE  SITE  IS  LOCATED  STATING  THE
PROPOSED PROJECT IS CONSISTENT WITH THE MUNICIPALITY'S LOCAL REVITALIZA-
TION OR DEVELOPMENT PLAN.  "PRIORITY ECONOMIC DEVELOPMENT PROJECT" MEANS
(A)  A  MANUFACTURER  CREATING  AT LEAST ONE HUNDRED NET NEW JOBS IN THE
STATE AND MAKING SIGNIFICANT CAPITAL INVESTMENT  IN  THE  STATE;  (B)  A
BUSINESS  CREATING  AT  LEAST ONE HUNDRED NET NEW JOBS IN AGRICULTURE IN
THE STATE AND MAKING SIGNIFICANT CAPITAL INVESTMENT IN THE STATE; (C)  A
FINANCIAL  SERVICES  FIRM, DISTRIBUTION CENTER, OR BACK OFFICE OPERATION
CREATING AT LEAST THREE HUNDRED NET NEW JOBS IN  THE  STATE  AND  MAKING
SIGNIFICANT  CAPITAL  INVESTMENT IN THE STATE; (D) A SCIENTIFIC RESEARCH
AND DEVELOPMENT FIRM CREATING AT LEAST ONE HUNDRED NET NEW JOBS  IN  THE
STATE,  AND  MAKING SIGNIFICANT CAPITAL INVESTMENT IN THE STATE; (E) THE
CORPORATE HEADQUARTERS OF A FIRM CREATING AT LEAST ONE HUNDRED  NET  NEW
JOBS  IN  THE  STATE,  AND  MAKING SIGNIFICANT CAPITAL INVESTMENT IN THE
STATE; OR (F) A SOFTWARE DEVELOPMENT OR NEW MEDIA FIRM CREATING AT LEAST
FIFTY NET NEW JOBS IN THE STATE, AND MAKING SIGNIFICANT CAPITAL  INVEST-
MENT  IN  THE STATE. OTHER BUSINESSES CREATING THREE HUNDRED OR MORE NET
NEW JOBS IN THE STATE AND MAKING SIGNIFICANT CAPITAL INVESTMENT  IN  THE
STATE  MAY  BE  CONSIDERED  ELIGIBLE  AS  PRIORITY  ECONOMIC DEVELOPMENT
PROJECT BY THE COMMISSIONER OF ECONOMIC DEVELOPMENT AS WELL.  AN  APPLI-
CANT  MAY  REQUEST  AN  ELIGIBILITY  DETERMINATION FOR TANGIBLE PROPERTY
CREDITS FROM THE COMMISSIONER OF ECONOMIC  DEVELOPMENT  FOR  A  PRIORITY
ECONOMIC  DEVELOPMENT PROJECT WHEN IT CAN DEMONSTRATE THAT IT MEETS SUCH
CRITERIA ANY TIME FROM APPLICATION TO THREE YEARS FROM THE DATE THE SITE
RECEIVES A CERTIFICATE OF COMPLETION PURSUANT TO SECTION 27-1419 OF THIS
TITLE.  THE COMMISSIONER OF ECONOMIC DEVELOPMENT SHALL PROMULGATE  REGU-
LATIONS TO DETERMINE WHAT CONSTITUTES SIGNIFICANT CAPITAL INVESTMENT FOR
EACH  OF  THE  PROJECT CATEGORIES INDICATED IN THIS SUBDIVISION AND WHAT
ADDITIONAL CRITERIA A BUSINESS MUST MEET TO BE ELIGIBLE  AS  A  PRIORITY
ECONOMIC DEVELOPMENT PROJECT.
  SITES  ARE  NOT  ELIGIBLE FOR TANGIBLE PROPERTY TAX CREDITS IF (1) THE
CONTAMINATION IS SOLELY EMANATING FROM  PROPERTY  OTHER  THAN  THE  SITE
SUBJECT TO THE PRESENT APPLICATION; OR (2) THE DEPARTMENT HAS DETERMINED
THAT  THE  PROPERTY  HAS  PREVIOUSLY BEEN REMEDIATED SUCH THAT IT MAY BE
DEVELOPED FOR ITS THEN INTENDED USE.
  S 4. Subdivision 3 of section 27-1407 of the  environmental  conserva-
tion  law,  as amended by section 3 of part A of chapter 577 of the laws
of 2004, is amended to read as follows:
  3. The department shall notify the person requesting participation  in
this  program within [ten] THIRTY days after receiving such request that
such request is either complete or incomplete. In the event the applica-
tion is determined to be incomplete  the  department  shall  specify  in

S. 6359                            195                           A. 8559

writing  the  missing  necessary  information  required pursuant to this
article to complete the  application  and  shall  have  ten  days  after
receipt  of  the missing information to issue a written determination if
the application is complete.
  S  5.  Subdivision 6 of section 27-1407 of the environmental conserva-
tion law, as added by section 1 of part A of chapter 1 of  the  laws  of
2003, is amended to read as follows:
  6.  The  department shall use all best efforts to expeditiously notify
the applicant within forty-five days after receiving [their  request]  A
COMPLETE  APPLICATION  for  participation  that  such  request is either
accepted or rejected, AND, FOR ANY  APPLICANT  SEEKING  TO  RECEIVE  THE
TANGIBLE  PROPERTY  CREDIT COMPONENT OF THE BROWNFIELD REDEVELOPMENT TAX
CREDIT PURSUANT TO PARAGRAPH THREE OF SUBDIVISION (A) OF  SECTION  TWEN-
TY-ONE OF THE TAX LAW, WHETHER THE CRITERIA FOR RECEIVING SUCH COMPONENT
AS SET FORTH IN SUBDIVISION ONE OF THIS SECTION HAVE BEEN MET.
  S  6.  Subdivision 9 of section 27-1407 of the environmental conserva-
tion law is amended by adding a new paragraph (g) to read as follows:
  (G) THE PERSON'S PARTICIPATION  IN  ANY  REMEDIAL  PROGRAM  UNDER  THE
DEPARTMENT'S  OVERSIGHT  WAS  TERMINATED BY THE DEPARTMENT OR BY A COURT
FOR FAILURE TO SUBSTANTIALLY COMPLY WITH AN AGREEMENT OR ORDER.
  S 7. Subdivision 2 of section 27-1409 of the  environmental  conserva-
tion  law,  as amended by section 4 of part A of chapter 577 of the laws
of 2004, is amended to read as follows:
  2. One requiring (A) the [applicant]  PARTICIPANT  to  pay  for  state
costs,  INCLUDING THE RECOVERY OF STATE COSTS INCURRED BEFORE THE EFFEC-
TIVE DATE OF SUCH AGREEMENT; provided, however, that SUCH COSTS  MAY  BE
BASED  ON  A  REASONABLE FLAT-FEE FOR OVERSIGHT, WHICH SHALL REFLECT THE
PROJECTED FUTURE STATE COSTS  INCURRED  IN  NEGOTIATING  AND  OVERSEEING
IMPLEMENTATION OF SUCH AGREEMENT; AND
  (B)  with respect to a brownfield site which the department has deter-
mined constitutes a significant threat to the public health or  environ-
ment  the  department may include a provision requiring the applicant to
provide a technical assistance grant, as described in  subdivision  four
of  section  27-1417  of  this  title and under the conditions described
therein, to an eligible party in accordance with procedures  established
under  such  program, with the cost of such a grant incurred by a volun-
teer serving as an offset against such state costs[. Where the applicant
is a participant, the department shall include  provisions  relating  to
recovery  of  state  costs  incurred  before  the effective date of such
agreement];
  S 8. Section 27-1411 of the environmental conservation law is  amended
by adding two new subdivisions 6 and 7 to read as follows:
  6.  AN APPLICANT SHALL COMMENCE IMPLEMENTATION OF ANY WORK PLAN WITHIN
NINETY DAYS OF APPROVAL OF THE PLAN BY THE DEPARTMENT AND  COMPLETE  THE
ACTIVITIES  PROVIDED FOR IN SUCH WORK PLAN IN ACCORDANCE WITH THE SCHED-
ULE SET FORTH THEREIN, OR AS OTHERWISE APPROVED  BY  THE  DEPARTMENT  IN
WRITING.
  7.  AN  APPLICANT  SHALL  INCLUDE  WITH  EVERY REPORT SUBMITTED TO THE
DEPARTMENT A SCHEDULE FOR THE SUBMISSION OF  ANY  SUBSEQUENT  WORK  PLAN
REQUIRED TO MEET THE REQUIREMENTS OF THIS TITLE.
  S  9.  Subdivision 2 of section 27-1413 of the environmental conserva-
tion law, as amended by section 6 of part A of chapter 577 of  the  laws
of 2004, is amended to read as follows:
  2.  For  all  [other]  sites  SEEKING TO RECEIVE THE TANGIBLE PROPERTY
CREDIT COMPONENT PURSUANT TO  PARAGRAPH  THREE  OF  SUBDIVISION  (A)  OF
SECTION TWENTY-ONE OF THE TAX LAW, the applicant shall develop and eval-

S. 6359                            196                           A. 8559

uate  at  least  two remedial alternatives, one of which would achieve a
Track 1 cleanup. The department shall have the discretion to require the
evaluation of additional alternatives at a site that has been determined
to  pose  a  significant threat. The applicant shall submit the alterna-
tives analysis [as a part of the remedial work plan] to  the  department
for review, approval, modification or rejection.
  S  10. Subdivision 4 of section 27-1415 of the environmental conserva-
tion law, as amended by section 7 of part A of chapter 577 of  the  laws
of 2004, is amended to read as follows:
  4.  Tracks. The commissioner, in consultation with the commissioner of
health, shall propose within twelve months and thereafter timely promul-
gate regulations which create a multi-track approach for the remediation
of contamination, and, commencing on the effective date  of  such  regu-
lations,  utilize  such  multi-track  approach.  Such  regulations shall
provide that groundwater  use  in  Tracks  2,  3  or  4  can  be  either
restricted or unrestricted. The tracks shall be as follows:
  Track  1: The remedial program shall achieve a cleanup level that will
allow the site to be used for any purpose without restriction and  with-
out reliance on the long-term employment of institutional or engineering
controls,  and shall achieve contaminant-specific remedial action objec-
tives for soil which conform with those contained in the  generic  table
of  contaminant-specific remedial action objectives for unrestricted use
developed pursuant to subdivision six of this section.  Provided, howev-
er, that volunteers whose proposed remedial program [for the remediation
of groundwater] (1)(I) may require the long-term employment of  institu-
tional  or engineering controls FOR THE REMEDIATION OF GROUNDWATER after
the bulk reduction of groundwater contamination to asymptotic levels has
been achieved OR  (II)  MAY  REQUIRE  AN  INSTITUTIONAL  OR  ENGINEERING
CONTROL  FOR MORE THAN FIVE YEARS SOLELY TO ADDRESS SOIL VAPOR INTRUSION
but (2) whose program would  otherwise  conform  with  the  requirements
necessary to qualify for Track 1, shall qualify for Track 1.
  Track  2:  The remedial program may include restrictions on the use of
the site or reliance on the long-term employment of  engineering  and/or
institutional  controls, but shall achieve contaminant-specific remedial
action objectives for soil which conform with those contained in one  of
the generic tables developed pursuant to subdivision six of this section
without  the  use of institutional or engineering controls to reach such
objectives.
  Track 3: The remedial program shall achieve contaminant-specific reme-
dial action objectives for soil which conform with the criteria used  to
develop  the  generic  tables  for such objectives developed pursuant to
subdivision six of this section but may use site specific data to deter-
mine such objectives.
  Track 4: The remedial program shall achieve a cleanup level that  will
be protective for the site's current, intended or reasonably anticipated
residential,  commercial,  or  industrial use with restrictions and with
reliance on the long-term employment  of  institutional  or  engineering
controls  to  achieve  such  level.  The  regulations  shall  include  a
provision requiring that a cleanup level which poses a  risk  in  excee-
dance  of  an  excess cancer risk of one in one million for carcinogenic
end points and a hazard index of one for non-cancer  end  points  for  a
specific  contaminant  at a specific site may be approved by the depart-
ment without requiring the use of institutional or engineering  controls
to  eliminate  exposure only upon a site specific finding by the commis-
sioner, in consultation with the commissioner of health, that such level
shall be protective of public health and environment. Such finding shall

S. 6359                            197                           A. 8559

be included in the draft remedial work  plan  for  the  site  and  fully
described in the notice and fact sheet provided for such work plan.
  S  11. Paragraphs (b), (c) and (d) of subdivision 7 of section 27-1415
of the environmental conservation law are relettered paragraphs (c), (d)
and (e) and a new paragraph (b) is added to read as follows:
  (B) WITHIN ONE HUNDRED EIGHTY DAYS OF  COMMENCEMENT  OF  THE  REMEDIAL
DESIGN  OR  AT  LEAST  THREE MONTHS PRIOR TO THE DATE OF THE ANTICIPATED
ISSUANCE OF THE CERTIFICATE OF COMPLETION, THE  OWNER  OF  A  BROWNFIELD
SITE,  AND/OR ANY PERSON RESPONSIBLE FOR IMPLEMENTING A REMEDIAL PROGRAM
AT SUCH SITE, WHERE INSTITUTIONAL OR ENGINEERING CONTROLS  ARE  EMPLOYED
PURSUANT TO THIS TITLE, SHALL EXECUTE AN ENVIRONMENTAL EASEMENT PURSUANT
TO TITLE THIRTY-SIX OF ARTICLE SEVENTY-ONE OF THIS CHAPTER.
  S  12.  Paragraph (h) of subdivision 3 of section 27-1417 of the envi-
ronmental conservation law is  REPEALED,  paragraph  (i)  is  relettered
paragraph  (h)  and  paragraph (f), as amended by section 8 of part A of
chapter 577 of the laws of 2004, is amended to read as follows:
  (f) Before the department [finalizes]  SELECTS  a  proposed  [remedial
work  plan]  REMEDY  FROM THE ALTERNATIVES SET FORTH IN THE ALTERNATIVES
ANALYSIS AS PRESCRIBED BY SECTION 27-1413  OF  THIS  TITLE  or  makes  a
determination  that  site conditions meet the requirements of this title
without the necessity for remediation pursuant  to  section  27-1411  of
this  title,  the  department,  in consultation with the applicant, must
notify individuals on the brownfield  site  contact  list.  Such  notice
shall  include  a  fact  sheet  describing  such  plan and provide for a
forty-five day public comment period.  The  commissioner  shall  hold  a
public  meeting  if  requested by the affected community and the commis-
sioner has found that the site constitutes a significant threat  to  the
public  health  or  the environment. Further, the affected community may
request a public meeting at sites that do not constitute  a  significant
threat.  (1)  To the extent that the department has determined that site
conditions do not pose a  significant  threat  and  the  site  is  being
addressed by a volunteer, the notice shall state that the department has
determined  that  no  remediation is required for the off-site areas and
that the department's determination of a significant threat  is  subject
to  this  forty-five day comment period. (2) If the [remedial work plan]
REMEDY includes a Track 2, Track 3 or Track 4 remedy at  a  non-signifi-
cant  threat  site, such comment period shall apply both to the approval
of the alternatives analysis by the department, IF APPLICABLE,  and  the
proposed remedy selected by the applicant.
  S  13.  Paragraph  (a)  of  subdivision 2 and subdivision 3 of section
27-1419 of the environmental conservation law, paragraph (a) of subdivi-
sion 2 as added by section 1 of part A of chapter 1 of the laws of 2003,
subdivision 3 as amended by chapter 390 of the laws of 2008, are amended
to read as follows:
  (a) a description of the remediation activities completed pursuant  to
the  remedial work plan AND ANY INTERIM REMEDIAL MEASURES for the brown-
field site AND THE COSTS PAID FOR THOSE ACTIVITIES;
  3. Upon receipt of the final engineering report, the department  shall
review  such  report  and  the data submitted pursuant to the brownfield
site cleanup agreement as well as any other relevant information regard-
ing the brownfield site. Upon satisfaction of the commissioner that  the
remediation  requirements  set  forth in this title have been or will be
achieved in accordance with the timeframes, if any, established  in  the
remedial  work  plan, the commissioner shall issue a written certificate
of completion[, such]. THE certificate shall include such information as
determined by the department of taxation and finance, including but  not

S. 6359                            198                           A. 8559

limited  to  the  brownfield site boundaries included in the final engi-
neering report, the  date  of  the  brownfield  site  CLEANUP  agreement
[pursuant to section 27-1409 of this title], IDENTIFICATION OF THE ENTI-
TY  OR  ENTITIES  ELIGIBLE  FOR CREDITS PURSUANT TO SECTIONS TWENTY-ONE,
TWENTY-TWO OR TWENTY-THREE OF THE TAX LAW, and the  applicable  percent-
ages  available AS OF THE DATE OF THE CERTIFICATE OF COMPLETION for that
site for purposes of section twenty-one  of  the  tax  law[,  with  such
percentages  to  be determined as follows with respect to such qualified
site]. FOR THOSE SITES FOR WHICH THE DEPARTMENT HAS ISSUED A  NOTICE  TO
THE  APPLICANT  ON  OR  AFTER JULY FIRST, TWO THOUSAND FOURTEEN THAT ITS
REQUEST FOR PARTICIPATION HAS BEEN ACCEPTED  UNDER  SUBDIVISION  SIX  OF
SECTION 27-1407 OF THIS TITLE, THE TANGIBLE PROPERTY CREDIT COMPONENT OF
THE  BROWNFIELD  REDEVELOPMENT TAX CREDIT PURSUANT TO PARAGRAPH THREE OF
SUBDIVISION (A) OF SECTION TWENTY-ONE OF  THE  TAX  LAW  SHALL  ONLY  BE
AVAILABLE  TO  THE  TAXPAYER IF THE NOTICE INCLUDES A DETERMINATION THAT
THE CRITERIA FOR RECEIVING SUCH TAX COMPONENT HAVE BEEN MET.  FOR  THOSE
SITES for which the department has issued a notice to the taxpayer after
June twenty-third, two thousand eight that its request for participation
has  been  accepted  under  subdivision  six  of section 27-1407 of this
title[:
  For the purposes of calculating], THE APPLICABLE  PERCENTAGE  FOR  the
site  preparation credit component pursuant to paragraph two of subdivi-
sion (a) of section twenty-one of the tax law, and the on-site groundwa-
ter remediation credit component pursuant to paragraph four of  subdivi-
sion  (a)  of  section  twenty-one  of  the  tax  law[,  the  applicable
percentage] shall be based on the level of cleanup achieved pursuant  to
subdivision  four  of  section  27-1415  of  this title and the level of
cleanup of soils to contaminant-specific soil cleanup objectives promul-
gated pursuant to subdivision six of section 27-1415 of this  title,  up
to a maximum of fifty percent, as follows:
  (a)  soil  cleanup for unrestricted use, the protection of groundwater
or the protection of ecological  resources,  the  applicable  percentage
shall be fifty percent;
  (b)  soil cleanup for residential use, the applicable percentage shall
be forty percent,  except  for  Track  4  which  shall  be  twenty-eight
percent;
  (c)  soil  cleanup for commercial use, the applicable percentage shall
be thirty-three percent, except for Track 4 which shall  be  twenty-five
percent;
  (d)  soil  cleanup for industrial use, the applicable percentage shall
be twenty-seven percent, except for Track 4 which  shall  be  twenty-two
percent.
  S  14. Subdivision 5 of section 27-1419 of the environmental conserva-
tion law, as amended by section 9 of part A of chapter 577 of  the  laws
of 2004, is amended to read as follows:
  5.  A certificate of completion issued pursuant to this section may be
transferred [to the applicant's successors or assigns upon  transfer  or
sale  of  the  brownfield site] BY THE APPLICANT OR SUBSEQUENT HOLDER OF
THE CERTIFICATE OF COMPLETION TO A SUCCESSOR TO A REAL  PROPERTY  INTER-
EST,  INCLUDING  LEGAL  TITLE, EQUITABLE TITLE OR LEASEHOLD, IN ALL OR A
PART OF THE BROWNFIELD SITE FOR WHICH THE CERTIFICATE OF COMPLETION  WAS
ISSUED;  PROVIDED,  HOWEVER, ANY TRANSFER OF A CERTIFICATE OF COMPLETION
TO A RESPONSIBLE PARTY SHALL NOT PROVIDE RELIEF FROM LIABILITY. Further,
a certificate of completion may be modified or revoked  by  the  commis-
sioner upon a finding that:

S. 6359                            199                           A. 8559

  (a)  Either  the  applicant, or the applicant's successors or assigns,
has failed to comply with the terms and  conditions  of  the  brownfield
site cleanup agreement;
  (b)  The applicant made a misrepresentation of a material fact tending
to demonstrate that (I) it was qualified as a volunteer OR (II) MET  THE
CRITERIA SET FORTH IN SUBDIVISION ONE-A OF SECTION 27-1407 OF THIS TITLE
FOR  THE  PURPOSE OF RECEIVING THE TANGIBLE PROPERTY CREDIT COMPONENT OF
THE BROWNFIELD REDEVELOPMENT TAX CREDIT PURSUANT TO PARAGRAPH  THREE  OF
SUBDIVISION (A) OF SECTION TWENTY-ONE OF THE TAX LAW;
  (c)  Either  the  applicant, or the applicant's successors or assigns,
made a misrepresentation of a material fact tending to demonstrate  that
the  cleanup  levels identified in the brownfield site cleanup agreement
were reached; [or]
  (d) THE ENVIRONMENTAL EASEMENT CREATED AND RECORDED PURSUANT TO  TITLE
THIRTY-SIX  OF ARTICLE SEVENTY-ONE OF THIS CHAPTER NO LONGER PROVIDES AN
EFFECTIVE OR ENFORCEABLE MEANS OF ENSURING THE  PERFORMANCE  OF  MAINTE-
NANCE,  MONITORING  OR  OPERATING  REQUIREMENTS,  OR THE RESTRICTIONS ON
FUTURE USES, INCLUDING  RESTRICTIONS  ON  DRILLING  FOR  OR  WITHDRAWING
GROUNDWATER; OR
  (E) There is good cause for such modification or revocation.
  S  15.  Section  27-1423  of  the  environmental  conservation  law is
REPEALED.
  S 16. Section  27-1429  of  the  environmental  conservation  law,  as
amended  by  section 13 of part A of chapter 577 of the laws of 2004, is
amended to read as follows:
S 27-1429. Permit waivers.
  The department[, by and through the commissioner,]  shall  be  EXEMPT,
AND  SHALL  BE  authorized  to  exempt  a person from the requirement to
obtain any state or local permit or other authorization for any activity
needed to implement a program for the investigation  and/or  remediation
of  contamination  AT OR EMANATING FROM A BROWNFIELD SITE; provided that
the activity is conducted in a manner which  satisfies  all  substantive
technical requirements applicable to like activity conducted pursuant to
a permit.
  S  17. Subdivision 1 of section 27-1431 of the environmental conserva-
tion law is amended by adding a new paragraph c to read as follows:
  C. TO INSPECT FOR COMPLIANCE WITH THE SITE MANAGEMENT PLAN APPROVED BY
THE DEPARTMENT, INCLUDING (I) INSPECTION OF THE PERFORMANCE  OF  MAINTE-
NANCE,  MONITORING  AND  OPERATIONAL  ACTIVITIES REQUIRED AS PART OF THE
REMEDIAL PROGRAM FOR THE SITE, (II) INSPECTION FOR THE PURPOSE OF ASCER-
TAINING CURRENT USES OF THE SITE, AND (III) TAKING SAMPLES IN ACCORDANCE
WITH PARAGRAPH A OF THIS SUBDIVISION.
  S 17-a. Section 27-1435  of  the  environmental  conservation  law  is
REPEALED.
  S  18.  The  environmental conservation law is amended by adding a new
section 27-1437 to read as follows:
S 27-1437. BCP-EZ PROGRAM.
  1. NOTWITHSTANDING THE PROVISIONS OF THIS TITLE OR ANY OTHER PROVISION
OF LAW, THE DEPARTMENT IS AUTHORIZED TO EXEMPT A VOLUNTEER  FROM  PROCE-
DURAL  REQUIREMENTS  OF THIS TITLE THAT THE DEPARTMENT MAY SPECIFY WHICH
ARE OTHERWISE APPLICABLE TO IMPLEMENTATION OF  AN  INVESTIGATION  AND/OR
REMEDIATION OF CONTAMINATION, PROVIDED THAT:
  (A)  THE  DEPARTMENT  HAS DETERMINED THAT THE BROWNFIELD SITE DOES NOT
POSE A SIGNIFICANT THREAT PURSUANT TO SECTION 27-1411 OF THIS TITLE;

S. 6359                            200                           A. 8559

  (B) THE APPLICANT HAS WAIVED IN WRITING  ANY  CLAIM  FOR  TAX  CREDITS
PURSUANT  TO  SECTION  TWENTY-ONE OF THE TAX LAW ON A FORM PRESCRIBED BY
THE DEPARTMENT; AND
  (C) THE ACTIVITY IS CONDUCTED IN A MANNER WHICH SATISFIES ALL SUBSTAN-
TIVE TECHNICAL REQUIREMENTS APPLICABLE TO LIKE ACTIVITY CONDUCTED PURSU-
ANT TO THIS TITLE.
  2.  WHERE  A  WAIVER  HAS  BEEN  GRANTED, THE APPROVED WORK PLAN FOR A
BROWNFIELD SITE SHALL INCLUDE THE PROCEDURAL REQUIREMENTS THE DEPARTMENT
DETERMINES APPROPRIATE BASED ON SITE SPECIFIC CONSIDERATIONS AND CONSID-
ERATION OF SECTION 27-1417 OF THIS TITLE.
  3. FOR ANY SITE ACCEPTED INTO THE  BCP-EZ  PROGRAM  PURSUANT  TO  THIS
SECTION  WHICH  IS  PURSUING  A TRACK 4 REMEDIATION, IF A CONTAMINANT IS
IDENTIFIED IN SOIL IN EXCESS OF THE REMEDIAL ACTION OBJECTIVES CONTAINED
IN AN APPLICABLE GENERIC TABLE DEVELOPED PURSUANT TO SUBDIVISION SIX  OF
SECTION  27-1415 OF THIS TITLE, THE APPLICANT MAY USE SITE-SPECIFIC DATA
TO DEMONSTRATE TO THE DEPARTMENT THAT THE CONCENTRATION OF  THE  CONTAM-
INANT  IN  THE SOILS REFLECTS BACKGROUND CONDITIONS AND, IN THAT CASE, A
CONTAMINANT-SPECIFIC ACTION OBJECTIVE FOR SUCH CONTAMINANT EQUAL TO SUCH
BACKGROUND CONCENTRATION MAY BE ESTABLISHED.
  S 19. The opening paragraph of subdivision 10 of  section  71-3605  of
the  environmental  conservation law, as added by section 2 of part A of
chapter 1 of the laws of 2003, is amended to read as follows:
  An environmental easement may be enforced in  law  or  equity  by  its
grantor,  by  the  state, or any affected local government as defined in
section 71-3603 of this title. Such easement is enforceable against  the
owner  of  the  burdened property, any lessees, and any person using the
land. Enforcement shall  not  be  defeated  because  of  any  subsequent
adverse  possession,  laches,  estoppel, REVERSION or waiver. No general
law of the state which operates to defeat the enforcement of any  inter-
est  in  real  property  shall  operate to defeat the enforcement of any
environmental easement unless such  general  law  expressly  states  the
intent  to  defeat  the enforcement of such easement or provides for the
exercise of the power of eminent domain. It is  not  a  defense  in  any
action to enforce an environmental easement that:
  S  20. Paragraph 2 of subdivision (a) of section 21 of the tax law, as
amended by section 1 of part H of chapter 577 of the laws  of  2004,  is
amended to read as follows:
  (2)  Site  preparation  credit  component. The site preparation credit
component shall be equal to the applicable percentage of the site prepa-
ration costs paid [or incurred] by the taxpayer with respect to a quali-
fied site. The credit component amount so determined with respect  to  a
site's  qualification  for  a certificate of completion shall be allowed
for the taxable year in which the effective date of the  certificate  of
completion  occurs.  The  credit  component amount determined other than
with respect to such qualification shall be allowed for the taxable year
in which the improvement to which the applicable costs apply  is  placed
in  service  for  up  to  five  taxable years after the issuance of such
certificate of completion.
  S 21. Paragraph 3 of subdivision (a) of section 21 of the tax law,  as
amended  by  chapter  390  of  the  laws  of 2008, is amended to read as
follows:
  (3) Tangible property credit component. The tangible  property  credit
component  shall  be  equal  to the applicable percentage of the cost or
other basis for federal income tax purposes of tangible personal proper-
ty and other  tangible  property,  including  buildings  and  structural
components  of  buildings, which constitute qualified tangible property;

S. 6359                            201                           A. 8559

provided[, however,] that in determining the cost or other basis of such
property, the taxpayer shall exclude the acquisition cost of any item of
property with respect to which a credit under this section was allowable
to  another taxpayer.   WITH RESPECT TO ANY QUALIFIED SITE FOR WHICH THE
DEPARTMENT OF ENVIRONMENTAL CONSERVATION HAS  ISSUED  A  NOTICE  TO  THE
TAXPAYER  ON OR AFTER JULY FIRST, TWO THOUSAND FOURTEEN THAT ITS REQUEST
FOR PARTICIPATION HAS BEEN ACCEPTED UNDER  SUBDIVISION  SIX  OF  SECTION
27-1407  OF  THE  ENVIRONMENTAL  CONSERVATION LAW, THE TAXPAYER MAY ALSO
INCLUDE THE COSTS INCURRED IN CONNECTION WITH PREPARING A SITE  FOR  THE
ERECTION OF A BUILDING OR A COMPONENT OF A BUILDING, SUCH AS THE COST OF
EXCAVATION,  DEMOLITION, TEMPORARY ELECTRIC WIRING, SCAFFOLDING, FENCING
AND SECURITY FACILITIES, TO THE EXTENT THAT SUCH COSTS ARE NOT USED AS A
BASIS FOR COMPUTING THE SITE PREPARATION  COMPONENT  OF  THE  BROWNFIELD
REDEVELOPMENT  TAX CREDIT PURSUANT TO PARAGRAPH TWO OF THIS SUBDIVISION;
AND PROVIDED FURTHER THAT, IN THE CASE OF QUALIFIED SITES  ELIGIBLE  FOR
THE  FIVE  PERCENT AFFORDABLE HOUSING TANGIBLE PROPERTY CREDIT COMPONENT
PURSUANT TO CLAUSE (III) OF SUBPARAGRAPH (B) OF PARAGRAPH FIVE  OF  THIS
SUBDIVISION, THAT PORTION OF THE TANGIBLE PROPERTY CREDIT COMPONENT WILL
BE  DETERMINED BY MULTIPLYING THE TOTAL COSTS QUALIFIED FOR THE TANGIBLE
PROPERTY CREDIT COMPONENT BY A FRACTION, THE NUMERATOR OF WHICH SHALL BE
THE SQUARE FOOTAGE OF SPACE OF THE AFFORDABLE HOUSING UNITS DEDICATED TO
RESIDENTIAL OCCUPANCY AND THE DENOMINATOR OF WHICH SHALL  BE  THE  TOTAL
SQUARE  FOOTAGE  OF  THE SITE. The credit component amount so determined
shall be allowed for the taxable year in which such  qualified  tangible
property  is FIRST placed in service on a qualified site with respect to
which a certificate of completion has been issued to  the  taxpayer,  OR
FOR THE TAXABLE YEAR IN WHICH THE CERTIFICATE OF COMPLETION IS ISSUED IF
THE  QUALIFIED TANGIBLE PROPERTY IS PLACED IN SERVICE PRIOR TO THE ISSU-
ANCE OF THE CERTIFICATE OF COMPLETION, for up to [ten]  FIVE CONSECUTIVE
taxable years [after] FROM THE START OF THE REDEVELOPMENT  OF  THE  SITE
PROVIDED  THAT  THE REDEVELOPMENT STARTS WITHIN TEN YEARS OF the date of
the issuance of such certificate of completion.  The  tangible  property
credit  component  shall be allowed with respect to property leased to a
second party only if such second party is either (i) not a party respon-
sible for the disposal of hazardous waste or the discharge of  petroleum
at  the  site  according to applicable principles of statutory or common
law liability, or (ii) a party responsible according to applicable prin-
ciples of statutory or common law liability if  such  party's  liability
arises  solely  from operation of the site subsequent to the disposal of
hazardous waste or the discharge of petroleum, and is  so  certified  by
the  commissioner  of  environmental  conservation at the request of the
taxpayer, pursuant to section 27-1419 of the environmental  conservation
law.  Notwithstanding any other provision of law to the contrary, in the
case of allowance of credit under this section to  such  a  lessor,  the
commissioner  shall  have  the  authority  to  reveal to such lessor any
information, with respect to the issue of qualified use of  property  by
the  lessee,  which  is the basis for the denial in whole or in part, or
for the recapture, of the credit claimed by such lessor. For purposes of
the tangible property credit component allowed under  this  section  the
taxpayer  to  whom  the certificate of completion is issued, as provided
for under subdivision five  of  section  27-1419  of  the  environmental
conservation  law,  may transfer the benefits and burdens of the certif-
icate of completion, which run with the  land  and  to  the  applicant's
successors  or assigns upon transfer or sale of all or any portion of an
interest or estate in the qualified site. However, the taxpayer to  whom
certificate's benefits and burdens are transferred shall not include the

S. 6359                            202                           A. 8559

cost  of  acquiring  all  or any portion of an interest or estate in the
site and the amounts included in the cost or  other  basis  for  federal
income  tax  purposes  of qualified tangible property already claimed by
the  previous  taxpayer pursuant to this section.  THE TANGIBLE PROPERTY
CREDIT COMPONENT SHALL NOT INCLUDE COSTS PAID  TO  A  RELATED  PARTY  OR
PARTIES, AS SUCH TERM "RELATED PERSON" IS DEFINED IN SUBPARAGRAPH (C) OF
PARAGRAPH THREE OF SUBDIVISION (B) OF SECTION FOUR HUNDRED SIXTY-FIVE OF
THE  INTERNAL  REVENUE  CODE.  ELIGIBLE  COSTS FOR THE TANGIBLE PROPERTY
CREDIT  COMPONENT  ARE  LIMITED  TO   COSTS   ASSOCIATED   WITH   ACTUAL
CONSTRUCTION  OF  TANGIBLE PROPERTY INCORPORATED AS PART OF THE PHYSICAL
STRUCTURE, AND COSTS ASSOCIATED WITH THE PREPARATION  OF  THE  SITE  FOR
ERECTION OF A BUILDING OR A COMPONENT OF A BUILDING THAT ARE NOT PROPER-
LY INCLUDED IN THE SITE PREPARATION COMPONENT.
  S  22. Subparagraph (A) of paragraph 3-a of subdivision (a) of section
21 of the tax law, as added by chapter 390  of  the  laws  of  2008,  is
amended to read as follows:
  (A)  Notwithstanding  any  other provision of law to the contrary, the
tangible property credit component  available  for  any  qualified  site
pursuant  to  paragraph three of this subdivision shall not exceed thir-
ty-five million dollars or three times the SUM OF THE costs included  in
the calculation of the site preparation credit component and the on-site
groundwater  remediation credit component under paragraphs two and four,
respectively, of this subdivision, AND THE COSTS THAT  WOULD  HAVE  BEEN
INCLUDED  IN  THE  CALCULATION  OF  SUCH COMPONENTS IF NOT TREATED AS AN
EXPENSE AND DEDUCTED PURSUANT TO SECTION ONE HUNDRED NINETY-EIGHT OF THE
INTERNAL REVENUE CODE, whichever is less; provided, however,  that:  (1)
in  the  case of a qualified site to be used primarily for manufacturing
activities, the tangible property credit  component  available  for  any
qualified site pursuant to paragraph three of this subdivision shall not
exceed  forty-five  million  dollars  or  six times the SUM OF THE costs
included in the calculation of the site preparation credit component and
the on-site groundwater remediation credit  component  under  paragraphs
two  and  four,  respectively,  of  this subdivision, AND THE COSTS THAT
WOULD HAVE BEEN INCLUDED IN THE CALCULATION OF SUCH  COMPONENTS  IF  NOT
TREATED AS AN EXPENSE AND DEDUCTED PURSUANT TO SECTION ONE HUNDRED NINE-
TY-EIGHT  OF  THE  INTERNAL REVENUE CODE, whichever is less; and (2) the
provisions of this paragraph shall not apply to any qualified  site  for
which  the  department of environmental conservation has issued a notice
to the taxpayer before June twenty-third, two thousand  eight  that  its
request  for  participation  has  been accepted under subdivision six of
section 27-1407 of the environmental conservation law.
  S 23. Subparagraph (D) of paragraph 3-a of subdivision (a) of  section
21  of  the  tax  law,  as  added by chapter 390 of the laws of 2008, is
amended to read as follows:
  (D) [If] WITH RESPECT TO ANY QUALIFIED SITE FOR WHICH  THE  DEPARTMENT
OF ENVIRONMENTAL CONSERVATION HAS ISSUED A NOTICE TO THE TAXPAYER BEFORE
JULY FIRST, TWO THOUSAND FOURTEEN THAT ITS REQUEST FOR PARTICIPATION HAS
BEEN  ACCEPTED  UNDER SUBDIVISION SIX OF SECTION 27-1407 OF THE ENVIRON-
MENTAL CONSERVATION LAW, OR WHERE THE TAXPAYER HAS EITHER BEEN ISSUED OR
RECEIVED A CERTIFICATE OF COMPLETION FROM ANOTHER TAXPAYER UNDER SECTION
27-1419 OF THE ENVIRONMENTAL CONSERVATION LAW  BEFORE  JULY  FIRST,  TWO
THOUSAND  FOURTEEN,  IF  the  qualifying site is located in a brownfield
opportunity area and is developed in  conformance  with  the  goals  and
priorities  established  for that applicable brownfield opportunity area
as designated pursuant to section nine hundred seventy-r of the  general

S. 6359                            203                           A. 8559

municipal law, the applicable percentage of the tangible property credit
component will be increased by two percent.
  S  24. Paragraph 4 of subdivision (a) of section 21 of the tax law, as
amended by section 1 of part H of chapter 577 of the laws  of  2004,  is
amended to read as follows:
  (4)  On-site  groundwater  remediation  credit  component. The on-site
groundwater remediation credit component shall be equal to the  applica-
ble  percentage  of  the  on-site groundwater remediation costs paid [or
incurred] by the taxpayer with respect  to  a  qualified  site  (to  the
extent  that  such groundwater remediation costs are not included in the
determination of the site preparation credit or the cost or other  basis
included  in  the  determination  of  the tangible property credit). The
credit component so  determined  for  costs  [incurred  and]  paid  with
respect  to  and  prior  to  the issuance of a certificate of completion
shall be allowed for the taxable year in which the effective date of the
issuance of a certificate of completion  occurs.  The  credit  component
amount determined in taxable years after the effective date of the issu-
ance of a certificate of completion shall be allowed in the taxable year
such  qualified  costs  are  [incurred  and] paid for up to five taxable
years after the issuance of such certificate of completion.
  S 25. Paragraph 5 of subdivision (a) of section 21 of the tax law,  as
amended  by  section  1 of part H of chapter 577 of the laws of 2004, is
amended to read as follows:
  (5) Applicable percentage. (A) For  purposes  of  COMPUTING  THE  SITE
PREPARATION AND ON-SITE GROUNDWATER REMEDIATION CREDIT COMPONENTS PURSU-
ANT  TO  paragraphs  two[,  three]  and  four  of this subdivision, WITH
RESPECT TO SUCH QUALIFIED SITES FOR WHICH  THE  DEPARTMENT  OF  ENVIRON-
MENTAL  CONSERVATION  HAS  ISSUED  A  NOTICE TO THE TAXPAYER BEFORE JUNE
TWENTY-THIRD, TWO THOUSAND EIGHT THAT ITS REQUEST FOR PARTICIPATION  HAS
BEEN  ACCEPTED  UNDER SUBDIVISION SIX OF SECTION 27-1407 OF THE ENVIRON-
MENTAL CONSERVATION LAW, OR WHERE THE TAXPAYER HAS EITHER BEEN ISSUED OR
RECEIVED A CERTIFICATE OF COMPLETION FROM ANOTHER TAXPAYER UNDER SECTION
27-1419 OF THE ENVIRONMENTAL CONSERVATION LAW BEFORE JUNE  TWENTY-THIRD,
TWO THOUSAND EIGHT, AND, FOR PURPOSES OF COMPUTING THE TANGIBLE PROPERTY
COMPONENT  PURSUANT  TO PARAGRAPH THREE OF THIS SUBDIVISION WITH RESPECT
TO SUCH QUALIFIED  SITES  FOR  WHICH  THE  DEPARTMENT  OF  ENVIRONMENTAL
CONSERVATION  HAS ISSUED A NOTICE TO THE TAXPAYER BEFORE JULY FIRST, TWO
THOUSAND FOURTEEN THAT ITS REQUEST FOR PARTICIPATION HAS  BEEN  ACCEPTED
UNDER  SUBDIVISION SIX OF SECTION 27-1407 OF THE ENVIRONMENTAL CONSERVA-
TION LAW, OR WHERE THE TAXPAYER HAS EITHER BEEN  ISSUED  OR  RECEIVED  A
CERTIFICATE OF COMPLETION FROM ANOTHER TAXPAYER UNDER SECTION 27-1419 OF
THE ENVIRONMENTAL CONSERVATION LAW BEFORE JULY FIRST, TWO THOUSAND FOUR-
TEEN,  the  applicable percentage shall be twelve percent in the case of
credits claimed under article nine, nine-A, thirty-two  or  thirty-three
of  this  chapter,  and ten percent in the case of credits claimed under
article twenty-two of this chapter, except that  where  at  least  fifty
percent  of  the  area  of  the  qualified  site  relating to the credit
provided for in this section is located  in  an  environmental  zone  as
defined  in paragraph six of subdivision (b) of this section, the appli-
cable percentage shall be increased  by  an  additional  eight  percent.
Provided,  however,  as afforded in section 27-1419 of the environmental
conservation law, if the certificate of completion  indicates  that  the
qualified  site has been remediated to Track 1 as that term is described
in subdivision four of section 27-1415 of the environmental conservation
law, the applicable percentage set forth in the first sentence  of  this
paragraph shall be increased by an additional two percent.

S. 6359                            204                           A. 8559

  (B)  WITH  RESPECT  TO SUCH QUALIFIED SITE FOR WHICH THE DEPARTMENT OF
ENVIRONMENTAL CONSERVATION HAS ISSUED A NOTICE TO  THE  TAXPAYER  ON  OR
AFTER  JULY  FIRST,  TWO  THOUSAND FOURTEEN THAT ITS REQUEST FOR PARTIC-
IPATION HAS BEEN ACCEPTED UNDER SUBDIVISION SIX OF  SECTION  27-1407  OF
THE  ENVIRONMENTAL  CONSERVATION  LAW, THE APPLICABLE PERCENTAGE FOR THE
TANGIBLE PROPERTY CREDIT COMPONENT OF THE BROWNFIELD  REDEVELOPMENT  TAX
CREDIT  PURSUANT  TO  PARAGRAPH THREE OF SUBDIVISION (A) OF THIS SECTION
SHALL BE THE SUM OF TEN PERCENT AND THE  FOLLOWING  ADDITIONAL  PERCENT-
AGES, PROVIDED THAT THE TOTAL PERCENTAGE OF THE TANGIBLE PROPERTY CREDIT
COMPONENT  SHALL NOT EXCEED TWENTY-FOUR PERCENT AND IS OTHERWISE SUBJECT
TO THE LIMITATIONS SET FORTH IN PARAGRAPHS THREE AND THREE-A OF SUBDIVI-
SION (A) OF THIS SECTION:
  (I) TEN PERCENT FOR A SITE WITHIN AN ENVIRONMENTAL ZONE;
  (II) FIVE PERCENT FOR A STRATEGIC SITE  LOCATED  WITHIN  A  DESIGNATED
BROWNFIELD  OPPORTUNITY  AREA IF THE PROPOSED DEVELOPMENT OF THE SITE IS
CERTIFIED TO BE IN CONFORMANCE WITH  SUCH  BROWNFIELD  OPPORTUNITY  AREA
PLAN PURSUANT TO SECTION NINE HUNDRED SEVENTY-R OF THE GENERAL MUNICIPAL
LAW; AND
  (III)  FIVE PERCENT FOR SITES DEVELOPED AS AFFORDABLE HOUSING, DEFINED
AS HAVING AT LEAST TWENTY PERCENT OF ITS RESIDENTIAL UNITS SUBJECT TO AN
AGREEMENT WITH A MUNICIPALITY, THE STATE, THE FEDERAL GOVERNMENT, OR  AN
INSTRUMENTALITY  THEREOF,  WHERE  SUCH  AGREEMENT RESTRICTS OCCUPANCY OF
THOSE UNITS TO RESIDENTS WHO QUALIFY IN ACCORDANCE WITH AN INCOME TEST.
  (C) THE TAXPAYER SHALL SUBMIT, IN THE MANNER PRESCRIBED BY THE COMMIS-
SIONER, INFORMATION SUFFICIENT TO DEMONSTRATE THAT  THE  SITE  QUALIFIES
FOR  ANY  CREDIT COMPONENTS AVAILABLE UNDER CLAUSES (I) THROUGH (III) OF
SUBPARAGRAPH (B) OF THIS PARAGRAPH. IF THE SITE IS A  PRIORITY  ECONOMIC
DEVELOPMENT PROJECT, THE TAXPAYER MUST ALSO DEMONSTRATE THAT THE PROJECT
HAS BEEN APPROVED BY THE DEPARTMENT OF ECONOMIC DEVELOPMENT.
  S  26. Paragraph 6 of subdivision (a) of section 21 of the tax law, as
amended by section 1 of part H of chapter 577 of the laws  of  2004,  is
amended to read as follows:
  (6)  Site  preparation costs and on-site groundwater remediation costs
paid [or incurred] by the taxpayer with respect to a qualified site  and
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, which constitute qualified tangible
property shall only include costs paid [or incurred] by the taxpayer  on
or  after  the date of the brownfield site cleanup agreement executed by
the taxpayer and the department of environmental  conservation  pursuant
to section 27-1409 of the environmental conservation law.
  S  27.  Paragraphs  2, 4 and 6 of subdivision (b) of section 21 of the
tax law, as amended by section 1 of part H of chapter 577 of the laws of
2004 and subparagraph (B) and the closing paragraph of  paragraph  6  as
amended  by  section  1 of part G of chapter 62 of the laws of 2006, are
amended to read as follows:
  (2) Site preparation costs. The term "site  preparation  costs"  shall
mean all amounts properly [chargeable] CHARGED to a capital account, (i)
which  are  paid [or incurred] in connection with a site's qualification
for a certificate of completion AND ATTRIBUTABLE TO ACTIVITIES SPECIFIED
IN A DECISION DOCUMENT ISSUED BY THE DEPARTMENT OF ENVIRONMENTAL CONSER-
VATION UNDER SECTION 27-1411 OF THE ENVIRONMENTAL CONSERVATION  LAW  AND
WHICH  MAY INCLUDE COSTS ATTRIBUTABLE TO ACTIVITIES UNDERTAKEN UNDER THE
OVERSIGHT OF THE DEPARTMENT OF HEALTH OR  THE  DEPARTMENT  OF  LABOR  TO
REMEDIATE REGULATED MATERIALS INCLUDING ASBESTOS, LEAD OR POLYCHLORINAT-
ED  BIPHENYLS  IN BUILDINGS WHICH WILL REMAIN ON THE SITE, and (ii) WITH

S. 6359                            205                           A. 8559

RESPECT TO ANY QUALIFIED SITE FOR WHICH THE DEPARTMENT OF  ENVIRONMENTAL
CONSERVATION  HAS ISSUED A NOTICE TO THE TAXPAYER BEFORE JULY FIRST, TWO
THOUSAND FOURTEEN THAT ITS REQUEST FOR PARTICIPATION HAS  BEEN  ACCEPTED
UNDER  SUBDIVISION SIX OF SECTION 27-1407 OF THE ENVIRONMENTAL CONSERVA-
TION LAW, all  other  site  preparation  costs  paid  [or  incurred]  in
connection  with  preparing  a  site for the erection of a building or a
component of a building, or otherwise to establish a site as usable  for
its  industrial,  commercial  (including  the  commercial development of
residential housing), recreational or conservation purposes. [Site]  FOR
PURPOSES  OF SUBPARAGRAPH (II) OF THIS PARAGRAPH, SITE preparation costs
shall include, but not be limited to, the costs of excavation, temporary
electric wiring, scaffolding, demolition costs, and the costs of fencing
and security facilities. Site preparation costs shall  not  include  the
cost of acquiring the site and shall not include amounts included in the
cost  or other basis for federal income tax purposes of qualified tangi-
ble property, as described  in  paragraph  three  of  this  subdivision.
"SITE PREPARATION COSTS" SHALL NOT INCLUDE COSTS PAID TO A RELATED PARTY
OR PARTIES, AS SUCH TERM "RELATED PERSON" IS DEFINED IN SUBPARAGRAPH (C)
OF PARAGRAPH THREE OF SUBDIVISION (B) OF SECTION FOUR HUNDRED SIXTY-FIVE
OF  THE  INTERNAL  REVENUE  CODE.    ELIGIBLE SITE PREPARATION COSTS ARE
LIMITED TO COSTS DIRECTLY ASSOCIATED WITH ACTUAL SITE PREPARATION-RELAT-
ED CONSTRUCTION.
  (4) On-site groundwater remediation costs. The term "on-site groundwa-
ter remediation costs" shall  mean  all  amounts  properly  [chargeable]
CHARGED  to  a  capital  account,  (i)  which  are paid [or incurred] in
connection with a site's qualification for a certificate of  completion,
and  (ii)  include costs which are paid [or incurred] in connection with
the remediation of on-site groundwater contamination and [incurred] PAID
to implement a requirement of the remedial work plan or an interim reme-
dial measure work plan for a qualified site which are  imposed  pursuant
to  subdivisions  two  and three of section 27-1411 of the environmental
conservation law.   "ON-SITE GROUNDWATER REMEDIATION  COSTS"  SHALL  NOT
INCLUDE  COSTS PAID TO A RELATED PARTY OR PARTIES, AS SUCH TERM "RELATED
PERSON" IS DEFINED IN SUBPARAGRAPH (C) OF PARAGRAPH THREE OF SUBDIVISION
(B) OF SECTION FOUR HUNDRED SIXTY-FIVE OF THE INTERNAL REVENUE CODE.  ON
SITE GROUNDWATER REMEDIATION COSTS ARE LIMITED TO COSTS DIRECTLY ASSOCI-
ATED WITH ACTUAL GROUNDWATER REMEDIATION ACTIVITIES.
  (6) Environmental zones (EN-Zones). An "environmental zone" shall mean
an area designated as such by the commissioner of [economic development]
LABOR.  Such areas so designated are areas which are census  tracts  and
block  numbering  areas  which,  as  of  the  [two thousand] MOST RECENT
census, satisfy either of the following criteria:
  (A) areas that have both:
  (i) a poverty rate of at least twenty percent for the  year  to  which
the data relate; and
  (ii)  an  unemployment  rate of at least one and one-quarter times the
statewide unemployment rate for the year to which the data relate, or;
  (B) areas that have a poverty rate of at least two times  the  poverty
rate for the county in which the areas are located for the year to which
the  data relate [provided, however, that a qualified site shall only be
deemed to be located in an environmental zone  under  this  subparagraph
(B)  if such site was the subject of a brownfield site cleanup agreement
pursuant to section 27-1409 of the environmental conservation  law  that
was entered into prior to September first, two thousand ten].
  Such  designation  shall  be made and a list of all such environmental
zones shall be established by the commissioner of [economic development]

S. 6359                            206                           A. 8559

LABOR no later than [December thirty-first, two thousand four  provided,
however,  that a qualified site shall only be deemed to be located in an
environmental zone under subparagraph (B) of this paragraph if such site
was  the  subject  of  a  brownfield  site cleanup agreement pursuant to
section 27-1409 of the environmental conservation law that  was  entered
into  prior  to September first, two thousand ten] NINETY DAYS FOLLOWING
THE OFFICIAL PUBLICATION OF THE MOST RECENT CENSUS.
  S 28. Paragraph 2 of subdivision (b) of section 22 of the tax law,  as
amended  by  section  4 of part H of chapter 577 of the laws of 2004, is
amended to read as follows:
  (2) Amount of credit. The amount of the credit  shall  be  twenty-five
percent  of  the  product  of  (i)  the  benefit period factor, (ii) the
employment number factor, and (iii) the  eligible  real  property  taxes
paid  [or  incurred]  by  the developer of the qualified site during the
taxable year (or the pro rata share of such taxes in the case of a part-
ner in a partnership or a shareholder in  a  New  York  S  corporation),
except  that  if  the  real  property which is the subject of the credit
provided for under this  section  is  attributed  to  a  qualified  site
located  in an environmental zone as defined in paragraph five of subdi-
vision (a) of this section, the amount of the credit shall be the  prod-
uct  of the factors and taxes referred to in subparagraphs (i), (ii) and
(iii) of this paragraph. However, the  amount  of  the  credit  may  not
exceed the credit limitation set forth in paragraph seven of this subdi-
vision.
  S 29. Section 171-r of the tax law is amended by adding a new subdivi-
sion (e) to read as follows:
  (E)  THE  COMMISSIONER, IN CONSULTATION WITH THE COMMISSIONER OF ENVI-
RONMENTAL CONSERVATION, SHALL PUBLISH BY JANUARY THIRTY-FIRST, TWO THOU-
SAND FIFTEEN A SUPPLEMENTAL  BROWNFIELD  CREDIT  REPORT  CONTAINING  THE
INFORMATION  REQUIRED  BY THIS SECTION ABOUT THE CREDITS CLAIMED FOR THE
YEARS TWO THOUSAND FIVE, TWO THOUSAND SIX, AND TWO THOUSAND SEVEN.
  S 30. Section 171-s of the tax law is REPEALED.
  S 31. Section 970-r of the general municipal law is amended by  adding
a new subdivision 10 to read as follows:
  10.  THE SECRETARY SHALL ESTABLISH CRITERIA FOR BROWNFIELD OPPORTUNITY
AREA  CONFORMANCE  DETERMINATIONS FOR PURPOSES OF THE BROWNFIELD CLEANUP
PROGRAM PURSUANT TO TITLE FOURTEEN OF ARTICLE TWENTY-SEVEN OF THE  ENVI-
RONMENTAL  CONSERVATION LAW AND THE BROWNFIELD REDEVELOPMENT TAX CREDITS
PURSUANT TO SECTION TWENTY-ONE OF THE TAX LAW.   IN ESTABLISHING  CRITE-
RIA, THE SECRETARY SHALL BE GUIDED BY, BUT NOT LIMITED TO, THE FOLLOWING
CONSIDERATIONS: HOW THE PROPOSED USE AND DEVELOPMENT ADVANCES THE DESIG-
NATED  BROWNFIELD  OPPORTUNITY  AREA  PLAN'S VISION STATEMENT, GOALS AND
OBJECTIVES FOR REVITALIZATION; HOW THE DENSITY OF DEVELOPMENT AND  ASSO-
CIATED  BUILDINGS AND STRUCTURES ADVANCES THE PLAN'S OBJECTIVES, DESIRED
REDEVELOPMENT  AND  PRIORITIES  FOR  INVESTMENT;  AND  HOW  THE  PROJECT
COMPLIES  WITH  ZONING  AND  OTHER LOCAL LAWS AND STANDARDS TO GUIDE AND
ENSURE APPROPRIATE USE OF THE PROJECT SITE.
  S 32. Section 31 of part H of chapter 1 of the laws of 2003,  amending
the tax law relating to brownfield redevelopment tax credits, remediated
brownfield  credit for real property taxes for qualified sites and envi-
ronmental remediation insurance credits, as amended by  chapter  474  of
the laws of 2012, is amended to read as follows:
  S  31. The tax credits allowed under section [21,] 22 or 23 of the tax
law and the corresponding provisions in articles 9, 9-A, 22, 32  and  33
of the tax law, as added by the provisions of sections one through twen-
ty-nine  of  this act, shall not be applicable [if] TO ANY SITE ACCEPTED

S. 6359                            207                           A. 8559

INTO THE BROWNFIELD CLEANUP PROGRAM ON AND AFTER JULY 1, 2014.  THE  TAX
CREDITS  ALLOWED  UNDER  SECTION 21 OF THE TAX LAW AND THE CORRESPONDING
PROVISIONS IN ARTICLES 9, 9-A, 22, 32 AND 33 OF THE TAX LAW, AS ADDED BY
THE  PROVISIONS  OF  SECTIONS ONE THROUGH TWENTY-NINE OF THIS ACT, SHALL
NOT BE APPLICABLE TO ANY  SITE  ACCEPTED  INTO  THE  BROWNFIELD  CLEANUP
PROGRAM  AFTER  DECEMBER  31,  2022,  PROVIDED,  HOWEVER  THAT ANY SITES
ACCEPTED ON OR BEFORE DECEMBER 31, 2022 MUST HAVE RECEIVED the  [remedi-
ation]  certificate  OF  COMPLETION  required to qualify for any of such
credits [is issued after] BY December 31, [2015] 2025.
  S 33. Any site for which  a  brownfield  cleanup  agreement  with  the
department  of  environmental conservation was entered into (1) prior to
June 23, 2008 and which has not received a certificate of completion  by
December  31, 2015 or (2) on or after June 23, 2008 and prior to July 1,
2014 which has not received a certificate of completion by December  31,
2017, shall be terminated from the brownfield cleanup program. If such a
site  reapplies  for  acceptance into the brownfield cleanup program, it
shall be accepted into the program subject to all  the  requirements  of
title  14  of article 27 of the environmental conservation law in effect
at the time of acceptance.
  S 34. Paragraph c of subdivision 3 of section 27-0923 of the  environ-
mental  conservation  law,  as amended by section 5 of part I of chapter
577 of the laws of 2004, is amended to read as follows:
  c. For the purpose of this  section,  generation  of  hazardous  waste
shall not include retrieval or creation of hazardous waste which must be
disposed  of under an order of or agreement with the department pursuant
to title thirteen or title fourteen of this article or under a  contract
OR  AGREEMENT  with  the  department  pursuant  to title five of article
fifty-six of this chapter OR UNDER AN ORDER OF  OR  AGREEMENT  WITH  THE
UNITED  STATES ENVIRONMENTAL PROTECTION AGENCY OR AN ORDER OF A COURT OF
COMPETENT JURISDICTION, RELATED TO A FACILITY ADDRESSED PURSUANT TO  THE
COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION AND LIABILITY ACT (42
U.S.C.  9601  ET  SEQ.) OR UNDER A WRITTEN AGREEMENT WITH A MUNICIPALITY
WHICH IS SUBJECT TO  A  MEMORANDUM  OF  AGREEMENT  WITH  THE  DEPARTMENT
RELATED TO THE REMEDIATION OF BROWNFIELD SITES.
  S  35.  Subparagraphs  (i) and (vi) of paragraph d of subdivision 1 of
section 72-0402 of the environmental conservation  law,  as  amended  by
chapter 99 of the laws of 2010, are amended to read as follows:
  (i)  under  a  contract  with the department, or with the department's
written approval and  in  compliance  with  department  regulations,  or
pursuant  to an order of the department, the United States environmental
protection agency or a court OF COMPETENT JURISDICTION, related  to  the
cleanup  or  remediation  of  a  hazardous  materials or hazardous waste
spill, discharge, or surficial cleanup, pursuant to this chapter; or
  (vi) under a brownfield site cleanup  agreement  with  the  department
pursuant to section 27-1409 of this chapter OR UNDER AN AGREEMENT WITH A
MUNICIPALITY  WHICH  IS  SUBJECT  TO  A MEMORANDUM OF AGREEMENT WITH THE
DEPARTMENT RELATED TO THE REMEDIATION OF BROWNFIELD SITES; or
  S 36. Subdivision 1 of section 1285-q of the public  authorities  law,
as  added  by  section  6 of part I of chapter 1 of the laws of 2003, is
amended to read as follows:
  1. Subject to chapter fifty-nine of the  laws  of  two  thousand,  but
notwithstanding any other provisions of law to the contrary, in order to
assist the corporation in undertaking the administration and the financ-
ing  of  hazardous  waste  site  remediation projects for payment of the
state's share of the costs of the remediation of hazardous waste  sites,
in  accordance  with title thirteen of article twenty-seven of the envi-

S. 6359                            208                           A. 8559

ronmental conservation law  and  section  ninety-seven-b  of  the  state
finance  law, and for payment of state costs associated with the remedi-
ation of offsite contamination at significant threat sites  as  provided
in  section 27-1411 of the environmental conservation law, AND FOR ENVI-
RONMENTAL RESTORATION PROJECTS PURSUANT TO TITLE FIVE OF ARTICLE  FIFTY-
SIX  OF THE ENVIRONMENTAL CONSERVATION LAW pursuant to capital appropri-
ations  made  to  the  department  of  environmental  conservation,  the
director  of the division of budget and the corporation are each author-
ized to enter into one or more service contracts, none  of  which  shall
exceed  twenty  years in duration, upon such terms and conditions as the
director and the corporation may agree, so as to annually provide to the
corporation in the aggregate, a  sum  not  to  exceed  the  annual  debt
service  payments  and related expenses required for any bonds and notes
authorized pursuant to section twelve hundred ninety of this title.  Any
service  contract  entered  into  pursuant to this section shall provide
that the obligation of the state to fund or to pay the  amounts  therein
provided for shall not constitute a debt of the state within the meaning
of  any constitutional or statutory provision and shall be deemed execu-
tory only to the extent of moneys available for such  purposes,  subject
to annual appropriation by the legislature. Any such service contract or
any  payments  made or to be made thereunder may be assigned and pledged
by the corporation as security for its bonds and  notes,  as  authorized
pursuant to section twelve hundred ninety of this title.
  S  37. Section 56-0501 of the environmental conservation law, as added
by chapter 413 of the laws of 1996, is amended to read as follows:
S 56-0501. Allocation of moneys.
  1. Of the moneys received by the state from the sale of bonds pursuant
to the Clean Water/Clean Air Bond  Act  of  1996,  two  hundred  million
dollars ($200,000,000) shall be available for disbursements for environ-
mental restoration projects.
  2. ENVIRONMENTAL RESTORATION PROJECTS MAY BE FUNDED USING THE PROCEEDS
OF  BONDS ISSUED PURSUANT TO SECTION TWELVE HUNDRED EIGHTY-FIVE-Q OF THE
PUBLIC AUTHORITIES LAW.
  S 38. Subdivision 6 of section 56-0502 of the environmental  conserva-
tion  law,  as amended by section 2 of part D of chapter 577 of the laws
of 2004, is amended to read as follows:
  6. "State assistance", for purposes of this title, shall mean  in  the
case  of  a contract authorized by subdivision one of section 56-0503 of
this title, payments made to a municipality  to  reimburse  the  munici-
pality  for the state share of the costs incurred by the municipality to
undertake an environmental restoration project OR  IN  THE  CASE  OF  AN
AGREEMENT  AUTHORIZED  BY  SUBDIVISION  THREE OF SECTION 56-0503 OF THIS
TITLE, COSTS INCURRED BY THE STATE TO UNDERTAKE AN ENVIRONMENTAL  RESTO-
RATION PROJECT BUT NOT REIMBURSED BY A MUNICIPALITY.
  S  39.  Paragraph (c) of subdivision 2 of section 56-0503 of the envi-
ronmental conservation law, as amended by section 4 of part D of chapter
1 of the laws of 2003, is amended and a new subdivision 3  is  added  to
read as follows:
  (c)  A  provision  that THE MUNICIPALITY SHALL ASSIST IN IDENTIFYING A
RESPONSIBLE PARTY BY SEARCHING LOCAL  RECORDS,  INCLUDING  PROPERTY  TAX
ROLLS,  OR  DOCUMENT  REVIEWS,  AND  if, in accordance with the required
departmental approval of any settlement with a  responsible  party,  any
responsible party payments become available to the municipality, before,
during  or after the completion of an environmental restoration project,
which were not included when the state share was calculated pursuant  to
this  section, the state assistance share shall be recalculated, and the

S. 6359                            209                           A. 8559

municipality shall pay to the state, for deposit into the  environmental
restoration  project account of the hazardous waste remedial fund estab-
lished under section  ninety-seven-b  of  the  state  finance  law,  the
difference  between the original state assistance payment and the recal-
culated state share. Recalculation of the state share shall be done each
time a payment from a responsible party is received by the municipality;
  3. THE DEPARTMENT MAY UNDERTAKE AN ENVIRONMENTAL  RESTORATION  PROJECT
ON  BEHALF OF A MUNICIPALITY UPON REQUEST.  IF THE DEPARTMENT UNDERTAKES
THE PROJECT ON BEHALF OF THE MUNICIPALITY, THE STATE SHALL ENTER INTO AN
AGREEMENT WITH THE MUNICIPALITY AND  THE  AGREEMENT  SHALL  REQUIRE  THE
MUNICIPALITY  TO  PERIODICALLY  PROVIDE ITS SHARE TO THE STATE FOR COSTS
INCURRED DURING THE PROGRESS OF SUCH PROJECT. THE  MUNICIPALITY'S  SHARE
SHALL  BE  THE  SAME  AS WOULD BE REQUIRED UNDER SUBDIVISION ONE OF THIS
SECTION. THE AGREEMENT SHALL INCLUDE ALL PROVISIONS SPECIFIED IN  SUBDI-
VISION  TWO  OF  THIS SECTION AS APPROPRIATE.   FOR PURPOSES OF PROJECTS
SUBJECT  TO  AGREEMENTS  UNDER  THIS  SUBDIVISION,  ALL  REFERENCES   TO
CONTRACTS IN THIS TITLE SHALL ALSO APPLY TO AGREEMENTS UNDER THIS SUBDI-
VISION AS APPROPRIATE.
  S  40. Subdivision 4 of section 56-0505 of the environmental conserva-
tion law, as amended by section 5 of part D of chapter 1 of the laws  of
2003, is amended to read as follows:
  4.  After  completion  of  such  project, the municipality may use the
property for public purposes or may dispose of it. If  the  municipality
shall  dispose  of  such  property  by sale to a responsible party, such
party shall pay to such municipality, in addition to such other  consid-
eration,  an amount of money constituting the amount of state assistance
provided [to the municipality] under this title  plus  accrued  interest
and transaction costs and the municipality shall deposit that money into
the  environmental  restoration  project  account of the hazardous waste
remedial fund established under  section  ninety-seven-b  of  the  state
finance law.
  S  41.  Subdivisions  3  and 4 of section 56-0508 of the environmental
conservation law, as added by section 7 of part D of chapter  1  of  the
laws of 2003, are amended to read as follows:
  3. such temporary incidents of ownership by such taxing district shall
also qualify it as being the owner of such property [for the purposes of
obtaining]  TO  BE  ELIGIBLE  FOR funding from the state of New York for
such environmental restoration investigation project under this  article
or  for such funding from any source pursuant to any other state, feder-
al, or local law, but such incidents of ownership shall  not  be  suffi-
cient  to  qualify  it as the owner of such property for the purposes of
holding it wholly or partially liable for any damages, past, present, or
future from any release of any hazardous material, substance, or contam-
inant into the air, ground, or water, unless such release was caused  by
such taxing district.
  4.  within thirty days of the completion of the environmental restora-
tion investigation project and the receipt by the taxing jurisdiction of
the final report of such investigation, such taxing  jurisdiction  shall
file  such  report  with  the court on notice to the court and all other
parties of record, and the stay  of  the  foreclosure  shall  be  lifted
(unless  lifted  earlier  by  a prior court order), and all incidents of
temporary ownership of the taxing jurisdiction  that  was  awarded  such
taxing  district, except any right [to receive funding] for the environ-
mental restoration investigation project TO BE FUNDED,  shall  cease  to
exist,  and nothing in this subdivision shall preclude the taxing juris-
diction  that  conducted  the  environmental  restoration  investigation

S. 6359                            210                           A. 8559

project  or  the  taxing  jurisdiction  that  commenced  the foreclosure
action, if it is a different taxing jurisdiction than the taxing  juris-
diction  which  conducted the investigation, from withdrawing the parcel
from  foreclosure pursuant to section eleven hundred thirty-eight of the
real property tax law.
  S 42. Subdivision 2 and paragraph (f) of subdivision 3 of section 97-b
of the state finance law, as amended by section 4 of part I of chapter 1
of the laws of 2003, are amended to read as follows:
  2. Such fund shall consist of all of the following:
  (a) moneys appropriated for transfer to the fund's site  investigation
and  construction  account;  (b) all fines and other sums accumulated in
the fund prior to April first, nineteen hundred eighty-eight pursuant to
section 71-2725 of the environmental conservation law for deposit in the
fund's site investigation  and  construction  account;  (c)  all  moneys
collected or received by the department of taxation and finance pursuant
to  section 27-0923 of the environmental conservation law for deposit in
the fund's industry fee transfer account; (d) all moneys paid  into  the
fund  pursuant  to section 72-0201 of the environmental conservation law
which shall be deposited in the fund's industry  fee  transfer  account;
(e) all moneys paid into the fund pursuant to section one hundred eight-
y-six  of  the  navigation  law  which  shall be deposited in the fund's
industry fee transfer account; (f) [all moneys paid  into  the  fund  by
municipalities  for repayment of landfill closure loans made pursuant to
title five of article fifty-two of the  environmental  conservation  law
for  deposit  in the fund's site investigation and construction account;
(g)] all monies recovered under sections 56-0503, 56-0505 and 56-0507 of
the environmental conservation law into the fund's environmental  resto-
ration  project  account; [(h) all] (G) fees paid into the fund pursuant
to section [72-0403] 72-0402 of the environmental conservation law which
shall be deposited in the fund's industry fee  transfer  account;  [(i)]
(H)  payments  received  for all state costs incurred in negotiating and
overseeing the implementation  of  brownfield  site  cleanup  agreements
pursuant  to title fourteen OF ARTICLE TWENTY-SEVEN of the environmental
conservation law shall be deposited in the hazardous  waste  remediation
oversight and assistance account; and [(j)] (I) other moneys credited or
transferred  thereto  from  any  other fund or source for deposit in the
fund's site investigation and construction account.
  (f) to undertake such remedial measures as the department of  environ-
mental  conservation may determine necessary due to environmental condi-
tions related to the property subject to an agreement [to provide  state
assistance]  OR  CONTRACT  under  title five of article fifty-six of the
environmental conservation law [that were unknown to such department  at
the  time  of its approval of such agreement which indicates that condi-
tions on such property are not sufficiently protective of  human  health
for  its  reasonably anticipated uses or due to information received, in
whole or in part, after such department's approval of  such  agreement's
final  engineering  report and certification], which indicates that such
agreement's remedial activities are not sufficiently protective of human
health for such property's reasonably anticipated uses; and, [respecting
the monies in the environmental restoration project account in excess of
ten million dollars,] shall provide state assistance under title five of
article fifty-six of the environmental conservation law;
  S 43. Severability. If any clause, sentence,  paragraph,  subdivision,
section  or part of this act shall be adjudged by any court of competent
jurisdiction to be invalid, such judgment shall not  affect,  impair  or
invalidate the remainder thereof, but shall be confined in its operation

S. 6359                            211                           A. 8559

to the clause, sentence, paragraph, subdivision, section or part thereof
directly  involved  in the controversy in which such judgment shall have
been rendered. It is hereby declared to be the intent of the legislature
that  this  act  would have been enacted even if such invalid provisions
had not been included herein.
  S 44. This act shall take effect July 1, 2014; provided, however, that
the department of environmental conservation shall not charge volunteers
in the brownfield cleanup program for oversight costs for any  sites  in
the program incurred on or after July 1, 2014.

                                 PART R

  Section  1.  Section 208 of the tax law is amended by adding three new
subdivisions 13, 14 and 15 to read as follows:
  13. THE TERM "MANUFACTURER" MEANS A TAXPAYER OR,  IN  THE  CASE  OF  A
COMBINED  REPORT,  A  COMBINED  GROUP, THAT, DURING THE TAXABLE YEAR, IS
PRINCIPALLY ENGAGED IN MANUFACTURING. A TAXPAYER OR A COMBINED GROUP  IS
PRINCIPALLY  ENGAGED  IN MANUFACTURING IF MORE THAN FIFTY PERCENT OF THE
GROSS RECEIPTS OF THE TAXPAYER  OR  THE  COMBINED  GROUP,  RESPECTIVELY,
DURING  THE  TAXABLE YEAR ARE DERIVED FROM THE SALE OF GOODS PRODUCED BY
MANUFACTURING. IN COMPUTING A COMBINED GROUP'S GROSS RECEIPTS, INTERCOR-
PORATE RECEIPTS SHALL BE ELIMINATED. IN COMPUTING GROSS RECEIPTS  FOR  A
TAXPAYER THAT IS A PARTNER IN PARTNERSHIP, INTER-ENTITY RECEIPTS BETWEEN
THE TAXPAYER AND SUCH PARTNERSHIP SHALL BE ELIMINATED.
  14.  (A)  THE  TERM  "MANUFACTURING"  MEANS THE PROCESS OF WORKING RAW
MATERIALS INTO WARES SUITABLE FOR USE OR WHICH  GIVES  NEW  SHAPES,  NEW
QUALITY  OR  NEW  COMBINATIONS  TO MATTER WHICH ALREADY HAS GONE THROUGH
SOME ARTIFICIAL PROCESS BY THE USE OF MACHINERY, TOOLS,  APPLIANCES  AND
OTHER SIMILAR EQUIPMENT.
  (B)  NOTWITHSTANDING  THE DEFINITION OF MANUFACTURING IN PARAGRAPH (A)
OF THIS SUBDIVISION:
  (I) THE GENERATION AND DISTRIBUTION OF ELECTRICITY, THE EXTRACTION AND
DISTRIBUTION OF NATURAL GAS, AND THE PRODUCTION OF STEAM ASSOCIATED WITH
THE GENERATION OF ELECTRICITY DOES NOT CONSTITUTE MANUFACTURING.
  (II) THE CREATION, PRODUCTION OR REPRODUCTION OF  A  FILM,  TELEVISION
SHOW OR COMMERCIAL DOES NOT CONSTITUTE MANUFACTURING.
  (III)  THE  BLENDING OF TWO OR MORE FUELS DOES NOT CONSTITUTE MANUFAC-
TURING.
  (IV) THE MASS PRODUCTION OF FOOD  PRODUCTS  FOR  WHOLESALE  COMMERCIAL
DISTRIBUTION AND SALE CONSTITUTES MANUFACTURING.
  15.  THE  TERM  "QUALIFIED NEW YORK MANUFACTURER" MEANS A MANUFACTURER
THAT HAS PROPERTY IN THE STATE THAT IS USED IN MANUFACTURING AND  EITHER
THE  FAIR MARKET VALUE OF THAT PROPERTY AT THE CLOSE OF THE TAXABLE YEAR
IS AT LEAST TEN MILLION DOLLARS OR ALL OF ITS REAL AND PERSONAL PROPERTY
IS LOCATED IN NEW YORK. A TAXPAYER OR, IN THE CASE OF A COMBINED REPORT,
A COMBINED GROUP, THAT DOES NOT  SATISFY  THE  CRITERIA  IN  SUBDIVISION
THIRTEEN OF THIS SECTION MAY BE A QUALIFIED NEW YORK MANUFACTURER IF THE
TAXPAYER  OR THE COMBINED GROUP EMPLOYS DURING THE TAXABLE YEAR AT LEAST
TWO THOUSAND FIVE HUNDRED EMPLOYEES IN MANUFACTURING IN NEW YORK AND THE
TAXPAYER OR THE COMBINED GROUP HAS PROPERTY IN THE STATE USED  IN  MANU-
FACTURING,  THE  ADJUSTED BASIS OF WHICH FOR FEDERAL INCOME TAX PURPOSES
AT THE CLOSE OF THE  TAXABLE  YEAR  IS  AT  LEAST  ONE  HUNDRED  MILLION
DOLLARS.
  S 2. Section 210 of the tax law is amended by adding a new subdivision
48 to read as follows:

S. 6359                            212                           A. 8559

  48.  REAL  PROPERTY  TAX CREDIT FOR MANUFACTURERS. (A) A QUALIFIED NEW
YORK MANUFACTURER, AS DEFINED IN  SUBDIVISION  FIFTEEN  OF  SECTION  TWO
HUNDRED  EIGHT OF THIS ARTICLE, WILL BE ALLOWED A CREDIT EQUAL TO TWENTY
PERCENT OF THE REAL PROPERTY TAX IT PAID DURING  THE  TAXABLE  YEAR  FOR
REAL  PROPERTY  OWNED BY SUCH MANUFACTURER IN NEW YORK WHICH WAS PRINCI-
PALLY USED DURING THE TAXABLE YEAR FOR MANUFACTURING TO THE  EXTENT  NOT
DEDUCTED  IN  DETERMINING  ENTIRE  NET  INCOME.  THIS CREDIT WILL NOT BE
ALLOWED IF THE REAL PROPERTY TAXES THAT ARE THE BASIS  FOR  THIS  CREDIT
ARE INCLUDED IN THE CALCULATION OF ANOTHER CREDIT CLAIMED BY THE TAXPAY-
ER.
  (B) FOR PURPOSES OF THIS SUBDIVISION, THE TERM REAL PROPERTY TAX MEANS
A  CHARGE  IMPOSED UPON REAL PROPERTY BY OR ON BEHALF OF A COUNTY, CITY,
TOWN, VILLAGE OR  SCHOOL  DISTRICT  FOR  MUNICIPAL  OR  SCHOOL  DISTRICT
PURPOSES,  PROVIDED  THAT  THE  CHARGE  IS LEVIED FOR THE GENERAL PUBLIC
WELFARE BY THE PROPER TAXING AUTHORITIES AT  A  LIKE  RATE  AGAINST  ALL
PROPERTY  OVER  WHICH  SUCH  AUTHORITIES HAVE JURISDICTION, AND PROVIDED
THAT WHERE TAXES ARE LEVIED PURSUANT TO ARTICLE EIGHTEEN OR NINETEEN  OF
THE REAL PROPERTY TAX LAW, THE PROPERTY MUST HAVE BEEN TAXED AT THE RATE
DETERMINED  FOR  THE CLASS IN WHICH IT IS CONTAINED, AS PROVIDED BY SUCH
ARTICLE EIGHTEEN OR NINETEEN, WHICHEVER IS  APPLICABLE.  THE  TERM  REAL
PROPERTY TAX DOES NOT INCLUDE A CHARGE FOR LOCAL BENEFITS, INCLUDING ANY
PORTION OF THAT CHARGE THAT IS PROPERLY ALLOCATED TO THE COSTS ATTRIBUT-
ABLE  TO  MAINTENANCE  OR INTEREST, WHEN (1) THE PROPERTY SUBJECT TO THE
CHARGE IS LIMITED TO THE PROPERTY THAT BENEFITS FROM THE CHARGE, OR  (2)
THE  AMOUNT  OF  THE CHARGE IS DETERMINED BY THE BENEFIT TO THE PROPERTY
ASSESSED, OR (3) THE IMPROVEMENT FOR WHICH THE CHARGE IS ASSESSED  TENDS
TO  INCREASE  THE  PROPERTY  VALUE.  THE TERM REAL PROPERTY TAX DOES NOT
INCLUDE A PAYMENT IN LIEU OF  TAXES  MADE  BY  THE  QUALIFIED  NEW  YORK
MANUFACTURER.
  (C)  CREDIT  RECAPTURE. WHERE A QUALIFIED NEW YORK MANUFACTURER'S REAL
PROPERTY TAXES WHICH WERE THE BASIS FOR  THE  ALLOWANCE  OF  THE  CREDIT
PROVIDED FOR UNDER THIS SUBDIVISION ARE SUBSEQUENTLY REDUCED AS A RESULT
OF A FINAL ORDER IN ANY PROCEEDING UNDER ARTICLE SEVEN OF THE REAL PROP-
ERTY  TAX LAW OR OTHER PROVISION OF LAW, THE TAXPAYER SHALL ADD BACK, IN
THE TAXABLE YEAR IN WHICH SUCH FINAL ORDER IS ISSUED, THE EXCESS OF  (1)
THE  AMOUNT OF CREDIT ORIGINALLY ALLOWED FOR A TAXABLE YEAR OVER (2) THE
AMOUNT OF CREDIT DETERMINED BASED UPON THE REDUCED 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.
  (D)  THE  CREDIT  ALLOWED  UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR
SHALL NOT REDUCE THE TAX DUE FOR SUCH  YEAR  TO  LESS  THAN  THE  AMOUNT
PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION ONE OF THIS SECTION. HOWEVER,
ANY AMOUNT OF CREDIT NOT DEDUCTIBLE IN SUCH TAXABLE YEAR SHALL BE TREAT-
ED  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 THOU-
SAND  EIGHTY-EIGHT OF THIS CHAPTER NOTWITHSTANDING, NO INTEREST SHALL BE
PAID THEREON.
  S 3. Subparagraph (B) of paragraph 1 of subsection (i) of section  606
of  the  tax  law  is amended by adding a new clause (xxxvii) to read as
follows:

(XXXVII) REAL PROPERTY TAX            AMOUNT OF CREDIT UNDER

S. 6359                            213                           A. 8559

CREDIT FOR MANUFACTURERS UNDER        SUBDIVISION FORTY-EIGHT OF
SUBSECTION (XX)                       SECTION TWO HUNDRED TEN

  S  4.  Subsections  (yy)  and  (zz)  of section 606 of the tax law, as
relettered by section 5 of part H of chapter 1 of the laws of 2003,  are
relettered  subsections  (yyy)  and  (zzz)  and a new subsection (xx) is
added to read as follows:
  (XX) REAL PROPERTY TAX CREDIT FOR MANUFACTURERS. (1) A  QUALIFIED  NEW
YORK  MANUFACTURER  WILL  BE ALLOWED A CREDIT EQUAL TO TWENTY PERCENT OF
THE REAL PROPERTY TAX IT PAID DURING THE TAXABLE YEAR FOR REAL  PROPERTY
OWNED BY SUCH MANUFACTURER IN NEW YORK WHICH WAS PRINCIPALLY USED DURING
THE TAXABLE YEAR FOR MANUFACTURING TO THE EXTENT NOT DEDUCTED IN COMPUT-
ING  FEDERAL  ADJUSTED  GROSS INCOME. THIS CREDIT WILL NOT BE ALLOWED IF
THE REAL PROPERTY TAXES THAT ARE THE BASIS FOR THIS CREDIT ARE  INCLUDED
IN THE CALCULATION OF ANOTHER CREDIT CLAIMED BY THE TAXPAYER.
  (2)(A)  THE  TERM QUALIFIED NEW YORK MANUFACTURER HAS THE SAME MEANING
AS UNDER SUBPARAGRAPH (B) OF PARAGRAPH TWO OF  SUBSECTION  (A)  OF  THIS
SECTION.
  (B)  THE TERM REAL PROPERTY TAX MEANS A CHARGE IMPOSED UPON REAL PROP-
ERTY BY OR ON BEHALF OF A COUNTY, CITY, TOWN, VILLAGE OR SCHOOL DISTRICT
FOR MUNICIPAL OR SCHOOL DISTRICT PURPOSES, PROVIDED THAT THE  CHARGE  IS
LEVIED  FOR  THE GENERAL PUBLIC WELFARE BY THE PROPER TAXING AUTHORITIES
AT A LIKE RATE AGAINST ALL PROPERTY OVER  WHICH  SUCH  AUTHORITIES  HAVE
JURISDICTION, AND PROVIDED THAT WHERE TAXES ARE LEVIED PURSUANT TO ARTI-
CLE EIGHTEEN OR NINETEEN OF THE REAL PROPERTY TAX LAW, THE PROPERTY MUST
HAVE  BEEN  TAXED  AT  THE  RATE DETERMINED FOR THE CLASS IN WHICH IT IS
CONTAINED, AS PROVIDED BY SUCH ARTICLE EIGHTEEN OR  NINETEEN,  WHICHEVER
IS  APPLICABLE. THE TERM REAL PROPERTY TAX DOES NOT INCLUDE A CHARGE FOR
LOCAL BENEFITS, INCLUDING ANY PORTION OF THAT CHARGE  THAT  IS  PROPERLY
ALLOCATED TO THE COSTS ATTRIBUTABLE TO MAINTENANCE OR INTEREST, WHEN (I)
THE PROPERTY SUBJECT TO THE CHARGE IS LIMITED TO THE PROPERTY THAT BENE-
FITS  FROM THE CHARGE, OR (II) THE AMOUNT OF THE CHARGE IS DETERMINED BY
THE BENEFIT TO THE PROPERTY ASSESSED, OR (III) THE IMPROVEMENT FOR WHICH
THE CHARGE IS ASSESSED TENDS TO INCREASE THE PROPERTY  VALUE.  THE  TERM
REAL  PROPERTY  TAX  DOES NOT INCLUDE A PAYMENT IN LIEU OF TAXES MADE BY
THE QUALIFIED NEW YORK MANUFACTURER.
  (3) CREDIT RECAPTURE. WHERE A QUALIFIED NEW YORK  MANUFACTURER'S  REAL
PROPERTY  TAXES  WHICH  WERE  THE  BASIS FOR THE ALLOWANCE OF THE CREDIT
PROVIDED FOR UNDER THIS SUBDIVISION ARE SUBSEQUENTLY REDUCED AS A RESULT
OF A FINAL ORDER IN ANY PROCEEDING UNDER ARTICLE SEVEN OF THE REAL PROP-
ERTY TAX LAW OR OTHER PROVISION OF LAW, THE TAXPAYER SHALL ADD BACK,  IN
THE  TAXABLE YEAR IN WHICH SUCH FINAL ORDER IS ISSUED, THE EXCESS OF (I)
THE AMOUNT OF CREDIT ORIGINALLY ALLOWED FOR A TAXABLE YEAR OVER (II) THE
AMOUNT OF CREDIT DETERMINED BASED UPON THE REDUCED 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.
  (4)  IF THE AMOUNT OF THE CREDIT ALLOWED UNDER THIS SUBSECTION FOR ANY
TAXABLE YEAR EXCEEDS THE TAXPAYER'S TAX FOR SUCH YEAR, THE  EXCESS  WILL
BE  TREATED  AS  AN OVERPAYMENT TO BE CREDITED OR REFUNDED IN ACCORDANCE
WITH THE PROVISIONS OF SECTION SIX HUNDRED EIGHTY-SIX OF  THIS  ARTICLE,
PROVIDED HOWEVER, NO INTEREST WILL BE PAID THEREON.
  S 5. Paragraph (b) of subdivision 12 of section 210 of the tax law, as
amended  by chapter 817 of the laws of 1987, subparagraph (i) as amended

S. 6359                            214                           A. 8559

by chapter 637 of the laws of 2008 and clause (E) of  subparagraph  (ii)
as  added  by  chapter  393  of  the laws of 2005, is amended to read as
follows:
  (b)  (i)  A credit shall be allowed under this subdivision TO A QUALI-
FIED NEW YORK MANUFACTURER, A QUALIFIED NEW YORK  AGRICULTURAL  BUSINESS
OR  A  QUALIFIED  NEW  YORK  MINING  BUSINESS  with  respect to tangible
personal property and other tangible property, including  buildings  and
structural  components of buildings, which (A) are[:] depreciable pursu-
ant to section one hundred sixty-seven of the internal revenue code, (B)
have a useful life of four years or more, (C) are acquired  by  purchase
as  defined  in  section  one  hundred  seventy-nine (d) of the internal
revenue code, (D) HAVE NOT BEEN PREVIOUSLY THE SUBJECT OF AN  INVESTMENT
TAX CREDIT OR EMPIRE ZONE INVESTMENT TAX CREDIT ALLOWED UNDER THIS CHAP-
TER  TO  ANOTHER  TAXPAYER,  (E) have a situs in this state, and (F) are
[(A)] principally used by the taxpayer in the production  of  goods  [by
manufacturing,  processing,  assembling,  refining,  mining, extracting,
farming, agriculture, horticulture, floriculture, viticulture or commer-
cial fishing, (B) industrial waste treatment facilities or air pollution
control facilities, used in the taxpayer's trade or business,  (C)]  FOR
SALE  OR ARE 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 securi-
ties 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 compa-
ny 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,  assumption,  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 taxpayer's business
as an exchange registered as a national securities exchange  within  the
meaning  of  sections 3(a)(1) and 6(a) of the Securities 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 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) princi-
pally 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 elec-
trical  capacity,  food services, security services, and heating, venti-
lation and air conditioning. 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 secu-
rities exchange or board of trade, is allowed a credit under this subdi-
vision if the property is used by its affiliated regulated broker, deal-
er, registered investment adviser, national securities exchange or board

S. 6359                            215                           A. 8559

of trade in accordance with this subdivision. For purposes of  determin-
ing  if the property is principally used in qualifying uses, the uses by
the taxpayer described in clauses (D) and (E) of this  subparagraph  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 (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 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 taxa-
ble 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 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  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 employ-
ment test or this employment test must be satisfied through  the  aggre-
gation  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].
  (ii) For purposes of this paragraph, the following  definitions  shall
apply--
  (A)  [Manufacturing  shall  mean  the process of working raw materials
into wares suitable for use or which gives new shapes,  new  quality  or
new  combinations  to matter which already has gone through some artifi-
cial process by the use of machinery, tools, appliances and other  simi-
lar  equipment.] Property used in the production of goods FOR SALE shall
include machinery, equipment or other tangible property which is princi-
pally used in the repair and service of other  machinery,  equipment  or
other  tangible property used principally in the production of goods FOR
SALE and shall include all facilities used in the production  operation,
including  storage  of  material  to  be  used  in production and of the
products that are produced.
  (B) Research and development property shall  mean  property  which  is
used  for  purposes  of  research and development in the experimental or
laboratory sense. Such purposes shall not be deemed to include the ordi-
nary testing or inspection of materials or products for quality control,
efficiency surveys, management studies, consumer  surveys,  advertising,

S. 6359                            216                           A. 8559

promotions, or research in connection with literary, historical or simi-
lar projects.
  (C) [Industrial waste treatment facilities shall mean property consti-
tuting  facilities for the treatment, neutralization or stabilization of
industrial waste and other wastes (as the terms "industrial  waste"  and
"other  wastes"  are  defined  in  section  17-0105 of the environmental
conservation law) from a point immediately preceding the point  of  such
treatment,  neutralization  or  stabilization  to the point of disposal,
including the necessary pumping and transmitting facilities, but exclud-
ing such facilities installed for the primary purpose of salvaging mate-
rials which are usable in the manufacturing process or are  marketable.]
A  QUALIFIED NEW YORK AGRICULTURAL BUSINESS SHALL MEAN A TAXPAYER OR, IN
THE CASE OF A COMBINED REPORT, A COMBINED GROUP, PRINCIPALLY ENGAGED  IN
FARMING, AGRICULTURE, HORTICULTURE, FLORICULTURE, VITICULTURE OR COMMER-
CIAL FISHING IN THE STATE. A TAXPAYER OR A COMBINED GROUP IS PRINCIPALLY
ENGAGED IN FARMING, AGRICULTURE, HORTICULTURE, FLORICULTURE, VITICULTURE
OR  COMMERCIAL  FISHING  IN  THE STATE IF MORE THAN FIFTY PERCENT OF THE
GROSS RECEIPTS OF THE TAXPAYER  OR  THE  COMBINED  GROUP,  RESPECTIVELY,
DURING  THE  TAXABLE YEAR ARE DERIVED FROM THE SALE OF GOODS PRODUCED BY
THE TAXPAYER BY ANY OF THE ACTIVITIES SPECIFIED IN  THIS  SENTENCE  THAT
ARE  CONDUCTED  IN  THE  STATE.  IN  COMPUTING  A COMBINED GROUP'S GROSS
RECEIPTS, INTERCORPORATE RECEIPTS  SHALL  BE  ELIMINATED.  IN  COMPUTING
GROSS  RECEIPTS  FOR  A  TAXPAYER  THAT  IS  A  PARTNER  IN PARTNERSHIP,
INTER-ENTITY RECEIPTS BETWEEN THE TAXPAYER AND SUCH PARTNERSHIP SHALL BE
ELIMINATED.
  (D) [Air pollution control facilities shall mean property constituting
facilities which remove, reduce, or render less noxious air contaminants
emitted from an air contamination source (as the terms "air contaminant"
and "air contamination source" are defined in  section  19-0107  of  the
environmental  conservation  law) from a point immediately preceding the
point of such removal, reduction or rendering to the point of  discharge
of  air,  meeting emission standards as established by the department of
environmental conservation, but excluding such facilities installed  for
the primary purpose of salvaging materials which are usable in the manu-
facturing process or are marketable and excluding those facilities which
rely  for  their efficacy on dilution, dispersion or assimilation of air
contaminants in the ambient air after emission. Such term shall  further
include flue gas desulfurization equipment and attendant sludge disposal
facilities,  fluidized  bed boilers, precombustion coal cleaning facili-
ties or other facilities that conform with this  subdivision  and  which
comply  with the provisions of the state acid deposition control act set
forth in title nine of article nineteen of the  environmental  conserva-
tion  law]  A  QUALIFIED  NEW YORK MINING BUSINESS SHALL MEAN A TAXPAYER
PRINCIPALLY ENGAGED IN MINING IN THE STATE. A  TAXPAYER  IS  PRINCIPALLY
ENGAGED  IN  MINING IN THE STATE IF MORE THAN FIFTY PERCENT OF THE GROSS
RECEIPTS OF THE TAXPAYER OR, IN THE  CASE  OF  A  COMBINED  REPORT,  THE
COMBINED  GROUP,  RESPECTIVELY, DURING THE TAXABLE YEAR ARE DERIVED FROM
THE SALE OF GOODS PRODUCED BY THE TAXPAYER BY MINING ACTIVITIES THAT ARE
CONDUCTED IN THE STATE. IN COMPUTING A COMBINED GROUP'S GROSS  RECEIPTS,
INTERCORPORATE RECEIPTS SHALL BE ELIMINATED. IN COMPUTING GROSS RECEIPTS
FOR  A  TAXPAYER THAT IS A PARTNER IN PARTNERSHIP, INTER-ENTITY RECEIPTS
BETWEEN THE TAXPAYER AND SUCH PARTNERSHIP SHALL BE ELIMINATED.
  [(E) The terms "qualified film  production  facility"  and  "qualified
film production company" shall have the same meaning as in section twen-
ty-four of this chapter.]

S. 6359                            217                           A. 8559

  (iii)  [However,  such  credit shall be allowed with respect to indus-
trial waste treatment facilities and air  pollution  control  facilities
only  on condition that such facilities have been certified by the state
commissioner of environmental conservation or his  designated  represen-
tative,  pursuant  to  subdivision one of section 17-0707 or subdivision
one of section 19-0309 of the environmental conservation law, as comply-
ing with applicable provisions of the  environmental  conservation  law,
the  public  health law, the state sanitary code and codes, rules, regu-
lations, permits or orders issued pursuant thereto.] IN ORDER TO PROPER-
LY ADMINISTER THE CREDIT AUTHORIZED BY THIS SUBDIVISION, THE  DEPARTMENT
MAY  DISCLOSE  INFORMATION ABOUT THE ALLOWANCE TO ANOTHER TAXPAYER OF AN
INVESTMENT TAX CREDIT OR AN EMPIRE ZONE INVESTMENT TAX CREDIT UNDER THIS
CHAPTER WITH RESPECT TO THE SAME PROPERTY.
  S 6. Paragraph (d) 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:
  (d)  A  taxpayer  shall not be allowed a credit under this subdivision
with respect to tangible personal property and other tangible  property,
including  buildings  and  structural  components of buildings, which it
leases to any other person or corporation [except where a taxpayer leas-
es property  to  an  affiliated  regulated  broker,  dealer,  registered
investment  adviser,  national securities exchange or board of trade (or
other entity described in clause (F) of subparagraph  (i)  of  paragraph
(b)  of  this  subdivision)  that  uses such property in accordance with
clause (D), (E) or (F) of subparagraph (i)  of  paragraph  (b)  of  this
subdivision].  For  purposes  of the preceding sentence, any contract or
agreement to lease or rent or for a license to use such  property  shall
be  considered  a  lease.  Provided,  however,  in determining whether a
taxpayer shall be allowed a credit under this subdivision  with  respect
to such property, any election made with respect to such property pursu-
ant  to  the  provisions of paragraph eight of subsection (f) of section
one hundred sixty-eight of the internal revenue code, as such  paragraph
was  in effect for agreements entered into prior to January first, nine-
teen hundred eighty-four, shall be disregarded. [For  purposes  of  this
paragraph,  the  use of a qualified film production facility by a quali-
fied film production company shall not be considered  a  lease  of  such
facility to such company.]
  S  7. Subparagraph 6 of paragraph (g) of subdivision 12 of section 210
of the tax law is REPEALED.
  S 8. Paragraphs (f), (k), (l) and (m) of subdivision 12 of section 210
of the tax law are REPEALED.
  S 9. Paragraph 2 of subsection (a) of section 606 of the tax  law,  as
amended  by chapter 817 of the laws of 1987, subparagraph (A) as amended
by chapter 637 of the laws of 2008 and clause (v) of subparagraph (B) as
added by chapter 393 of the laws of 2005, is amended to read as follows:
  (2)(A) A credit shall be allowed under this subsection TO A  QUALIFIED
NEW  YORK  MANUFACTURER, A QUALIFIED NEW YORK AGRICULTURAL BUSINESS OR A
QUALIFIED NEW YORK MINING BUSINESS with  respect  to  tangible  personal
property and other tangible property, including buildings and structural
components  of  buildings,  which  (I)  are[:]  depreciable  pursuant to
section one hundred sixty-seven of the internal revenue code, (II)  have
a  useful  life of four years or more, (III) are acquired by purchase as
defined in section one hundred seventy-nine (d) of the internal  revenue
code,  (IV)  HAVE  NOT  BEEN PREVIOUSLY THE SUBJECT OF AN INVESTMENT TAX
CREDIT OR AN EMPIRE ZONE INVESTMENT TAX CREDIT ALLOWED UNDER THIS  CHAP-
TER  TO  ANOTHER  TAXPAYER, (V) have a situs in this state, and (VI) are

S. 6359                            218                           A. 8559

[(i)] principally used by the taxpayer in the production  of  goods  [by
manufacturing,  processing,  assembling,  refining,  mining, extracting,
farming, agriculture, horticulture, floriculture, viticulture or commer-
cial   fishing,  (ii)  industrial  waste  treatment  facilities  or  air
pollution control facilities, used in the taxpayer's trade or  business,
(iii)]  FOR SALE OR ARE research and development property[, (iv) princi-
pally 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 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 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, 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 qual-
ified  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. For purposes of clauses (iv) and (v) of this subparagraph,
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  regulated  broker,
dealer   or  registered  investment  adviser  in  accordance  with  this
subsection. For purposes of determining if the property  is  principally
used  in  qualifying uses, the uses by the taxpayer described in clauses
(iv) and (v) of this subparagraph may be aggregated.  In  addition,  the
uses by the taxpayer, its affiliated regulated broker, dealer and regis-
tered  investment  adviser  under either or both of those clauses may be
aggregated. Provided, however, a taxpayer shall not be allowed the cred-
it provided by clauses (iv) and (v)  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 aver-
age 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

S. 6359                            219                           A. 8559

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
registered investment adviser using the property. For purposes  of  this
subsection, the term "goods" shall not include electricity].
  (B)  For  purposes  of this paragraph, the following definitions shall
apply:
  (i) (I) Manufacturing shall mean the process of working raw  materials
into  wares  suitable  for use or which gives new shapes, new quality or
new combinations to matter which already has gone through  some  artifi-
cial  process by the use of machinery, tools, appliances and other simi-
lar equipment. Property used in the production of goods FOR  SALE  shall
include machinery, equipment or other tangible property which is princi-
pally  used  in  the repair and service of other machinery, equipment or
other tangible property used principally in the production of goods  and
shall include all facilities used in the production operation, including
storage  of  material  to be used in production and of the products that
are produced.
  (II) NOTWITHSTANDING THE DEFINITION OF MANUFACTURING IN  ITEM  (I)  OF
THIS  CLAUSE:  THE  GENERATION  AND  DISTRIBUTION  OF  ELECTRICITY,  THE
EXTRACTION AND DISTRIBUTION OF NATURAL GAS, AND THE PRODUCTION OF  STEAM
ASSOCIATED  WITH THE GENERATION OF ELECTRICITY DOES NOT CONSTITUTE MANU-
FACTURING. THE CREATION, PRODUCTION OR REPRODUCTION  OF  A  FILM,  TELE-
VISION  SHOW OR COMMERCIAL DOES NOT CONSTITUTE MANUFACTURING. THE BLEND-
ING OF TWO OR MORE FUELS DOES NOT  CONSTITUTE  MANUFACTURING.  THE  MASS
PRODUCTION  OF  FOOD  PRODUCTS FOR COMMERCIAL WHOLESALE DISTRIBUTION AND
SALE CONSTITUTES MANUFACTURING.
  (ii) Research and development property shall mean  property  which  is
used  for  purposes  of  research and development in the experimental or
laboratory sense. Such purposes shall not be deemed to include the ordi-
nary testing or inspection of materials or products for quality control,
efficiency surveys, management studies, consumer  surveys,  advertising,
promotions, or research in connection with literary, historical or simi-
lar projects.
  (iii)  [Industrial  waste  treatment  facilities  shall  mean property
constituting facilities for the treatment, neutralization or  stabiliza-
tion  of  industrial  waste  and  other wastes (as the terms "industrial
waste" and "other wastes" are defined in section 17-0105 of the environ-
mental conservation law) from a point immediately preceding the point of
such  treatment,  neutralization  or  stabilization  to  the  point   of
disposal,  including  the necessary pumping and transmitting facilities,
but excluding such facilities  installed  for  the  primary  purpose  of
salvaging materials which are usable in the manufacturing process or are
marketable.]  "MANUFACTURER" SHALL MEAN A TAXPAYER THAT DURING THE TAXA-
BLE YEAR IS PRINCIPALLY ENGAGED IN MANUFACTURING. A TAXPAYER IS  PRINCI-
PALLY  ENGAGED  IN MANUFACTURING IF MORE THAN FIFTY PERCENT OF THE GROSS

S. 6359                            220                           A. 8559

RECEIPTS OF THE TAXPAYER DURING THE TAXABLE YEAR ARE  DERIVED  FROM  THE
SALE OF GOODS PRODUCED BY MANUFACTURING. IN COMPUTING GROSS RECEIPTS FOR
A  TAXPAYER  THAT  IS  A  PARTNER  IN PARTNERSHIP, INTER-ENTITY RECEIPTS
BETWEEN THE TAXPAYER AND SUCH PARTNERSHIP SHALL BE ELIMINATED.
  (iv)  [Air pollution control facilities shall mean property constitut-
ing facilities which remove, reduce, or render less noxious air  contam-
inants  emitted  from  an  air  contamination  source (as the terms "air
contaminant" and "air  contamination  source"  are  defined  in  section
19-0107  of the environmental conservation law) from a point immediately
preceding the point of such removal, reduction or rendering to the point
of discharge of air, meeting emission standards as  established  by  the
department  of environmental conservation, but excluding such facilities
installed for the primary  purpose  of  salvaging  materials  which  are
usable  in  the  manufacturing  process  or are marketable and excluding
those facilities which rely for their efficacy on  dilution,  dispersion
or  assimilation  of air contaminants in the ambient air after emission.
Such term shall further include flue gas desulfurization  equipment  and
attendant  sludge  disposal  facilities,  fluidized bed boilers, precom-
bustion coal cleaning facilities or other facilities that  conform  with
this  subsection  and which comply with the provisions of the State Acid
Deposition Control Act set forth in title nine of  article  nineteen  of
the  environmental  conservation law.] "QUALIFIED NEW YORK MANUFACTURER"
SHALL MEAN A MANUFACTURER THAT HAS PROPERTY IN THE STATE THAT IS USED IN
MANUFACTURING AND EITHER THE FAIR MARKET VALUE OF THAT PROPERTY  AT  THE
CLOSE  OF THE TAXABLE YEAR IS AT LEAST TEN MILLION DOLLARS OR ALL OF ITS
REAL AND PERSONAL PROPERTY IS LOCATED IN NEW YORK.
  (v) [For  purposes  of  this  paragraph,  the  terms  "qualified  film
production  facility" and "qualified film production company" shall have
the same meaning as in section twenty-four of this chapter.] A QUALIFIED
NEW YORK AGRICULTURAL BUSINESS SHALL MEAN A TAXPAYER PRINCIPALLY ENGAGED
IN FARMING,  AGRICULTURE,  HORTICULTURE,  FLORICULTURE,  VITICULTURE  OR
COMMERCIAL  FISHING  IN  THE STATE. A TAXPAYER IS PRINCIPALLY ENGAGED IN
FARMING, AGRICULTURE, HORTICULTURE, FLORICULTURE, VITICULTURE OR COMMER-
CIAL FISHING IN THE STATE IF  MORE  THAN  FIFTY  PERCENT  OF  THE  GROSS
RECEIPTS  OF  THE  TAXPAYER DURING THE TAXABLE YEAR ARE DERIVED FROM THE
SALE OF GOODS PRODUCED BY THE TAXPAYER BY ANY OF THE  ACTIVITIES  SPECI-
FIED  IN  THIS  SENTENCE  THAT ARE CONDUCTED IN THE STATE.  IN COMPUTING
GROSS RECEIPTS  FOR  A  TAXPAYER  THAT  IS  A  PARTNER  IN  PARTNERSHIP,
INTER-ENTITY RECEIPTS BETWEEN THE TAXPAYER AND SUCH PARTNERSHIP SHALL BE
ELIMINATED.
  (VI)  A QUALIFIED NEW YORK MINING BUSINESS SHALL MEAN A TAXPAYER PRIN-
CIPALLY ENGAGED IN MINING  IN  THE  STATE.  A  TAXPAYER  IS  PRINCIPALLY
ENGAGED  IN  MINING IN THE STATE IF MORE THAN FIFTY PERCENT OF THE GROSS
RECEIPTS OF THE TAXPAYER DURING THE TAXABLE YEAR ARE  DERIVED  FROM  THE
SALE  OF  GOODS  PRODUCED  BY THE TAXPAYER BY MINING ACTIVITIES THAT ARE
CONDUCTED IN THE STATE. IN COMPUTING GROSS RECEIPTS FOR A TAXPAYER  THAT
IS  A PARTNER IN PARTNERSHIP, INTER-ENTITY RECEIPTS BETWEEN THE TAXPAYER
AND SUCH PARTNERSHIP SHALL BE ELIMINATED.
  (C) [However, such credit shall be allowed with respect to  industrial
waste  treatment facilities and air pollution control facilities only on
condition that such facilities have been certified by the state  commis-
sioner  of  environmental conservation or his designated representative,
pursuant to subdivision one of section 17-0707  or  subdivision  one  of
section 19-0309 of the environmental conservation law, as complying with
applicable  provisions of the environmental conservation law, the public
health law, the state  sanitary  code  and  codes,  rules,  regulations,

S. 6359                            221                           A. 8559

permits  or orders issued pursuant thereto.] IN ORDER TO PROPERLY ADMIN-
ISTER THE CREDIT AUTHORIZED BY  THIS  SUBDIVISION,  THE  DEPARTMENT  MAY
DISCLOSE  INFORMATION  ABOUT  THE  ALLOWANCE  TO  ANOTHER TAXPAYER OF AN
INVESTMENT TAX CREDIT OR AN EMPIRE ZONE INVESTMENT TAX CREDIT UNDER THIS
CHAPTER WITH RESPECT TO THE SAME PROPERTY.
  S  10. Paragraph 4 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:
  (4)  A  taxpayer  shall  not be allowed a credit under this subsection
with respect to tangible personal property and other tangible  property,
including  buildings  and  structural  components of buildings, which it
leases to any other person or corporation [except where a taxpayer leas-
es property to an affiliated regulated  broker,  dealer,  or  registered
investment  adviser  that  uses  such property in accordance with clause
(iv) or (v) of subparagraph (A) of paragraph two  of  this  subsection].
For  purposes  of  the  preceding sentence, any contract or agreement to
lease or rent or for a license to use such property shall be  considered
a  lease.  Provided, however, in determining whether a taxpayer shall be
allowed a credit under this subsection with respect  to  such  property,
any  election  made  with  respect  to  such  property  pursuant  to the
provisions of paragraph eight of subsection (f) of section  one  hundred
sixty-eight  of  the  internal  revenue  code,  as such paragraph was in
effect for agreements entered into  prior  to  January  first,  nineteen
hundred  eighty-four,  shall be disregarded. [For purposes of this para-
graph, the use of a qualified film production facility  by  a  qualified
film production company shall not be considered a lease of such facility
to such company.]
  S  11.  Paragraph 6 of subsection (a) of section 606 of the tax law is
REPEALED.
  S 12. Subparagraph (F) of paragraph 7 of subsection (a) of section 606
of the tax law is REPEALED.
  S 13. Paragraphs 11, 12 and 13 of subsection (a) of section 606 of the
tax law are REPEALED.
  S 14. Subsection (i) of section 1456 of the tax law is REPEALED.
  S 15. Subdivision (q) of section 1511 of the tax law is REPEALED.
  S 16. Subparagraphs (vi) and (vii) of paragraph (a) of  subdivision  1
of section 210 of the tax law, subparagraph (vi) as amended by section 1
of  part  C  of chapter 56 of the laws of 2011 and subparagraph (vii) as
added by section 1 of part Z of chapter 59 of  the  laws  of  2013,  are
amended to read as follows:
  (vi) EXCEPT AS OTHERWISE PROVIDED IN THIS SUBPARAGRAPH OR SUBPARAGRAPH
(VII) OF THIS PARAGRAPH, for taxable years beginning on or after January
thirty-first,  two  thousand  seven, the amount prescribed by this para-
graph for a taxpayer which is a  qualified  New  York  manufacturer,  AS
DEFINED  IN  SUBDIVISION  FIFTEEN  OF  SECTION TWO HUNDRED EIGHT OF THIS
ARTICLE, shall be computed at the rate of six and one-half (6.5) percent
of the taxpayer's entire net income base. For taxable years beginning on
or after January first, two thousand twelve and  before  January  first,
two  thousand  fifteen,  the  amount  prescribed by this paragraph for a
taxpayer which is an eligible qualified New York manufacturer  shall  be
computed  at  the  rate  of  three and one-quarter (3.25) percent of the
taxpayer's entire net income base.  [The term "manufacturer" shall  mean
a  taxpayer  which during the taxable year is principally engaged in the
production of goods by manufacturing, processing, assembling,  refining,
mining,  extracting,  farming,  agriculture, horticulture, floriculture,
viticulture or commercial fishing. However, the generation and  distrib-

S. 6359                            222                           A. 8559

ution   of  electricity,  the  distribution  of  natural  gas,  and  the
production of steam associated with the generation of electricity  shall
not be qualifying activities for a manufacturer under this subparagraph.
Moreover,  the  combined  group shall be considered a "manufacturer" for
purposes of this subparagraph only if  the  combined  group  during  the
taxable  year is principally engaged in the activities set forth in this
paragraph, or any combination thereof. A taxpayer or  a  combined  group
shall  be "principally engaged" in activities described above if, during
the taxable year, more than fifty percent of the gross receipts  of  the
taxpayer or combined group, respectively, are derived from receipts from
the  sale  of goods produced by such activities. In computing a combined
group's gross receipts, intercorporate receipts shall be  eliminated.  A
"qualified  New  York manufacturer" is a manufacturer which has property
in New York which is described in clause  (A)  of  subparagraph  (i)  of
paragraph  (b)  of subdivision twelve of this section and either (I) the
adjusted basis of such property for federal income tax purposes  at  the
close of the taxable year is at least one million dollars or (II) all of
its  real  and  personal property is located in New York. In addition, a
"qualified New York manufacturer" means a taxpayer which is defined as a
qualified emerging technology company under paragraph (c) of subdivision
one of section thirty-one hundred two-e of the  public  authorities  law
regardless  of  the  ten million dollar limitation expressed in subpara-
graph one of such  paragraph  (c).]  The  commissioner  shall  establish
guidelines and criteria that specify requirements by which a manufactur-
er  may  be  classified  as an eligible qualified New York manufacturer.
Criteria may include but not be limited  to  factors  such  as  regional
unemployment,   the  economic  impact  that  manufacturing  has  on  the
surrounding community, population decline within the region  and  median
income within the region in which the manufacturer is located. In estab-
lishing  these  guidelines and criteria, the commissioner shall endeavor
that the total annual cost of the lower rates shall not  exceed  twenty-
five million dollars.
  [(vii)] For a qualified New York manufacturer, as defined in [subpara-
graph (vi) of this paragraph] SUBDIVISION FIFTEEN OF SECTION TWO HUNDRED
EIGHT  OF  THIS ARTICLE, the rate at which the tax is computed in effect
for taxable years beginning on or  after  January  first,  two  thousand
thirteen  and  before January first, two thousand fourteen for qualified
New York manufacturers shall be reduced by nine and  two-tenths  percent
for  taxable  years  commencing  on or after January first, two thousand
fourteen and before January first,  two  thousand  fifteen,  twelve  and
three-tenths  percent  for  taxable years commencing on or after January
first, two thousand fifteen  and  before  January  first,  two  thousand
sixteen, fifteen and four-tenths percent for taxable years commencing on
or  after  January first, two thousand sixteen and before January first,
two thousand eighteen, and twenty-five percent for taxable years  begin-
ning on or after January first, two thousand eighteen.
  (VII)  FOR A QUALIFIED NEW YORK MANUFACTURER THAT HAS AN APPORTIONMENT
FACTOR FOR PURPOSES OF  THE  METROPOLITAN  TRANSPORTATION  BUSINESS  TAX
SURCHARGE  COMPUTED  PURSUANT  TO SUBDIVISION TWO OF SECTION TWO HUNDRED
NINE-B OF THIS ARTICLE EQUAL TO ZERO FOR THE TAXABLE  YEAR,  THE  AMOUNT
PRESCRIBED  BY  THIS  PARAGRAPH  FOR TAXABLE YEARS BEGINNING ON OR AFTER
JANUARY FIRST, TWO THOUSAND FOURTEEN SHALL BE COMPUTED AT  THE  RATE  OF
ZERO PERCENT OF THE TAXPAYER'S ENTIRE NET INCOME BASE.
  S  17.  Subparagraphs  2  and  3  of paragraph (b) of subdivision 1 of
section 210 of the tax law, subparagraph 2 as amended by  section  1  of
part  GG-1 of chapter 57 of the laws of 2008 and subparagraph 3 as added

S. 6359                            223                           A. 8559

by section 2 of part Z of chapter 59 of the laws of 2013, are amended to
read as follows:
  (2)  [For  purposes  of  subparagraph  one of this paragraph, the term
"manufacturer" shall mean a taxpayer which during the  taxable  year  is
principally  engaged  in the production of goods by manufacturing, proc-
essing, assembling, refining, mining, extracting, farming,  agriculture,
horticulture, floriculture, viticulture or commercial fishing. Moreover,
for  purposes  of  computing  the capital base in a combined report, the
combined group shall be considered a "manufacturer" for purposes of this
subparagraph only if the combined group during the taxable year is prin-
cipally engaged in the activities set forth in this subparagraph, or any
combination thereof. A taxpayer or a combined group shall be "principal-
ly engaged" in activities described above if, during the  taxable  year,
more  than  fifty  percent  of  the  gross  receipts  of the taxpayer or
combined group, respectively, are derived from receipts from the sale of
goods produced by such activities. In computing a combined group's gross
receipts, intercorporate receipts shall be eliminated. A "qualified  New
York  manufacturer" is a manufacturer that has property in New York that
is described in clause (A) of  subparagraph  (i)  of  paragraph  (b)  of
subdivision  twelve of this section and either (i) the adjusted basis of
that property for federal income tax purposes at the close of the  taxa-
ble  year  is  at  least one million dollars or (ii) all of its real and
personal property is located in New York. In addition, a "qualified  New
York  manufacturer"  means  a  taxpayer  that  is defined as a qualified
emerging technology company under paragraph (c) of  subdivision  one  of
section  thirty-one  hundred two-e of the public authorities law regard-
less of the ten million dollar limitation expressed in subparagraph  one
of such paragraph.
  (3)]  For  a  qualified New York manufacturer, as defined in [subpara-
graph two of this paragraph] SUBDIVISION FIFTEEN OF SECTION TWO  HUNDRED
EIGHT  OF  THIS ARTICLE, the rate at which the tax is computed in effect
for taxable years beginning on or  after  January  first,  two  thousand
thirteen  and  before  January  first,  two  thousand  fourteen shall be
reduced by nine and two-tenths percent for taxable years  commencing  on
or  after January first, two thousand fourteen and before January first,
two thousand fifteen, twelve and three-tenths percent for taxable  years
commencing  on  or  after January first, two thousand fifteen and before
January first, two thousand sixteen, fifteen and four-tenths percent for
taxable years commencing on or after January first, two thousand sixteen
and before January first, two thousand eighteen, and twenty-five percent
for taxable years beginning on or  after  January  first,  two  thousand
eighteen.
  S  18. Subparagraph (iii) of paragraph (c) of subdivision 1 of section
210 of the tax law, as added by section 3 of part Z of chapter 59 of the
laws of 2013, is amended to read as follows:
  (iii) For a qualified New York manufacturer, as defined  in  [subpara-
graph  (vi) of paragraph (a) of this] subdivision FIFTEEN OF SECTION TWO
HUNDRED EIGHT OF THIS ARTICLE, the rate at which the tax is computed  in
effect  for taxable years beginning on or after January first, two thou-
sand thirteen and before January first, two thousand fourteen for quali-
fied New York manufacturers shall be  reduced  by  nine  and  two-tenths
percent  for  taxable  years  commencing  on or after January first, two
thousand fourteen and before January first, two thousand fifteen, twelve
and three-tenths percent for taxable years commencing on or after  Janu-
ary  first,  two thousand fifteen and before January first, two thousand
sixteen, fifteen and four-tenths percent for taxable years commencing on

S. 6359                            224                           A. 8559

or after January first, two thousand sixteen and before  January  first,
two  thousand eighteen, and twenty-five percent for taxable years begin-
ning on or after January first, two thousand eighteen.
  S  19. Subparagraph 6 of paragraph (d) of subdivision 1 of section 210
of the tax law, as added by section 4 of part Z of  chapter  59  of  the
laws of 2013, is amended to read as follows:
  (6) For a qualified New York manufacturer, as defined in [subparagraph
(vi)  of  paragraph  (a)  of  this]  subdivision  FIFTEEN OF SECTION TWO
HUNDRED EIGHT OF THIS ARTICLE, the amounts prescribed  in  subparagraphs
one  and four of this paragraph in effect for taxable years beginning on
or after January first, two thousand thirteen and before January  first,
two  thousand  fourteen  for  qualified  New York manufacturers shall be
reduced by nine and two-tenths percent for taxable years  commencing  on
or  after January first, two thousand fourteen and before January first,
two thousand fifteen, twelve and three-tenths percent for taxable  years
commencing  on  or  after January first, two thousand fifteen and before
January first, two thousand sixteen, fifteen and four-tenths percent for
taxable years commencing on or after January first, two thousand sixteen
and before January first, two thousand eighteen, and twenty-five percent
for taxable years beginning on or  after  January  first,  two  thousand
eighteen.
  S 20. Subdivision 1 of section 210 of the tax law is amended by adding
a new paragraph (h) to read as follows:
  (H)  FOR  PURPOSES  OF  DETERMINING  WHETHER A TAXPAYER IS AN ELIGIBLE
QUALIFIED NEW  YORK  MANUFACTURER  FOR  PURPOSES  OF  THE  TAX  BENEFITS
PROVIDED  IN  SUBPARAGRAPH  (VI)  OF  PARAGRAPH (A) OF THIS SUBDIVISION,
SUBPARAGRAPH (II) OF PARAGRAPH (C) OF THIS SUBDIVISION, AND SUBPARAGRAPH
FIVE OF PARAGRAPH (D) OF THIS SUBDIVISION, A TAXPAYER SHALL UTILIZE  THE
LAW,  GUIDELINES  AND  CRITERIA  IN EFFECT ON DECEMBER THIRTY-FIRST, TWO
THOUSAND THIRTEEN.
  S 21. Subdivision 2 of section 355 of the economic development law, as
amended by section 4 of part G of chapter 61 of the  laws  of  2011,  is
amended to read as follows:
  2.  Excelsior  investment  tax  credit component. A participant in the
excelsior jobs program shall be eligible to claim a credit on  qualified
investments.  The  credit  shall  be equal to two percent of the cost or
other basis for federal income tax purposes of the qualified investment.
A participant may not claim both the  excelsior  investment  tax  credit
component  and the investment tax credit set forth in subdivision twelve
of section two hundred ten[,] OR subsection (a) of section  six  hundred
six[,  subsection (i) of section fourteen hundred fifty-six, or subdivi-
sion (q) of section fifteen hundred eleven] of the tax law for the  same
property  in  any taxable year, except that a participant may claim both
the excelsior investment tax credit component  and  the  investment  tax
credit  for  research  and development property. In addition, a taxpayer
who or which is qualified to claim the excelsior investment  tax  credit
component and is also qualified to claim the brownfield tangible proper-
ty  credit  component  under section twenty-one of the tax law may claim
either the excelsior investment tax credit component  or  such  tangible
property  credit  component,  but  not  both with regard to a particular
piece of property. A credit may not be claimed until a  business  enter-
prise  has received a certificate of tax credit, provided that qualified
investments made on or after the issuance of the certificate  of  eligi-
bility  but  before the issuance of the certificate of tax credit to the
business enterprise, may be claimed in the first taxable year for  which
the  business  enterprise  is  allowed  to  claim  the  credit. Expenses

S. 6359                            225                           A. 8559

incurred prior to the date the certificate of eligibility is issued  are
not eligible to be included in the calculation of the credit.
  S  22.  Severability.  The  legislature intends by this act to provide
needed tax relief to New York manufacturers.  However,  if  a  court  of
final,  competent  jurisdiction adjudges the tax rates imposed on quali-
fied New York manufacturers to be invalid, qualified New  York  manufac-
turers  shall  be  subject  to the same tax rates as all other taxpayers
subject to tax under article nine-A of the tax law. Provided further, if
a court of final, competent jurisdiction adjudges that the  tax  credits
provided  by this act to qualified New York manufacturers, qualified New
York agricultural businesses and qualified New York mining businesses to
be invalid, such credits shall be deemed repealed and  shall  be  of  no
force and effect as to any taxpayers.
  S  23. This act shall take effect immediately and shall apply to taxa-
ble years beginning on or after January 1, 2014.

                                 PART S

  Section 1. Sections 185, 187-j, 187-k, 187-l, 187-m, 187-q, 187-r  and
187-s of the tax law are REPEALED.
  S  2.  Paragraph  (c)  of subdivision 9 of section 400 of the economic
development law, as added by section 2 of part V of chapter  61  of  the
laws of 2011, is amended to read as follows:
  (c) the business entity must not be substantially similar in ownership
and  operation  to  another taxpayer taxable or previously taxable under
section one hundred eighty-three[,] OR one hundred eighty-four or FORMER
SECTION one hundred eighty-five of  article  nine,  former  section  one
hundred  eighty-six or article nine-A, twenty-two, thirty-two or thirty-
three of the tax law or the income or losses of which is or was includa-
ble under article twenty-two of the tax law;
  S 3. Paragraph (c) of subdivision 6 of section  431  of  the  economic
development  law,  as  added by section 1 of part A of chapter 68 of the
laws of 2013, is amended to read as follows:
  (c) the business is not substantially  similar  in  operation  and  in
ownership  to  a  business  entity  (or entities) taxable, or previously
taxable within the last five taxable years, under  section  one  hundred
eighty-three[,]  OR  one hundred eighty-four, FORMER SECTION one hundred
eighty-five or FORMER SECTION one hundred eighty-six  of  the  tax  law,
article nine-A, thirty-two or thirty-three of the tax law, article twen-
ty-three  of  the  tax law or which would have been subject to tax under
such article twenty-three (as such article  was  in  effect  on  January
first,  nineteen  hundred eighty), or the income (or losses) of which is
(or was) includable under article twenty-two of the tax law; and
  S 4. Paragraph 1 of subdivision (a), subdivision (f), paragraph  1  of
subdivision  (i)  and  subdivisions (j) and (k) of section 14 of the tax
law, paragraph 1 of subdivision (a) as amended by section 3 of  part  V1
of  chapter 109 of the laws of 2006, subdivisions (f) and (j) as amended
by section 10 of part CC of chapter 85 of the laws of 2002, paragraph  1
of  subdivision  (i)  and  subdivision (k) as amended and paragraph 4 of
subdivision (j) as added by section 5 of part A of  chapter  63  of  the
laws  of  2005,  subparagraph  (B)  of paragraph 4 of subdivision (j) as
amended by chapter 161 of the laws of 2005 and paragraph 5  of  subdivi-
sion  (j)  as amended by section 4 of part V1 of chapter 109 of the laws
of 2006, are amended to read as follows:
  (1) except as provided in paragraphs one-a and one-b of this  subdivi-
sion,  for purposes of [section one hundred eighty-seven-j and] articles

S. 6359                            226                           A. 8559

nine-A, twenty-two, thirty-two and thirty-three  of  this  chapter,  for
each  of  the  taxable  years  within the "business tax benefit period,"
which period shall consist of (A) in the case of a  business  enterprise
with a test date occurring on or before December thirty-first, two thou-
sand  one, the first fifteen taxable years beginning on or after January
first, two thousand one, (B) in the case of a business enterprise with a
test date occurring on or after January first,  two  thousand  two,  but
prior  to April first, two thousand five, the fifteen taxable years next
following the business enterprise's test year, and (C) in the case of  a
business enterprise which is first certified under article eighteen-B of
the  general  municipal  law on or after April first, two thousand five,
the ten taxable years starting with the taxable year in which the  busi-
ness  enterprise's  first date of certification under article eighteen-B
of the general municipal law occurs, but only with respect  to  each  of
such  business tax benefit period years for which the employment test is
met,
  (f) Taxable year. The term "taxable year" means the  taxable  year  of
the business enterprise under section one hundred eighty-three[,] OR one
hundred  eighty-four[,  one  hundred  eighty-five] or former section one
hundred eighty-six of article nine, or under article nine-A, twenty-two,
thirty-two or thirty-three of this chapter.  If  a  business  enterprise
does  not  have  a  taxable  year  because it is exempt from taxation or
otherwise not required to file a return under any of  such  sections  of
article  nine or under article nine-A, twenty-two, thirty-two or thirty-
three, then the term "taxable year" means (i) the business  enterprise's
federal taxable year, or, (ii) if the enterprise does not have a federal
taxable year, the calendar year.
  (1)  for  purposes  of  [section one hundred eighty-seven-j of article
nine, and] articles nine-A, twenty-two, thirty-two and  thirty-three  of
this  chapter, on the first day of the taxable year during which revoca-
tion of its certification under article eighteen-B of the general munic-
ipal law occurs, and
  (j) New business. (1) A new business shall  include  any  corporation,
except  a corporation which is substantially similar in operation and in
ownership to a business entity  (or  entities)  taxable,  or  previously
taxable,  under  section  one  hundred eighty-three, one hundred eighty-
four, FORMER SECTION one  hundred  eighty-five  or  FORMER  SECTION  one
hundred  eighty-six  of article nine; article nine-A, article thirty-two
or thirty-three of this chapter; article twenty-three of this chapter or
which would have been subject to tax under such article twenty-three (as
such article was in effect on January first, nineteen hundred eighty) or
the income (or losses) of which is (or  was)  includable  under  article
twenty-two of this chapter.
  (2)  For purposes of article twenty-two of this chapter, an individual
who is either a sole proprietor or a member of a partnership shall qual-
ify as an owner of a new business unless the business of which the indi-
vidual is an owner is substantially similar in operation and  in  owner-
ship  to a business entity taxable, or previously taxable, under section
one hundred eighty-three, one hundred eighty-four,  FORMER  SECTION  one
hundred  eighty-five or FORMER SECTION one hundred eighty-six of article
nine; article nine-A, thirty-two or thirty-three of this chapter;  arti-
cle twenty-three of this chapter or which would have been subject to tax
under  such article twenty-three (as such article was in effect on Janu-
ary first, nineteen hundred eighty) or the income (or losses)  of  which
is (or was) includable under article twenty-two.

S. 6359                            227                           A. 8559

  (3)  For purposes of article twenty-two of this chapter, a shareholder
of a New York S corporation shall be treated as the owner of a new busi-
ness with respect to such share if the corporation qualifies  as  a  new
business pursuant to paragraph one of this subdivision.
  (4) (A)(i) Notwithstanding paragraphs one and two of this subdivision,
a new business shall include any corporation which is identical in oper-
ation  and  ownership  to  a business entity (or entities) taxable under
section one hundred eighty-three[,] OR one hundred eighty-four or FORMER
SECTION one hundred eighty-five of article nine; article nine-A, article
thirty-two or thirty-three of this chapter or the income (or losses)  of
which  is  includable under article twenty-two of this chapter, provided
such corporation and such business entity or entities are  operating  in
different counties in the state.
  (ii)  Notwithstanding  paragraphs  one and two of this subdivision, an
individual who is either a sole proprietor or a member of a  partnership
shall qualify as an owner of a new business if the business of which the
individual  is  an owner is identical in operation and in ownership to a
business entity (or entities) taxable under section one hundred  eighty-
three[,] OR one hundred eighty-four or FORMER SECTION one hundred eight-
y-five  of  article  nine; article nine-A, article thirty-two or thirty-
three of this chapter or the income (or losses) of which  is  includable
under  article  twenty-two  of  this chapter, provided such business and
such business entity or entities are operating in different counties  in
the state.
  (iii)  Any  corporation qualifying as a new business or any individual
qualifying as an owner of a new business as a result of  the  provisions
of this subparagraph shall have the same business tax benefit period and
sales  and  use tax benefit period as the business entity to which it is
identical in operation and in ownership.
  (B) Notwithstanding any provisions of this subdivision to the contrary
and notwithstanding subdivision c of section  eighteen  of  part  CC  of
chapter  eighty-five  of  the laws of two thousand two, a corporation or
partnership, which was first certified under article eighteen-B  of  the
general  municipal law before August first, two thousand two, has a base
period of zero years or zero employment for  its  base  period,  and  is
similar  in  operation and in ownership to a business entity or entities
taxable, or previously taxable, under sections  specified  in  paragraph
one  or  two of this subdivision or which would have been subject to tax
under article twenty-three of this  chapter  (as  such  article  was  in
effect on January first, nineteen hundred eighty) or the income or loss-
es  of which is or was includable under article twenty-two of this chap-
ter shall not be deemed a new business if it was not formed for a  valid
business  purpose, as such term is defined in clause (D) of subparagraph
one of paragraph (o) of subdivision nine of section two hundred eight of
this chapter and was formed solely to gain empire zone benefits.
  (5) Notwithstanding any other provision of this  section,  a  business
enterprise which is approved by the commissioner of economic development
as  the owner of a qualified investment project or a significant capital
investment project pursuant to subdivision (w) of section  nine  hundred
fifty-nine of the general municipal law, has a base period of zero years
and  places in service property (or a project that includes such proper-
ty) which comprises such qualified investment project  or  such  signif-
icant  capital  investment project[,], shall be deemed to be a new busi-
ness under this section. Provided, however, to be deemed a new  business
under  this  paragraph,  such  business  enterprise  shall have received

S. 6359                            228                           A. 8559

certification under article eighteen-B of the general  business  law  by
December thirty-first, two thousand seven.
  (k)  If  the  designation of an area as an empire zone is no longer in
effect because section nine hundred sixty-nine of the general  municipal
law  was not amended to extend the effective date of such designation so
that the designations of all empire zones pursuant to article eighteen-B
of the general municipal law have expired, a  business  enterprise  that
was  certified  pursuant  to article eighteen-B of the general municipal
law on the day immediately preceding the day on which  such  designation
expired  shall  be deemed to continue to be certified under such article
eighteen-B for purposes of this section, and sections fifteen,  sixteen,
[section  one  hundred  eighty-seven-j,]  subdivisions  twenty-seven and
twenty-eight of section two hundred ten, subsections (bb)  and  (cc)  of
section six hundred six, subdivision [(z)] (D) of section eleven hundred
[fifteen]  NINETEEN, subsections (o) and (p) of section fourteen hundred
fifty-six, and subdivisions (r) and (s) of section fifteen hundred elev-
en of this chapter. In addition, if the designation of  an  area  as  an
empire  zone  is no longer in effect because section nine hundred sixty-
nine of the general municipal law was not amended to extend  the  effec-
tive  date  of  such  designation so that the designations of all empire
zones pursuant to article eighteen-B of the general municipal  law  have
expired,  all references to empire zones in the provisions of this chap-
ter listed in the previous sentence  shall  be  read  as  meaning  areas
designated  as  empire zones on the day immediately preceding the day on
which such designation expired.
  S 5. Paragraph 1 of subdivision (h) of section 15 of the  tax  law  is
REPEALED.
  S 6. The closing paragraph of subdivision (a) of section 28 of the tax
law,  as added by section 2 of part V of chapter 62 of the laws of 2006,
is amended to read as follows:
  (4) Notwithstanding any provisions of this section to the contrary,  a
corporation  or  partnership,  which  otherwise qualifies as a qualified
commercial production company, and is similar in operation and in owner-
ship to a business entity or entities taxable,  or  previously  taxable,
under  section one hundred eighty-three[,] OR one hundred eighty-four or
FORMER SECTION one hundred eighty-five of article nine; article  nine-A,
article  thirty-two  or thirty-three of this chapter or which would have
been subject to tax under article twenty-three of this chapter (as  such
article  was in effect on January first, nineteen hundred eighty) or the
income or losses of which is or was includable under article  twenty-two
of  this  chapter  shall  not  be deemed a new or separate business, and
therefore shall not be eligible for empire state  commercial  production
benefits,  if  it  was  not formed for a valid business purpose, as such
term is defined in clause (D) of subparagraph one of  paragraph  (o)  of
subdivision  nine  of  section two hundred eight of this chapter and was
formed solely to gain empire state commercial  production  credit  bene-
fits.
  S  7.  Subdivision  (a)  of  section  31 of the tax law, as amended by
section 7 of part G of chapter 61 of the laws of  2011,  is  amended  to
read as follows:
  (a)  General.  A  taxpayer  subject  to tax under [section one hundred
eighty-five,] article nine-A, twenty-two, thirty-two or thirty-three  of
this chapter shall be allowed a credit against such tax, pursuant to the
provisions  referenced in subdivision (g) of this section. The amount of
the credit, allowable for up to ten consecutive taxable  years,  is  the
sum of the following four credit components:

S. 6359                            229                           A. 8559

  (1) the excelsior jobs tax credit component;
  (2) the excelsior investment tax credit component;
  (3) the excelsior research and development tax credit component; and
  (4) the excelsior real property tax credit component.
  S  8.  Paragraph  1 of subdivision (g) of section 31 of the tax law is
REPEALED.
  S 9. The opening paragraph of  paragraph  1  of  subdivision  (a)  and
subparagraph  (C) of paragraph 2 of subdivision (e) of section 35 of the
tax law, as added by section 3 of part V of chapter 61 of  the  laws  of
2011, are amended to read as follows:
  A taxpayer which is a participant or the owner of a participant in the
economic transformation and facility redevelopment program under article
eighteen  of  the  economic development law that is subject to tax under
[section one hundred eighty-five of article nine,  or]  article  nine-A,
twenty-two,  thirty-two or thirty-three of this chapter shall be allowed
the sum of following  components  against  such  tax,  pursuant  to  the
provisions referenced in subdivision (f) of this section.
  (C) the business entity must not be substantially similar in ownership
and  operation  to  another taxpayer taxable or previously taxable under
section one hundred eighty-three[,] OR one hundred eighty-four or FORMER
SECTION one hundred eighty-five of  article  nine,  former  section  one
hundred  eighty-six of this chapter or article nine-A, twenty-two, thir-
ty-two or thirty-three of this chapter or the income or losses of  which
is or was includable under article twenty-two of this chapter;
  S  10. Paragraph 1 of subdivision (f) of section 35 of the tax law, as
added by section 3 of part V of chapter 61  of  the  laws  of  2011,  is
REPEALED.
  S  11. Paragraph 1 of subdivision (e) of section 38 of the tax law, as
added by section 1 of part EE of chapter 59 of  the  laws  of  2013,  is
REPEALED.
  S 12. Subdivision 2 of section 187 of the tax law, as added by chapter
788 of the laws of 1978, is amended to read as follows:
  2.  In  no event shall the credit herein provided for be allowed in an
amount which will reduce the tax payable to  less  than  the  applicable
minimum  tax  fixed  by  section  one hundred eighty-three[, one hundred
eighty-five] or FORMER SECTION one hundred eighty-six. If, however,  the
amount  of  credit  allowable  under  this  section for any taxable year
reduces the tax to such amount, any amount of credit not  deductible  in
such taxable year may be carried over to the following year or years and
may be deducted from the taxpayer's tax for such year or years.
  S 13. Subdivision 5 of section 187-a of the tax law, as added by chap-
ter 142 of the laws of 1997, is amended to read as follows:
  5.  Carryover.  In  no  event  shall  the credit under this section be
allowed in an amount which will reduce the tax payable to less than  the
applicable  minimum  tax fixed by section one hundred eighty-three[, one
hundred eighty-five] or FORMER SECTION one hundred  eighty-six  of  this
article.  If, however, the amount of credit allowable under this section
for any taxable year reduces the tax to such amount, any amount of cred-
it  not  deductible  in  such  taxable  year  may be carried over to the
following year or years and may be deducted from the taxpayer's tax  for
such year or years.
  S 14. Subdivisions 1 and 4 of section 187-b of the tax law, as amended
by section 1 of part G of chapter 59 of the laws of 2013, are amended to
read as follows:
  1.  General.  A  taxpayer  shall  be  allowed a credit, to be credited
against the taxes imposed under sections one hundred eighty-three[,] AND

S. 6359                            230                           A. 8559

one hundred eighty-four[, and one hundred eighty-five] of this  article.
Such  credit,  to  be computed as hereinafter provided, shall be allowed
for alternative fuel vehicle refueling and electric  vehicle  recharging
property  placed  in service during the taxable year. Provided, however,
that the amount of such credit allowable  against  the  tax  imposed  by
section  one  hundred eighty-four of this article shall be the excess of
the credit allowed by this section over the amount of such credit allow-
able against the tax imposed by section one hundred eighty-three of this
article.
  4. Carryovers. In no event shall the  credit  under  this  section  be
allowed  in an amount which will reduce the tax payable to less than the
applicable minimum tax fixed by section one hundred eighty-three [or one
hundred eighty-five] of this article. If, however, the amount of  credit
allowable  under  this  section  for any taxable year reduces the tax to
such amount, any amount of credit not deductible in  such  taxable  year
may  be  carried over to the following year or years and may be deducted
from the taxpayer's tax for such year or years.
  S 15. Section 187-c of the tax law, as amended by section 2 of part  K
of chapter 59 of the laws of 2012, is amended to read as follows:
  S  187-c.  Biofuel  production  credit.  A taxpayer shall be allowed a
credit to be computed as provided in section twenty-eight of this  chap-
ter, as added by part X of chapter sixty-two of the laws of two thousand
six,  against  the  tax imposed by this article. Provided, however, that
the amount of such credit allowed against the tax imposed by section one
hundred eighty-four of this article shall be the excess of the amount of
such credit over the amount  of  any  credit  allowed  by  this  section
against  the  tax  imposed  by  section one hundred eighty-three of this
article. In no event shall the credit under this section be  allowed  in
an  amount which will reduce the tax payable to less than the applicable
minimum tax fixed by section one hundred eighty-three  [or  one  hundred
eighty-five]  of  this  article.  If,  however, the amount of the credit
allowed under this section for any taxable year reduces the tax to  such
amount, the excess shall be treated as an overpayment of tax to be cred-
ited  or  refunded  in  accordance  with  the  provisions of section six
hundred 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. The tax credit
allowed pursuant to this section shall apply to taxable years  beginning
before January first, two thousand twenty.
  S  16.  Section 187-d of the tax law, as added by section 3 of part II
of chapter 63 of the laws of 2000, is amended to read as follows:
  S 187-d. Green building credit. 1. Allowance  of  credit.  A  taxpayer
shall  be  allowed a credit, to be computed as provided in section nine-
teen of this chapter, against the taxes imposed by sections one  hundred
eighty-three,  one  hundred  eighty-four[,  one hundred eighty-five] and
FORMER SECTION one hundred eighty-six of this article. Provided,  howev-
er,  that the amount of such credit allowable against the tax imposed by
section one hundred eighty-four of this article shall be the  excess  of
the  amount of such credit over the amount of any credit allowed by this
section against the tax imposed by section one hundred  eighty-three  of
this article.
  2.  Carryovers.  In  no  event  shall the credit under this section be
allowed in an amount which will reduce the tax payable to less than  the
applicable  minimum  tax fixed by section one hundred eighty-three[, one
hundred eighty-five] or FORMER SECTION one hundred  eighty-six  of  this
article.  If, however, the amount of credit allowable under this section

S. 6359                            231                           A. 8559

for any taxable year reduces the tax to such amount, any amount of cred-
it not deductible in such taxable  year  may  be  carried  over  to  the
following  year or years and may be deducted from the taxpayer's tax for
such year or years.
  S  17.  Subdivisions 1 and 2 of section 187-e of the tax law, as added
by section 2 of part I of chapter 63 of the laws of 2000, are amended to
read as follows:
  1. Allowance of credit. A taxpayer shall be allowed a  credit,  to  be
computed  as  provided  in  section  twenty of this chapter, against the
taxes imposed by sections one hundred eighty-three, one hundred  eighty-
four[,  one  hundred eighty-five] and FORMER SECTION one hundred eighty-
six of this article. Provided, however, that the amount of  such  credit
allowable  against the tax imposed by section one hundred eighty-four of
this article shall be the excess of the amount of such credit  over  the
amount  of any credit allowed by this section against the tax imposed by
section one hundred eighty-three of this article.
  2. Application of credit. In no event  shall  the  credit  under  this
section  be  allowed  in  an amount which will reduce the tax payable to
less than the applicable minimum tax fixed by section one hundred eight-
y-three[, one hundred eighty-five] or FORMER SECTION one hundred  eight-
y-six of this article. If, however, the amount of credit allowable under
this  section  for  any taxable year reduces the tax to such amount, any
amount of credit not thus deductible  in  such  taxable  year  shall  be
treated  as  an overpayment of tax to be credited or refunded in accord-
ance with the provisions of section ten hundred eighty-six of this chap-
ter. Provided, however, the provisions of subsection (c) of section  ten
hundred  eighty-eight of this chapter notwithstanding, no interest shall
be paid thereon.
  S 18. Section 187-g of the tax law, as added by section 2 of part H of
chapter 1 of the laws of 2003, is amended to read as follows:
  S 187-g. Brownfield redevelopment tax credit. 1. Allowance of  credit.
A  taxpayer  shall  be  allowed  a credit, to be computed as provided in
section twenty-one  of  this  chapter,  against  the  taxes  imposed  by
sections  one  hundred  eighty-three[,] AND one hundred eighty-four [and
one hundred eighty-five] of this article. Provided,  however,  that  the
amount  of  such credit allowable against the tax imposed by section one
hundred eighty-four of this article shall be the excess of the amount of
such credit over the amount  of  any  credit  allowed  by  this  section
against  the  tax  imposed  by  section one hundred eighty-three of this
article.
  2. Application of credit. In no event  shall  the  credit  under  this
section  be  allowed  in  an amount which will reduce the tax payable to
less than the applicable minimum tax fixed by section one hundred eight-
y-three [or one hundred eighty-five] of this article. If,  however,  the
amount  of  credit  allowable  under  this  section 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
refunded in accordance with the provisions of section ten hundred eight-
y-six of this chapter. Provided, however, the provisions  of  subsection
(c) of section ten hundred eighty-eight of this chapter notwithstanding,
no interest shall be paid thereon.
  S  19.  Section 187-h of the tax law, as added by section 13 of part H
of chapter 1 of the laws of 2003, subdivision 1 as amended by section  5
of  part  H  of  chapter  577 of the laws of 2004, is amended to read as
follows:

S. 6359                            232                           A. 8559

  S 187-h. Remediated brownfield credit  for  real  property  taxes  for
qualified  sites.  1. Allowance of credit. A taxpayer shall be allowed a
credit, to be computed as provided in subdivision (b) of  section  twen-
ty-two  of  this  chapter,  against  the  taxes  imposed by sections one
hundred  eighty-three[,]  AND  one  hundred eighty-four [and one hundred
eighty-five] of this article. Provided, however, that the amount of such
credit allowed against the tax imposed by section  one  hundred  eighty-
four  of  this  article shall be the excess of the amount of such credit
over the amount of any credit allowed by this section  against  the  tax
imposed by section one hundred eighty-three of this article.
  2.  Application  of  credit.  In  no event shall the credit under this
section be allowed in an amount which will reduce  the  tax  payable  to
less than the applicable minimum tax fixed by section one hundred eight-
y-three  [or  one hundred eighty-five] of this article. If, however, the
amount of credit allowed under this section for any taxable year reduces
the tax to such amount, any amount of credit not thus 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 eight-
y-six of this chapter. Provided, however, the provisions  of  subsection
(c) of section ten hundred eighty-eight of this chapter notwithstanding,
no interest shall be paid thereon.
  S  20.  Section 187-i of the tax law, as added by section 20 of part H
of chapter 1 of the laws of 2003, is amended to read as follows:
  S 187-i. Environmental remediation insurance credit. 1.  Allowance  of
credit. A taxpayer shall be allowed a credit, to be computed as provided
in  section  twenty-three  of this chapter, against the taxes imposed by
sections one hundred eighty-three[,] AND one  hundred  eighty-four  [and
one  hundred  eighty-five]  of this article. Provided, however, that the
amount of such credit allowable against the tax imposed by  section  one
hundred eighty-four of this article shall be the excess of the amount of
such  credit  over  the  amount  of  any  credit allowed by this section
against the tax imposed by section  one  hundred  eighty-three  of  this
article.
  2.  Application  of  credit.  In  no event shall the credit under this
section be allowed in an amount which will reduce  the  tax  payable  to
less  than  the  applicable  minimum  tax  fixed  by section one hundred
eighty-three [or one hundred eighty-five] of this article. If,  however,
the  amount  of credit allowable under this section 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
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  21.  Subdivision  2  of  section  187-n of the tax law, as added by
chapter 537 of the laws of 2005, is amended to read as follows:
  2. Application of credit. In no event  shall  the  credit  under  this
section  be  allowed  in  an amount which will reduce the tax payable to
less than the applicable  minimum  tax  fixed  by  section  one  hundred
eighty-three  [or one hundred eighty-five] of this article. If, however,
the amount of credit allowable under this section 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
refunded  in  accordance  with  the  provisions  of section one thousand
eighty-six  of  this  chapter.  Provided,  however,  the  provisions  of

S. 6359                            233                           A. 8559

subsection  (c)  of  section  one  thousand eighty-eight of this chapter
notwithstanding, no interest shall be paid thereon.
  S  22.  Subdivisions 1 and 3 of section 187-n of the tax law, subdivi-
sion 1 as amended by section 1 of part C1 of chapter 57 of the  laws  of
2009  and subdivision 3 as added by chapter 446 of the laws of 2005, are
amended to read as follows:
  (1) Allowance of credit. For taxable years  beginning  before  January
first, two thousand nine, a taxpayer whose business is not substantially
engaged  in  the  commercial  generation, distribution, transmission, or
servicing of energy or energy products shall be allowed a credit against
the taxes imposed  by  sections  one  hundred  eighty-three[,]  AND  one
hundred eighty-four [and one hundred eighty-five] of this article, equal
to  its  qualified fuel cell electric generating equipment expenditures.
Provided, however, that the amount of such credit allowable against  the
tax  imposed by section one hundred eighty-four of this article shall be
the excess of the amount of such credit over the amount  of  any  credit
allowed  by  this section against the tax imposed by section one hundred
eighty-three of this article. This credit shall not exceed one  thousand
five  hundred  dollars  per  generating unit with respect to any taxable
year. The credit provided for herein shall be allowed  with  respect  to
the taxable year in which the fuel cell electric generating equipment is
placed in service.
  (3)  Application  of  credit.  In no event shall the credit under this
section be allowed in an amount which will reduce  the  tax  payable  to
less than the applicable minimum tax fixed by section one hundred eight-
y-three  [or  one hundred eighty-five] of this article. If, however, the
amount of credit allowable under  this  section  for  any  taxable  year
reduces  the  tax to such amount, any amount of credit not deductible in
such taxable year may be carried over to the following year or years and
may be deducted from the taxpayer's tax for such year or years.
  S 23. Section 187-o of the tax law, as added by section 3 of part Y of
chapter 57 of the laws of 2010, is amended to read as follows:
  S 187-o. Temporary deferral nonrefundable payout credit. 1.  Allowance
of  credit.  A  taxpayer  shall  be  allowed a credit, to be computed as
provided in subdivision one of  section  thirty-four  of  this  chapter,
against either the taxes imposed by sections one hundred eighty-three[,]
AND  one  hundred eighty-four, [and one hundred eighty-five,] or the tax
imposed by section one hundred eighty-six-a of  this  article.  However,
the amount of such credit against the tax imposed by section one hundred
eighty-four  of  this  article shall be the excess of the amount of that
credit over the amount of any credit allowed by this section against the
tax imposed by section one hundred eighty-three of this article.
  2. Application of credit. In no event  shall  the  credit  under  this
section  be  allowed in an amount which will reduce the tax to less than
the applicable minimum tax fixed by section one hundred eighty-three [or
one hundred eighty-five] of this article. If,  however,  the  amount  of
credit  allowed  under this section for any taxable year reduces the tax
to such amount, any amount of credit not deductible in such taxable year
may be carried over to the following year or years and may  be  deducted
from the taxpayer's tax for such year or years.
  S 24. Section 187-p of the tax law, as added by section 3 of part Y of
chapter 57 of the laws of 2010, is amended to read as follows:
  S  187-p. Temporary deferral refundable payout credit. 1. Allowance of
credit. A taxpayer shall be allowed a credit, to be computed as provided
in subdivision two of section thirty-four of this chapter,  against  the
taxes  imposed  by  sections one hundred eighty-three[,] AND one hundred

S. 6359                            234                           A. 8559

eighty-four [and one hundred eighty-five] of this article,  or  the  tax
imposed  by  section  one hundred eighty-six-a of this article. However,
the amount of such credit against the tax imposed by section one hundred
eighty-four  of  this  article shall be the excess of the amount of that
credit over the amount of any credit allowed by this section against the
tax imposed by section one hundred eighty-three of this article.
  2. Application of credit. In no event  shall  the  credit  under  this
section  be  allowed in an amount which will reduce the tax to less than
the applicable minimum tax fixed by section one hundred eighty-three [or
one hundred eighty-five] of this ar