NY State Senate Bill 2015-S1438

Senate Bill S1438

2015-2016 Legislative Session

Enacts the "New Start New York act" to reduce certain taxes on businesses and establishing the 3-D program

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Archive: Last Bill Status - In Senate Committee Investigations And Government Operations Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 06, 2016	referred to investigations and government operations
Jan 12, 2015	referred to investigations and government operations

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2015-S1438 (ACTIVE) - Details

Current Committee:: Senate Investigations And Government Operations
Law Section:: Tax Law
Laws Affected:: Amd Part NN §6, Chap 59 of 2009; amd §612, Tax L; amd §425, RPT L; add Art 22 §§500 - 502, Ec Dev L
Versions Introduced in Other Legislative Sessions:: 2017-2018: S4391
2019-2020: S4755
2021-2022: S4734

2015-S1438 (ACTIVE) - Summary

Enacts the "New Start New York act"; provides for the repeal, on March 31, 2015, of the temporary state energy and utility service conservation assessment; increases the deduction from the federal gross adjusted income of certain small businesses; grants eligibility for the basic STAR exemption to certain small businesses

2015-S1438 (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S1438

TITLE OF BILL:  An act to enact the "New Start New York act"; to amend
chapter 59 of the laws of 2009, amending the public service law
relating to financing the operations of the department of public
service, the public service commission, department support and energy
management services provided by other state agencies, in relation to
accelerating the expiration of certain provisions thereof (Part A); to
amend the tax law, in relation to increasing the reduction of federal
adjusted gross income granted to certain small businesses (Part B); to
amend the real property tax law, in relation to extending eligibility
for the school tax relief exemption to certain small businesses (Part
C); and to amend the economic development law, in relation to
establishing the 3-D program (Part D)

PURPOSE:

To enact the "New Start New York Act" to reduce certain taxes on
businesses and establishing the 3-D program.

SUMMARY OF PROVISIONS:

Section 1. Sets forth the short title of "New Start New York act."

Section 2. This act enacts into law major components of legislation
enabling existing businesses to compete, succeed and create jobs.

Each component in contained in parts A-D as follows:

Part A. This part accelerates the repeal of the Article 18-a utility
bill surcharge from 2017 to 2015. Section 6 of part NN of chapter 59
of the laws of 2009, amending the public service law relating to
financing the operations of the department of public service, the
public service commission, department support and energy management
services provided by other state agencies, as amended by section 2 of
part BB of chapter 59 of the laws of 2013, is amended to set forth an
effective date and change the date of repeal for subdivision 6 of
section 18-a of the public service law as added by section four of
this act.

Part B. Increases the five percent small business and farm income
deduction to ten percent. Section 1. Paragraph 39 of subsection (c) of
section 612 of the tax law, as added by section 1 of part Y of chapter
59 of the laws of 2013, is amended to allow small businesses and farms
tax deductions of 5 percent of net items of income, gain, loss and
deduction attributable to such business or farm for taxable years
beginning after 2014, and ten percent for taxable years beginning
after 2015.

Part C. Establishes a STAR property tax exemption for small
businesses. Section 1. Paragraph (a) of subdivision 2 of section 425
of the real property tax law, as amended by section 1 of part E of
chapter 83 of the laws of 2002, is amended to include small businesses
which satisfy the criteria set forth for a basic STAR exemption.

Part C. Section 2. Establishes the type of property which may qualify
for an exemption to be a primary place of business of a small
business. (a-1) To qualify for an exemption pursuant to this section,


a small business must be a business entity, other than a sole
proprietorship, which employs not less than two employees, nor more
than fifty employees at its primary place of business. (a-2) For the
purpose of this section, "person" or "owner" shall include a small
business.

Part D. Section 1. Amends the economic development law by adding a new
Article 22 to be known as the "3-D Program" which allows Startup NY
benefits to businesses that Dream, Design, and Develop a product in
this state. This section outlines the eligibility criteria for
manufacturers in order to participate in the 3-D program. This section
also outlines the tax benefits associated with the 3-D Program
available to participating small businesses.

Section 3. Sets forth a severability clause. Section 4. Sets forth the
effective date.

JUSTIFICATION:

This legislation is designed to catalyze the innovation, design and
manufacture of new products by creating a more business-friendly
climate in New York with additional tax relief and reform. The New
Start NY plan is designed to encourage through the concept for
entrepreneurs of DREAM IT HERE. DESIGN IT HERE. DEVELOP IT HERE. The
goal being for innovators to be able to bring exciting new ideas from
the drawing board to the marketplace under the umbrella of components
created in this new tax relief package and business friendly
initiatives. Therefore, simultaneously creating the opportunity for
job growth and sustainability of our small business community which
continues to be the backbone of our economy.

LEGISLATIVE HISTORY:

New legislation

FISCAL IMPLICATIONS:

To be determined

EFFECTIVE DATE:

This act shall take effect immediately; provided that the applicable
effective date of Parts A through D of this act shall be as
specifically set forth in the last section of such parts.

2015-S1438 (ACTIVE) - Bill Text download pdf

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

                                  1438

                       2015-2016 Regular Sessions

                            I N  S E N A T E

                            January 12, 2015
                               ___________

Introduced  by  Sens.  GRIFFO, SEWARD -- read twice and ordered printed,
  and when printed to be committed to the  Committee  on  Investigations
  and Government Operations

AN ACT to enact the "New Start New York act"; to amend chapter 59 of the
  laws  of  2009,  amending the public service law relating to financing
  the operations of the department of public service, the public service
  commission, department support and energy management services provided
  by other state agencies, in relation to accelerating the expiration of
  certain provisions thereof (Part A); to amend the tax law, in relation
  to increasing the reduction of federal adjusted gross  income  granted
  to  certain  small businesses (Part B); to amend the real property tax
  law, in relation to extending eligibility for the  school  tax  relief
  exemption  to  certain  small  businesses  (Part  C); and to amend the
  economic development law, in relation to establishing the 3-D  program
  (Part D)

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

  Section 1. Short title. This act shall be known as the "New Start  New
York act".
  S 2. This act enacts into law major components of legislation enabling
existing  businesses  in  the  state  to compete, succeed and create new
jobs. Each component is wholly contained within  a  Part  identified  as
Parts  A  through  D.  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, including
the effective date of the Part, which makes reference to a  section  "of
this act", when used in connection with that particular component, shall
be  deemed to mean and refer to the corresponding section of the Part in
which it is found. Section four of  this  act  sets  forth  the  general
effective date of this act.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD03469-01-5

S. 1438                             2

                                 PART A

  Section  1.  Section  6  of part NN of chapter 59 of the laws of 2009,
amending the public service law relating to financing the operations  of
the department of public service, the public service commission, depart-
ment  support  and  energy  management  services provided by other state
agencies, as amended by section 2 of part BB of chapter 59 of  the  laws
of 2013, is amended to read as follows:
  S  6.  This act shall take effect immediately; provided, however, that
subdivision 6 of section 18-a of the public service  law,  as  added  by
section  four  of  this  act  shall  take effect April 1, 2009 and shall
expire and be deemed repealed March 31, [2017] 2015; provided,  that  if
section  four of this act shall become law after April 1, 2009, it shall
take effect immediately and shall be deemed to have been in  full  force
and  effect  on and after April 1, 2009; and provided, further, that the
provisions of subdivision 6 of section 18-a of the  public  service  law
shall  continue  in  effect with regard to all such assessments incurred
prior to repeal of this section.
  S 2. This act shall take effect immediately.

                                 PART B

  Section 1. Paragraph 39 of subsection (c) of section 612  of  the  tax
law,  as added by section 1 of part Y of chapter 59 of the laws of 2013,
is amended to read as follows:
  (39) In the case of a taxpayer who is a small business who  has  busi-
ness  income  and/or  farm  income  as defined in the laws of the United
States, an amount equal to three percent of the  net  items  of  income,
gain,  loss and deduction attributable to such business or farm entering
into federal adjusted gross income, but not less than zero, for  taxable
years  beginning  after two thousand thirteen, an amount equal to [three
and three-quarters] FIVE percent of the net items of income, gain,  loss
and deduction attributable to such business or farm entering into feder-
al  adjusted  gross  income,  but  not less than zero, for taxable years
beginning after two thousand fourteen, and an amount equal to [five] TEN
percent of the net items of income, gain, loss and  deduction  attribut-
able  to  such  business  or  farm  entering into federal adjusted gross
income, but not less than zero, for taxable years  beginning  after  two
thousand  fifteen.  For  the  purposes of this paragraph, the term small
business shall mean a sole proprietor or a farm business who employs one
or more persons during the taxable year and who has net business  income
or net farm income of less than two hundred fifty thousand dollars.
  S 2. This act shall take effect immediately.

                                 PART C

  Section  1.  Paragraph (a) of subdivision 2 of section 425 of the real
property tax law, as amended by section 1 of part E of chapter 83 of the
laws of 2002, is amended to read as follows:
  (a) Overview. There shall be two variations of the  exemption  author-
ized  by  this  section:  an exemption for property owned by persons who
satisfy OR A SMALL BUSINESS WHICH SATISFIES the criteria  set  forth  in
subdivision  three  of this section, which shall be known as the "basic"
STAR exemption, and an exemption for property owned by  senior  citizens
who  satisfy  the criteria set forth in both subdivisions three and four
of this section, which shall be known as the "enhanced" STAR  exemption.

S. 1438                             3

The  exempt  amount for each assessing unit shall be determined annually
as set forth in this subdivision, by multiplying the  "base  figure"  by
the locally-applicable "sales price differential factor," if any, multi-
plying  the  product  by  the  appropriate "equalization factor" for the
assessing unit, and, if necessary, increasing the result  to  equal  the
applicable  "floor."  The result is then rounded to the nearest multiple
of ten dollars.
  S 2. Paragraphs (a), (b) and (b-1) of subdivision 3 of section 425  of
the  real  property  tax law, paragraph (a) as amended by chapter 264 of
the laws of 2000, paragraph (b) as added by section 1 of part B of chap-
ter 389 of the laws of 1997 and paragraph (b-1) as added by section 1 of
part FF of chapter 57 of the laws of 2010, are  amended  and  three  new
paragraphs (a-1), (a-2) and (b-2) are added to read as follows:
  (a)  Property  use. To qualify for exemption pursuant to this section,
the property must be a one, two or three family residence, a farm dwell-
ing [or], residential property held in condominium or  cooperative  form
of  ownership  OR THE PRIMARY PLACE OF BUSINESS OF A SMALL BUSINESS.  If
the property is not an eligible type of property, but a portion  of  the
property  is  partially  used  by the owner as a primary residence, that
portion which is so used shall be entitled to the exemption provided  by
this  section;  provided that in no event shall the exemption exceed the
assessed value attributable to that portion.
  (A-1) SMALL BUSINESS. TO QUALIFY FOR AN  EXEMPTION  PURSUANT  TO  THIS
SECTION,  A  SMALL BUSINESS MUST BE A BUSINESS ENTITY, OTHER THAN A SOLE
PROPRIETORSHIP, WHICH EMPLOYS NOT LESS THAN TWO EMPLOYEES, NOR MORE THAN
FIFTY EMPLOYEES AT ITS PRIMARY PLACE OF BUSINESS.
  (A-2) PERSON. FOR THE PURPOSES OF THIS SECTION,  "PERSON"  OR  "OWNER"
SHALL INCLUDE A SMALL BUSINESS.
  (b)  Primary  residence.  The property must serve as the primary resi-
dence of one or more of the owners thereof, OR AS THE PRIMARY  PLACE  OF
BUSINESS OF A SMALL BUSINESS.
  (b-1)  Income.  For  final assessment rolls to be used for the levy of
taxes for the two thousand eleven-two thousand twelve  school  year  and
thereafter,  [the]  A  RESIDENTIAL  parcel's affiliated income may be no
greater than five hundred thousand dollars, as determined by the commis-
sioner of taxation and finance pursuant to section one hundred  seventy-
one-u  of  the  tax law, in order to be eligible for the basic exemption
authorized by this section. As used herein, the term "affiliated income"
shall mean the combined income of all of the owners of  the  parcel  who
resided  primarily thereon on the applicable taxable status date, and of
any owners' spouses residing primarily thereon. For exemptions on  final
assessment  rolls  to be used for the levy of taxes for the two thousand
eleven-two thousand twelve  school  year,  affiliated  income  shall  be
determined  based  upon  the  parties'  incomes  for the income tax year
ending in two thousand nine. In each subsequent school year, the  appli-
cable  income  tax year shall be advanced by one year. The term "income"
as used herein shall have the same meaning as  in  subdivision  four  of
this section.
  (B-2)  PRIMARY  PLACE  OF BUSINESS. FOR SMALL BUSINESSES, THE PROPERTY
SHALL BE PROPERTY AT A SINGLE LOCATION WITHIN THE STATE, UPON WHICH  THE
SMALL BUSINESS CARRIES ON ITS BUSINESS ENTERPRISE.
  S 3. Paragraph (a) of subdivision 5 of section 425 of the real proper-
ty  tax law, as amended by section 5 of part E of chapter 83 of the laws
of 2002, is amended to read as follows:
  (a) Generally. Every school district shall  notify,  or  cause  to  be
notified,  each  person  owning residential real property AND EACH SMALL

S. 1438                             4

BUSINESS OWNING REAL PROPERTY in the school district of  the  provisions
of  this  section.  The  provisions  of this subdivision may be met by a
notice sent to such persons in substantially the following form:  "Resi-
dential  AND  SMALL  BUSINESS  real  property  may qualify for a partial
exemption from school district taxes under the New York state school tax
relief (STAR) program. To receive such exemption, owners  of  qualifying
property must file an application with their local assessor on or before
the  applicable  taxable  status date.   For further information, please
contact your local assessor."
  S 4. Paragraph (a) of subdivision 6 of section 425 of the real proper-
ty tax law, as amended by chapter 6 and as further amended  by  subdivi-
sion  (b)  of  section 1 of part W of chapter 56 of the laws of 2010, is
amended to read as follows:
  (a) Generally. All owners of the property who primarily reside thereon
must jointly OR, IN THE CASE OF A SMALL BUSINESS, THE  OWNER  OR  OWNERS
THEREOF  MUST  file an application for exemption with the assessor on or
before the appropriate taxable status  date.  Such  application  may  be
filed  by  mail  if  it  is  enclosed  in  a  postpaid envelope properly
addressed to the appropriate assessor, deposited in  a  post  office  or
official depository under the exclusive care of the United States postal
service, and postmarked by the United States postal service on or before
the  applicable taxable status date. Each such application shall be made
on a form prescribed by the commissioner, which shall require the appli-
cant or applicants to agree to notify  the  assessor  if  their  primary
residence  OR  PRIMARY PLACE OF BUSINESS changes while their property is
receiving the exemption. The assessor may request that proof of residen-
cy be submitted with  the  application.  If  the  applicant  requests  a
receipt from the assessor as proof of submission of the application, the
assessor  shall  provide  such receipt. If such request is made by other
than personal request, the applicant shall provide the assessor  with  a
self-addressed postpaid envelope in which to mail the receipt.
  S  5.  Subdivision  10 of section 425 of the real property tax law, as
added by section 1 of part B of chapter 389 of the laws of  1997,  para-
graph  (a)  as further amended by subdivision (b) of section 1 of part W
of chapter 56 of the laws of 2010, is amended to read as follows:
  10. Proof of residency. (a) Requests. From time to time, the  assessor
may  request  proof  of  residency OR PROOF OF PRIMARY PLACE OF BUSINESS
from the owner or owners of any property which  is  exempt  pursuant  to
this section. In addition, the assessor shall request proof of residency
OR  PRIMARY  PLACE  OF  BUSINESS  from  any  such  owner  or owners when
requested to do so by the commissioner.
  (b) Timing. A request for proof of residency OR PRIMARY PLACE OF BUSI-
NESS shall be mailed at least sixty days prior to  the  ensuing  taxable
status  date.  The owner or owners shall submit proof of their residency
OR PRIMARY PLACE OF BUSINESS to the assessor on or  before  the  ensuing
taxable status date.
  (c)  Review  of submission. The burden shall be on the owner or owners
to establish that the property is their  primary  residence  OR  PRIMARY
PLACE  OF BUSINESS.   If they submit proof of residency OR PRIMARY PLACE
OF BUSINESS on or before  the  ensuing  taxable  status  date,  and  the
submission demonstrates to the assessor's satisfaction that the property
is  the primary residence OR PRIMARY PLACE OF BUSINESS of one or more of
the owners thereof, and if the requirements of this section  are  other-
wise  satisfied,  the  exemption shall continue in effect on the ensuing
tentative assessment roll.   Otherwise, the assessor  shall  discontinue
the  exemption on the next ensuing tentative assessment roll as provided

S. 1438                             5

[herein] IN THIS SECTION,  and,  where  appropriate,  shall  proceed  as
further provided [herein] IN THIS SECTION.
  S  6.  Subparagraph  (i) of paragraph (a) of subdivision 11 of section
425 of the real property tax law, as added by section 1  of  part  B  of
chapter 389 of the laws of 1997, is amended to read as follows:
  (i)  the property may not be the primary residence OR PRIMARY PLACE OF
BUSINESS of the owner or owners who applied for the exemption,
  S 7. Subparagraph (iii) of paragraph (b) 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) the property does not serve as  the  primary  residence  OR  THE
PRIMARY PLACE OF BUSINESS of any of its owners;
  S 8. This act shall take effect immediately and shall apply to taxable
years beginning on or after January 1, 2016.

                                 PART D

  Section  1.  The  economic  development law is amended by adding a new
article 22 to read as follows:

                               ARTICLE 22
                               3-D PROGRAM

SECTION 500. SHORT TITLE.
        501. ELIGIBILITY CRITERIA FOR MANUFACTURERS.
        502. TAX BENEFITS.
  S 500. SHORT TITLE. THIS ARTICLE SHALL BE KNOWN AND MAY  BE  CITED  AS
THE "DREAMED IN NEW YORK, DESIGNED IN NEW YORK AND DEVELOPED IN NEW YORK
PROGRAM" OR THE "3-D PROGRAM".
  S  501. ELIGIBILITY CRITERIA FOR MANUFACTURERS. 1. IN ORDER TO PARTIC-
IPATE IN THE 3-D PROGRAM, A BUSINESS THAT MANUFACTURES A PRODUCT  WITHIN
THE STATE SHALL SATISFY ALL OF THE FOLLOWING CRITERIA:
  (A)  THE  MANUFACTURER DESIGNED AND DEVELOPED A NEW PRODUCT WITHIN THE
STATE;
  (B) THE MANUFACTURER MANUFACTURES SUCH NEW PRODUCT IN THIS STATE;
  (C) THE MANUFACTURER'S PRIMARY PLACE FOR THE MANUFACTURE OF  SUCH  NEW
PRODUCT IS IN THE STATE; AND
  (D)  THE  COMMISSIONER SHALL HAVE CERTIFIED THAT SUCH MANUFACTURER HAS
SATISFIED THE REQUIREMENTS OF PARAGRAPHS (A), (B) AND (C) OF THIS SUBDI-
VISION, AND SHALL HAVE CERTIFIED THE LOCATION OR  LOCATIONS  WITHIN  THE
STATE AT WHICH THE NEW PRODUCT IS MANUFACTURED.
  2.  AN ELIGIBLE BUSINESS MAY BE ORGANIZED AS A CORPORATION, A PARTNER-
SHIP, A LIMITED LIABILITY COMPANY OR A SOLE PROPRIETORSHIP.
  3. A BUSINESS MUST BE IN COMPLIANCE WITH  ALL  WORKER  PROTECTION  AND
ENVIRONMENTAL  LAWS  AND  REGULATIONS. IN ADDITION, A BUSINESS SHALL NOT
OWE ANY PAST DUE FEDERAL, STATE OR MUNICIPAL TAXES.
  S 502. TAX BENEFITS. A BUSINESS THAT IS CERTIFIED BY THE  COMMISSIONER
TO BE ELIGIBLE TO PARTICIPATE IN THE 3-D PROGRAM AND ITS EMPLOYEES SHALL
BE  ENTITLED  TO ALL BENEFITS GRANTED TO PARTICIPANTS IN THE START-UP NY
PROGRAM PURSUANT TO ARTICLE TWENTY-ONE OF THIS  CHAPTER  AND  ANY  OTHER
PROVISION OF LAW RELATED THERETO.
  S  2.  This act shall take effect immediately and shall apply to taxes
imposed on or after January 1, 2016.
  S 3. Severability clause. If any clause, sentence, paragraph, subdivi-
sion, section or part of this act shall be  adjudged  by  any  court  of
competent  jurisdiction  to  be invalid, such judgment shall not affect,

S. 1438                             6

impair, or invalidate the remainder thereof, but shall  be  confined  in
its  operation  to the clause, sentence, paragraph, subdivision, section
or part thereof directly involved in the controversy in which such judg-
ment 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 4. This act shall take effect immediately; provided,  however,  that
the  applicable effective date of Parts A through D of this act shall be
as specifically set forth in the last section of such Parts.

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Senate Bill S1438

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Sponsored By

Joseph A. Griffo