S. 4694 2
EMERGING TECHNOLOGY AND BIOTECHNOLOGY COMPANIES IN THIS STATE HAVING
UNUSED BUT OTHERWISE ALLOWABLE CARRYOVERS OF RESEARCH AND DEVELOPMENT
TAX CREDITS AND OTHERWISE ALLOWABLE NET OPERATING LOSS CARRYOVERS PURSU-
ANT TO SUBPARAGRAPH (I) OF PARAGRAPH (B) OF SUBDIVISION ONE OF SECTION
TWO HUNDRED TEN-B OF THIS ARTICLE AND SECTION TWO HUNDRED EIGHT, RESPEC-
TIVELY, TO SURRENDER THOSE TAX BENEFITS IN EXCHANGE FOR PRIVATE FINAN-
CIAL ASSISTANCE TO BE MADE TO A CORPORATION FILING PURSUANT TO THIS
ARTICLE, WHICH HAS OBTAINED A CORPORATION BUSINESS TAX BENEFIT CERTIF-
ICATE IN AN AMOUNT EQUAL TO AT LEAST SEVENTY-FIVE PERCENT OF THE AMOUNT
OF THE SURRENDERED TAX BENEFITS.
(C) THE COMMISSIONER SHALL CALCULATE THE VALUE OF THE NET OPERATING
LOSS CARRYOVER FOR PURPOSES OF THE BENEFIT CERTIFICATE EQUAL TO THE
AMOUNT OF THE CARRYOVER TIMES THE APPLICABLE BUSINESS ALLOCATION
PERCENTAGE AND TAX RATE OF THE EMERGING TECHNOLOGY OR BIOTECHNOLOGY
COMPANY.
(D) THE COMMISSIONER, IN COOPERATION WITH THE COMMISSIONER OF ECONOMIC
DEVELOPMENT, SHALL REVIEW AND APPROVE APPLICATIONS BY TAXPAYERS PURSUANT
TO THE PROVISIONS OF THIS ARTICLE TO ACQUIRE SURRENDERED TAX BENEFITS
APPROVED PURSUANT TO PARAGRAPH (B) OF THIS SUBDIVISION, WHICH SHALL BE
ISSUED IN THE FORM OF CORPORATION BUSINESS TAX BENEFIT TRANSFER CERTIF-
ICATES, IN EXCHANGE FOR PRIVATE FINANCIAL ASSISTANCE TO BE MADE BY THE
TAXPAYER IN AN AMOUNT EQUAL TO AT LEAST SEVENTY-FIVE PERCENT OF THE
AMOUNT OF THE SURRENDERED TAX BENEFIT OF AN EMERGING TECHNOLOGY OR
BIOTECHNOLOGY COMPANY IN THE STATE. THE PRIVATE FINANCIAL ASSISTANCE
SHALL ASSIST IN FUNDING EXPENSES INCURRED IN CONNECTION WITH THE OPERA-
TION OF A NEW OR EXPANDING EMERGING TECHNOLOGY OR BIOTECHNOLOGY COMPANY
IN THE STATE, INCLUDING BUT NOT LIMITED TO THE EXPENSES OF FIXED ASSETS,
SUCH AS THE CONSTRUCTION AND ACQUISITION AND DEVELOPMENT OF REAL ESTATE,
MATERIALS, START-UP, TENANT FIT-OUT, WORKING CAPITAL, SALARIES,
RESEARCH, AND DEVELOPMENT EXPENDITURES.
(E) THE COMMISSIONER SHALL COORDINATE THE APPLICATIONS, IN CONJUNCTION
WITH THE DEPARTMENT OF ECONOMIC DEVELOPMENT, FOR SURRENDER AND ACQUISI-
TION OF UNUSED BUT OTHERWISE ALLOWABLE TAX BENEFITS PURSUANT TO THIS
SECTION IN A MANNER THAT CAN BEST STIMULATE AND ENCOURAGE THE EXTENSION
OF PRIVATE FINANCIAL ASSISTANCE TO NEW AND EXPANDING EMERGING TECHNOLOGY
AND BIOTECHNOLOGY COMPANIES IN THIS STATE INTO A WRITTEN AGREEMENT WITH
SUCH COMPANY CONCERNING THE TERMS AND CONDITIONS OF THE PRIVATE FINAN-
CIAL ASSISTANCE MADE IN EXCHANGE FOR THE CERTIFICATE. THE WRITTEN AGREE-
MENT MAY CONTAIN TERMS CONCERNING THE MAINTENANCE BY THE NEW OR EXPAND-
ING EMERGING TECHNOLOGY OR BIOTECHNOLOGY COMPANY OF A HEADQUARTERS OR A
BASE OF OPERATION IN THIS STATE.
2. (A) A TAXPAYER THAT HAS ACQUIRED A CORPORATION BUSINESS TAX BENEFIT
CERTIFICATE PURSUANT TO THE PROVISIONS OF PARAGRAPH (B) OF THIS SUBDIVI-
SION THAT INCLUDES THE RIGHT TO A NET OPERATING LOSS CARRYOVER DEDUCTION
SHALL ATTACH THAT CERTIFICATE TO ANY RETURN THE TAXPAYER IS REQUIRED TO
FILE AND SHALL OTHERWISE APPLY THE NET OPERATING LOSS CARRYOVER
DEDUCTION AS EVIDENCED BY THE CERTIFICATE ACCORDING TO THE PROVISIONS OF
PARAGRAPH (B) OF SUBDIVISION ONE OF THIS SECTION AND ANY RULES OR REGU-
LATIONS THE COMMISSIONER MAY ADOPT TO CARRY OUT THE PROVISIONS OF THIS
SECTION.
(B) A NEW OR EXPANDING EMERGING TECHNOLOGY OR BIOTECHNOLOGY COMPANY
THAT HAS SURRENDERED AN UNUSED NET OPERATING LOSS CARRYOVER PURSUANT TO
THE PROVISIONS OF SECTION TWO HUNDRED EIGHT OF THIS ARTICLE SHALL NOT BE
ALLOWED A NET OPERATING LOSS CARRYOVER DEDUCTION BASED UPON THE RIGHT TO
SUCH A DEDUCTION, AS EVIDENCED BY SUCH CORPORATION BUSINESS TAX BENEFIT
S. 4694 3
CERTIFICATE, AND SHALL ATTACH A COPY OF THE CERTIFICATE TO ANY RETURN
THE TAXPAYER IS REQUIRED TO FILE.
3. (A) A TAXPAYER THAT HAS ACQUIRED A CORPORATION BUSINESS TAX BENEFIT
CERTIFICATE PURSUANT TO SUBDIVISION ONE OF THIS SECTION THAT INCLUDES
THE RIGHT TO A RESEARCH AND DEVELOPMENT TAX CREDIT CARRYOVER PURSUANT TO
SUBPARAGRAPH (I) OF PARAGRAPH (B) OF SUBDIVISION ONE OF SECTION TWO
HUNDRED TEN-B OF THIS ARTICLE SHALL ATTACH THAT CERTIFICATE TO ANY
RETURN THE TAXPAYER IS REQUIRED TO FILE AND SHALL OTHERWISE APPLY THE
CREDIT CARRYOVER, AS EVIDENCED BY THE CERTIFICATE, ACCORDING TO THE
PROVISIONS OF PARAGRAPH (B) OF SUBDIVISION ONE OF THIS SECTION AND ANY
RULES OR REGULATIONS THE COMMISSIONER MAY ADOPT TO CARRY OUT THE
PROVISIONS OF THIS SECTION.
(B) A NEW OR EXPANDING TECHNOLOGY OR BIOTECHNOLOGY COMPANY THAT HAS
SURRENDERED AN UNUSED RESEARCH AND DEVELOPMENT TAX CREDIT CARRYOVER
SHALL NOT BE ALLOWED A RESEARCH AND DEVELOPMENT TAX CREDIT CARRYOVER
BASED UPON THE RIGHT TO SUCH A CREDIT CARRYOVER, AS EVIDENCED BY THE
CORPORATION BUSINESS TAX BENEFIT CERTIFICATE, AND SHALL ATTACH A COPY OF
THE CERTIFICATE TO ANY RETURN THE TAXPAYER IS REQUIRED TO FILE.
4. FOR THE PURPOSES OF THIS SECTION, THE FOLLOWING TERMS HAVE THE
FOLLOWING MEANINGS:
(A) "ADVANCED COMPUTING" MEANS A TECHNOLOGY USED IN THE DESIGNING AND
DEVELOPING OF COMPUTING HARDWARE AND SOFTWARE, INCLUDING INNOVATIONS IN
DESIGNING THE FULL SPECTRUM OF HARDWARE FROM HAND-HELD CALCULATORS TO
SUPER COMPUTERS, AND PERIPHERAL EQUIPMENT.
(B) "ADVANCED MATERIALS" MEANS MATERIALS WITH ENGINEERED PROPERTIES
CREATED THROUGH THE DEVELOPMENT OF SPECIALIZED PROCESSING AND SYNTHESIS
TECHNOLOGY, INCLUDING CERAMICS, HIGH VALUE-ADDED METALS, ELECTRONIC
MATERIALS, COMPOSITES, POLYMERS, AND BIOMATERIALS.
(C) "BIOTECHNOLOGY" MEANS THE CONTINUALLY EXPANDING BODY OF FUNDAMEN-
TAL KNOWLEDGE ABOUT THE FUNCTION OF BIOLOGICAL SYSTEMS FROM THE MACRO
LEVEL TO THE MOLECULAR AND SUBATOMIC LEVELS, AS WELL AS NOVEL PRODUCTS,
SERVICES, TECHNOLOGIES, AND SUB-TECHNOLOGIES DEVELOPED AS A RESULT OF
INSIGHTS GAINED FROM RESEARCH ADVANCES WHICH ADD TO THAT BODY OF FUNDA-
MENTAL KNOWLEDGE.
(D) "CONTROL", WITH RESPECT TO A CORPORATION, MEANS OWNERSHIP, DIRECT-
LY OR INDIRECTLY, OF STOCK POSSESSING EIGHTY PERCENT OR MORE OF THE
TOTAL COMBINED VOTING POWER OF ALL CLASSES OF THE STOCK OF THE CORPO-
RATION ENTITLED TO VOTE; AND "CONTROL", WITH RESPECT TO A TRUST, MEANS
OWNERSHIP, DIRECTLY OR INDIRECTLY, OF EIGHTY PERCENT OR MORE OF THE
BENEFICIAL INTEREST IN THE PRINCIPAL OR INCOME OF THE TRUST. THE OWNER-
SHIP OF STOCK IN A CORPORATION, OF A CAPITAL OR PROFITS INTEREST IN A
PARTNERSHIP OR ASSOCIATION, OR OF A BENEFICIAL INTEREST IN A TRUST SHALL
BE DETERMINED IN ACCORDANCE WITH THE RULES FOR CONSTRUCTIVE OWNERSHIP OF
STOCK PROVIDED IN SUBSECTION (C) OF SECTION 267 OF THE FEDERAL INTERNAL
REVENUE CODE OF 1986, 26 U.S.C. §267, OTHER THAN PARAGRAPH (3) OF
SUBSECTION (C) OF SUCH SECTION.
(E) "CONTROLLED GROUP" MEANS ONE OR MORE CHAINS OF CORPORATIONS
CONNECTED THROUGH STOCK OWNERSHIP WITH A COMMON PARENT CORPORATION IF
STOCK POSSESSING AT LEAST EIGHTY PERCENT OF THE VOTING POWER OF ALL
CLASSES OF STOCK OF EACH OF THE CORPORATIONS IS OWNED DIRECTLY OR INDI-
RECTLY BY ONE OR MORE OF THE CORPORATIONS AND THE COMMON PARENT OWNS
DIRECTLY STOCK POSSESSING AT LEAST EIGHTY PERCENT OF THE VOTING POWER OF
ALL CLASSES OF STOCK OF AT LEAST ONE OF THE OTHER CORPORATIONS.
(F) "ELECTRONIC DEVICE TECHNOLOGY" MEANS A TECHNOLOGY INVOLVING MICRO-
ELECTRONICS, SEMICONDUCTORS, ELECTRONIC EQUIPMENT, AND INSTRUMENTATION,
RADIO FREQUENCY, MICROWAVE, AND MILLIMETER ELECTRONICS, AND OPTICAL AND
S. 4694 4
OPTIC-ELECTRICAL DEVICES, OR DATA AND DIGITAL COMMUNICATIONS AND IMAGING
DEVICES.
(G) "ENVIRONMENTAL TECHNOLOGY" MEANS ASSESSMENT AND PREVENTION OF
THREATS OR DAMAGE TO HUMAN HEALTH OR THE ENVIRONMENT, ENVIRONMENTAL
CLEANUP, OR THE DEVELOPMENT OF ALTERNATIVE ENERGY SOURCES.
(H) "MEDICAL DEVICE TECHNOLOGY" MEANS A TECHNOLOGY INVOLVING ANY
MEDICAL EQUIPMENT OR PRODUCT (OTHER THAN A PHARMACEUTICAL PRODUCT) THAT
HAS THERAPEUTIC VALUE, DIAGNOSTIC VALUE, OR BOTH, AND IS REGULATED BY
THE FEDERAL FOOD AND DRUG ADMINISTRATION.
(I) "PARTNERSHIP" MEANS A SYNDICATE, GROUP, POOL, JOINT VENTURE, OR
OTHER UNINCORPORATED ORGANIZATION THROUGH OR BY MEANS OF WHICH ANY BUSI-
NESS, FINANCIAL OPERATION, OR VENTURE IS CARRIED ON, AND WHICH IS NOT A
TRUST OR ESTATE, A CORPORATION, OR A SOLE PROPRIETORSHIP.
(J) "PILOT SCALE MANUFACTURING" MEANS DESIGN, CONSTRUCTION, AND TEST-
ING OF PREPRODUCTION PROTOTYPES AND MODELS IN THE FIELDS OF ADVANCED
COMPUTING, ADVANCED MATERIALS, BIOTECHNOLOGY, ELECTRONIC DEVICE TECHNOL-
OGY, ENVIRONMENTAL TECHNOLOGY, AND MEDICAL DEVICE TECHNOLOGY, OTHER THAN
FOR COMMERCIAL SALE, EXCLUDING SALES OF PROTOTYPES OR SALES FOR MARKET
TESTING, IF TOTAL GROSS RECEIPTS FROM SUCH SALES OF THE PRODUCT,
SERVICE, OR PROCESS DO NOT EXCEED ONE MILLION DOLLARS.
(K) "QUALIFIED INVESTMENT" MEANS THE NON-REFUNDABLE INVESTMENT AT RISK
IN A SMALL NEW YORK-BASED HIGH TECHNOLOGY BUSINESS BY A TAXPAYER THAT IS
NOT A RELATED PERSON OF THE SMALL NEW YORK BASED HIGH-TECHNOLOGY BUSI-
NESS, THE TRANSFER OF WHICH IS IN CONNECTION WITH A TRANSACTION IN
EXCHANGE FOR STOCK, INTEREST IN PARTNERSHIPS OR JOINT VENTURES, LICENSES
(EXCLUSIVE OR NON-EXCLUSIVE), RIGHT TO USE TECHNOLOGY, MARKETING RIGHTS,
WARRANTS, OPTIONS, OR ANY ITEM SIMILAR TO THOSE INCLUDED IN THIS PARA-
GRAPH, INCLUDING BUT NOT LIMITED TO OPTIONS OR RIGHTS TO ACQUIRE ANY OF
THE ITEMS INCLUDED IN THIS PARAGRAPH.
(L) "QUALIFIED RESEARCH EXPENSES" MEANS QUALIFIED RESEARCH EXPENSES,
AS DEFINED IN SECTION 41 OF THE FEDERAL INTERNAL REVENUE CODE OF 1986,
26 U.S.C. § 41, AS IN EFFECT ON JUNE THIRTIETH, NINETEEN HUNDRED NINE-
TY-TWO, IN THE FIELDS OF ENVIRONMENTAL TECHNOLOGY OR MEDICAL DEVICE
TECHNOLOGY.
(M) "RELATED PERSON" MEANS:
(1) A CORPORATION, PARTNERSHIP, ASSOCIATION, OR TRUST BY THE TAXPAYER;
(2) AN INDIVIDUAL, CORPORATION, PARTNERSHIP, ASSOCIATION, OR TRUST
THAT IS IN THE CONTROL OF THE TAXPAYER;
(3) A CORPORATION, PARTNERSHIP, ASSOCIATION, OR TRUST CONTROLLED BY AN
INDIVIDUAL, CORPORATION, PARTNERSHIP, ASSOCIATION, OR TRUST THAT IS IN
THE CONTROL OF THE TAXPAYER; OR
(4) A MEMBER OF THE SAME CONTROLLED GROUP AS A TAXPAYER.
(N) "SMALL NEW YORK BASED HIGH-TECHNOLOGY BUSINESS" MEANS A CORPO-
RATION DOING BUSINESS EMPLOYING OR OWNING CAPITAL OR PROPERTY, OR MAIN-
TAINING AN OFFICE, IN THIS STATE THAT HAS QUALIFIED RESEARCH EXPENSES
PAID OR INCURRED FOR RESEARCH CONDUCTED IN THIS STATE OR CONDUCTS PILOT
SCALE MANUFACTURING IN THIS STATE, AND HAS FEWER THAN TWO HUNDRED TWEN-
TY-FIVE EMPLOYEES, OF WHOM SEVENTY-FIVE PERCENT ARE NEW YORK-BASED
EMPLOYEES FILLING A POSITION OR JOB IN THIS STATE.
(O) "TAX YEAR" MEANS THE FISCAL OR CALENDAR ACCOUNTING YEAR OF A
TAXPAYER.
§ 3. The tax law is amended by adding a new section 606-a to read as
follows:
§ 606-A. NONCORPORATION TAX BENEFIT CERTIFICATE TRANSFER PROGRAM. (A)
(1) THE DEPARTMENT SHALL ESTABLISH A CORPORATION BUSINESS TAX BENEFIT
CERTIFICATE TRANSFER PROGRAM TO ALLOW NEW OR EXPANDING EMERGING TECHNOL-
S. 4694 5
OGY AND BIOTECHNOLOGY COMPANIES IN THIS STATE HAVING UNUSED AMOUNTS OF
RESEARCH AND DEVELOPMENT TAX CREDITS OTHERWISE ALLOWABLE PURSUANT TO
SUBPARAGRAPH (A) OF PARAGRAPH TWO OF SUBSECTION (A) OF SECTION SIX
HUNDRED SIX OF THIS ARTICLE, WHICH CANNOT BE APPLIED FOR THE CREDIT'S
TAX YEAR, AND UNUSED NET OPERATING LOSS CARRYOVER PURSUANT TO SUBSECTION
(B) OF SECTION SIX HUNDRED SEVENTEEN AND SUBSECTION (B) OF SECTION SIX
HUNDRED THIRTY-THREE OF THIS ARTICLE TO SURRENDER SUCH TAX BENEFITS FOR
USE BY OTHER ENTITIES SUBJECT TO THE PROVISIONS OF THIS ARTICLE IN
EXCHANGE FOR PRIVATE FINANCIAL ASSISTANCE TO BE PROVIDED SUCH TAXPAYERS
OR EXPANDING EMERGING TECHNOLOGY AND BIOTECHNOLOGY COMPANIES. SUCH
TAXPAYERS SHALL BE PROVIDED WITH A NONCORPORATION BUSINESS TAX BENEFIT
CERTIFICATE TO BE DEVELOPED BY THE COMMISSIONER.
(2) THE COMMISSIONER, IN COOPERATION WITH THE COMMISSIONER OF THE
DEPARTMENT OF ECONOMIC DEVELOPMENT, SHALL REVIEW AND APPROVE APPLICA-
TIONS BY NEW OR EXPANDING TECHNOLOGY AND BIOTECHNOLOGY COMPANIES IN THIS
STATE HAVING UNUSED BUT OTHERWISE ALLOWABLE CARRYOVER OF RESEARCH AND
DEVELOPMENT TAX CREDITS AND OTHERWISE ALLOWABLE NET OPERATING LOSS
CARRYOVERS PURSUANT TO EITHER SUBPARAGRAPH (A) OF PARAGRAPH TWO OF
SUBSECTION (A) OF SECTION SIX HUNDRED SIX OR SUBSECTION (B) OF SECTION
SIX HUNDRED SEVENTEEN OR SUBSECTION (B) OF SECTION SIX HUNDRED THIRTY-
THREE OF THIS ARTICLE, RESPECTIVELY, TO SURRENDER THOSE TAX BENEFITS IN
EXCHANGE FOR PRIVATE FINANCIAL ASSISTANCE TO BE MADE TO A TAXPAYER
FILING PURSUANT TO THIS ARTICLE WHO HAS OBTAINED A NONCORPORATION BUSI-
NESS TAX BENEFIT CERTIFICATE IN AN AMOUNT EQUAL TO AT LEAST SEVENTY-FIVE
PERCENT OF THE AMOUNT OF THE SURRENDERED TAX BENEFITS.
(3) THE COMMISSIONER SHALL CALCULATE THE VALUE OF THE NET OPERATING
LOSS CARRYOVER FOR PURPOSES OF THE BENEFIT CERTIFICATE EQUAL TO THE
AMOUNT OF THE CARRYOVER TIMES THE APPLICABLE BUSINESS ALLOCATION
PERCENTAGE AND TAX RATE OF THE EMERGING TECHNOLOGY OR BIOTECHNOLOGY
COMPANY.
(4) THE COMMISSIONER, IN COOPERATION WITH THE COMMISSIONER OF THE
DEPARTMENT OF ECONOMIC DEVELOPMENT, SHALL REVIEW AND APPROVE APPLICA-
TIONS BY TAXPAYERS SUBJECT TO THE PROVISIONS OF THIS ARTICLE TO ACQUIRE
SURRENDERED TAX BENEFITS APPROVED PURSUANT TO PARAGRAPH TWO OF THIS
SUBSECTION, WHICH SHALL BE ISSUED IN THE FORM OF NONCORPORATION BUSINESS
TAX BENEFIT TRANSFER CERTIFICATES, IN EXCHANGE FOR PRIVATE FINANCIAL
ASSISTANCE TO BE MADE BY THE TAXPAYER IN AN AMOUNT EQUAL TO AT LEAST
SEVENTY-FIVE PERCENT OF THE AMOUNT OF THE SURRENDERED TAX BENEFIT OF AN
EMERGING TECHNOLOGY OR BIOTECHNOLOGY COMPANY IN THE STATE. THE PRIVATE
FINANCIAL ASSISTANCE SHALL ASSIST IN FUNDING EXPENSES INCURRED IN
CONNECTION WITH THE OPERATION OF A NEW OR EXPANDING EMERGING TECHNOLOGY
OR BIOTECHNOLOGY COMPANY IN THE STATE, INCLUDING BUT NOT LIMITED TO THE
EXPENSES OF FIXED ASSETS, SUCH AS THE CONSTRUCTION AND ACQUISITION AND
DEVELOPMENT OF REAL ESTATE, MATERIALS, START-UP, TENANT FIT-OUT, WORKING
CAPITAL, SALARIES, RESEARCH, AND DEVELOPMENT EXPENDITURES.
(5) THE COMMISSIONER SHALL COORDINATE THE APPLICATIONS, IN CONJUNCTION
WITH THE DEPARTMENT OF ECONOMIC DEVELOPMENT, FOR SURRENDER AND ACQUISI-
TION OF UNUSED BUT OTHERWISE ALLOWABLE TAX BENEFITS PURSUANT TO THIS
SECTION IN A MANNER THAT CAN BEST STIMULATE AND ENCOURAGE THE EXTENSION
OF PRIVATE FINANCIAL ASSISTANCE TO NEW AND EXPANDING EMERGING TECHNOLOGY
AND BIOTECHNOLOGY COMPANIES IN THIS STATE INTO A WRITTEN AGREEMENT WITH
SUCH COMPANY CONCERNING THE TERMS AND CONDITIONS OF THE PRIVATE FINAN-
CIAL ASSISTANCE MADE IN EXCHANGE FOR THE CERTIFICATE. THE WRITTEN AGREE-
MENT MAY CONTAIN TERMS CONCERNING THE MAINTENANCE BY THE NEW OR EXPAND-
ING EMERGING TECHNOLOGY OR BIOTECHNOLOGY COMPANY OF A HEADQUARTERS OR A
BASE OF OPERATION IN THIS STATE.
S. 4694 6
(B)(1) A TAXPAYER THAT HAS ACQUIRED A NONCORPORATION BUSINESS TAX
BENEFIT CERTIFICATE PURSUANT TO THE PROVISIONS OF PARAGRAPH TWO OF
SUBSECTION (A) OF THIS SECTION THAT INCLUDES THE RIGHT TO A NET OPERAT-
ING LOSS CARRYOVER DEDUCTION SHALL ATTACH THAT CERTIFICATE TO ANY RETURN
THE TAXPAYER IS REQUIRED TO FILE AND SHALL OTHERWISE APPLY THE NET OPER-
ATING LOSS CARRYOVER DEDUCTION, AS EVIDENCED BY THE CERTIFICATE, ACCORD-
ING TO THE PROVISIONS OF PARAGRAPH TWO OF SUBSECTION (A) OF THIS SECTION
AND ANY RULES OR REGULATIONS THE COMMISSIONER MAY ADOPT TO CARRY OUT THE
PROVISIONS OF THIS SECTION.
(2) A NEW OR EXPANDING EMERGING TECHNOLOGY OR BIOTECHNOLOGY COMPANY
THAT HAS SURRENDERED AN UNUSED NET OPERATING LOSS CARRYOVER PURSUANT TO
THE PROVISIONS OF SUBSECTION (B) OF SECTION SIX HUNDRED SEVENTEEN AND
SUBSECTION (B) OF SECTION SIX HUNDRED THIRTY-THREE OF THIS ARTICLE SHALL
NOT BE ALLOWED A NET OPERATING LOSS CARRYOVER DEDUCTION BASED UPON THE
RIGHT TO SUCH A DEDUCTION, AS EVIDENCED BY SUCH NONCORPORATION BUSINESS
TAX BENEFIT CERTIFICATE, AND SHALL ATTACH A COPY OF THE CERTIFICATE TO
ANY RETURN THE TAXPAYER IS REQUIRED TO FILE.
(C) (1) A TAXPAYER THAT HAS ACQUIRED A NONCORPORATION BUSINESS TAX
BENEFIT CERTIFICATE PURSUANT TO SUBSECTION (A) OF THIS SECTION THAT
INCLUDES THE RIGHT TO A RESEARCH AND DEVELOPMENT TAX CREDIT CARRYOVER
SHALL ATTACH THAT CERTIFICATE TO ANY RETURN THE TAXPAYER IS REQUIRED TO
FILE AND SHALL OTHERWISE APPLY THE CREDIT CARRYOVER, AS EVIDENCED BY THE
CERTIFICATE, ACCORDING TO THE PROVISIONS OF PARAGRAPH TWO OF SUBSECTION
(A) OF THIS SECTION AND ANY RULES OR REGULATIONS THE COMMISSIONER MAY
ADOPT TO CARRY OUT THE PROVISIONS OF THIS SECTION.
(2) A NEW OR EXPANDING EMERGING TECHNOLOGY OR BIOTECHNOLOGY COMPANY
THAT HAS SURRENDERED AN UNUSED RESEARCH AND DEVELOPMENT TAX CREDIT
CARRYOVER SHALL NOT BE ALLOWED A RESEARCH AND DEVELOPMENT TAX CREDIT
CARRYOVER BASED UPON THE RIGHT TO SUCH A CREDIT CARRYOVER, AS EVIDENCED
BY THE NONCORPORATION BUSINESS TAX BENEFIT CERTIFICATE, AND SHALL ATTACH
A COPY OF THE CERTIFICATE TO ANY RETURN THE TAXPAYER IS REQUIRED TO
FILE.
(D) FOR THE PURPOSES OF THIS SECTION, THE FOLLOWING TERMS SHALL HAVE
THE FOLLOWING MEANINGS:
(1) "ADVANCED COMPUTING" MEANS A TECHNOLOGY USED IN DESIGNING AND
DEVELOPING COMPUTING HARDWARE AND SOFTWARE, INCLUDING INNOVATIONS IN
DESIGNING THE FULL SPECTRUM OF HARDWARE FROM HAND-HELD CALCULATORS TO
SUPER COMPUTERS, AND PERIPHERAL EQUIPMENT.
(2) "ADVANCED MATERIALS" MEANS MATERIALS WITH ENGINEERED PROPERTIES
CREATED THROUGH THE DEVELOPMENT OF SPECIALIZED PROCESSING AND SYNTHESIS
TECHNOLOGY, INCLUDING CERAMICS, HIGH VALUE-ADDED METALS, ELECTRONIC
MATERIALS, COMPOSITES, POLYMERS, AND BIOMATERIALS.
(3) "BIOTECHNOLOGY" MEANS THE CONTINUALLY EXPANDING BODY OF FUNDAMEN-
TAL KNOWLEDGE ABOUT THE FUNCTION OF BIOLOGICAL SYSTEMS FROM THE MACRO
LEVEL TO THE MOLECULAR AND SUBATOMIC LEVELS, AS WELL AS NOVEL PRODUCTS,
SERVICES, TECHNOLOGIES, AND SUB-TECHNOLOGIES DEVELOPED AS A RESULT OF
INSIGHTS GAINED FROM RESEARCH ADVANCES WHICH ADD TO THAT BODY OF FUNDA-
MENTAL KNOWLEDGE.
(4) "CONTROL", WITH RESPECT TO A CORPORATION, MEANS OWNERSHIP, DIRECT-
LY OR INDIRECTLY, OF STOCK POSSESSING EIGHTY PERCENT OR MORE OF THE
TOTAL COMBINED VOTING POWER OF ALL CLASSES OF THE STOCK OF THE CORPO-
RATION ENTITLED TO VOTE; AND "CONTROL", WITH RESPECT TO A TRUST, MEANS
OWNERSHIP, DIRECTLY OR INDIRECTLY, OF EIGHTY PERCENT OR MORE OF THE
BENEFICIAL INTEREST IN THE PRINCIPAL OR INCOME OF THE TRUST. THE OWNER-
SHIP OF STOCK IN A CORPORATION, OF A CAPITAL OR PROFITS INTEREST IN A
PARTNERSHIP OR ASSOCIATION, OR OF A BENEFICIAL INTEREST IN A TRUST SHALL
S. 4694 7
BE DETERMINED IN ACCORDANCE WITH THE RULES FOR CONSTRUCTIVE OWNERSHIP OF
STOCK PROVIDED IN SUBSECTION (C) OF SECTION 267 OF THE FEDERAL INTERNAL
REVENUE CODE OF 1986, 26 U.S.C. § 267, OTHER THAN PARAGRAPH (3) OF
SUBSECTION (C) OF SUCH SECTION.
(5) "CONTROLLED GROUP" MEANS ONE OR MORE CHAINS OF CORPORATIONS
CONNECTED THROUGH STOCK OWNERSHIP WITH A COMMON PARENT CORPORATION IF
STOCK POSSESSING AT LEAST EIGHTY PERCENT OF THE VOTING POWER OF ALL
CLASSES OF STOCK OF EACH OF THE CORPORATIONS IS OWNED DIRECTLY OR INDI-
RECTLY BY ONE OR MORE OF THE CORPORATIONS AND THE COMMON PARENT OWNS
DIRECTLY STOCK POSSESSING AT LEAST EIGHTY PERCENT OF THE VOTING POWER OF
ALL CLASSES OF STOCK OF AT LEAST ONE OF THE OTHER CORPORATIONS.
(6) "ELECTRONIC DEVICE TECHNOLOGY" MEANS A TECHNOLOGY INVOLVING MICRO-
ELECTRONICS, SEMICONDUCTORS, ELECTRONIC EQUIPMENT, AND INSTRUMENTATION,
RADIO FREQUENCY, MICROWAVE, AND MILLIMETER ELECTRONICS, AND OPTICAL AND
OPTIC-ELECTRICAL DEVICES, OR DATA AND DIGITAL COMMUNICATIONS AND IMAGING
DEVICES.
(7) "ENVIRONMENTAL TECHNOLOGY" MEANS ASSESSMENT AND PREVENTION OF
THREATS OR DAMAGE TO HUMAN HEALTH OR THE ENVIRONMENT, ENVIRONMENTAL
CLEANUP, OR THE DEVELOPMENT OF ALTERNATIVE ENERGY SOURCES.
(8) "MEDICAL DEVICE TECHNOLOGY" MEANS A TECHNOLOGY INVOLVING ANY
MEDICAL EQUIPMENT OR PRODUCT (OTHER THAN A PHARMACEUTICAL PRODUCT) THAT
HAS THERAPEUTIC VALUE, DIAGNOSTIC VALUE, OR BOTH, AND IS REGULATED BY
THE FEDERAL FOOD AND DRUG ADMINISTRATION.
(9) "PARTNERSHIP" MEANS A SYNDICATE, GROUP, POOL, JOINT VENTURE OR
OTHER UNINCORPORATED ORGANIZATION THROUGH OR BY MEANS OF WHICH ANY BUSI-
NESS, FINANCIAL OPERATION, OR VENTURE IS CARRIED ON, AND WHICH IS NOT A
TRUST OR ESTATE, A CORPORATION, OR A SOLE PROPRIETORSHIP.
(10) "PILOT SCALE MANUFACTURING" MEANS DESIGN, CONSTRUCTION, AND TEST-
ING OF PREPRODUCTION PROTOTYPES AND MODELS IN THE FIELDS OF ADVANCED
COMPUTING, ADVANCED MATERIALS, BIOTECHNOLOGY, ELECTRONIC DEVICE TECHNOL-
OGY, ENVIRONMENTAL TECHNOLOGY, AND MEDICAL DEVICE TECHNOLOGY, OTHER THAN
FOR COMMERCIAL SALE, EXCLUDING SALES OF PROTOTYPES OR SALES FOR MARKET
TESTING, IF TOTAL GROSS RECEIPTS FROM SUCH SALES OF THE PRODUCT,
SERVICE, OR PROCESS DO NOT EXCEED ONE MILLION DOLLARS.
(11) "QUALIFIED INVESTMENT" MEANS THE NON-REFUNDABLE INVESTMENT AT
RISK IN A SMALL NEW YORK-BASED HIGH TECHNOLOGY BUSINESS BY A TAXPAYER
THAT IS NOT A RELATED PERSON OF THE SMALL NEW YORK BASED HIGH-TECHNOLOGY
BUSINESS, THE TRANSFER OF WHICH IS IN CONNECTION WITH A TRANSACTION IN
EXCHANGE FOR STOCK, INTEREST IN PARTNERSHIPS OR JOINT VENTURES, LICENSES
(EXCLUSIVE OR NON-EXCLUSIVE), RIGHTS TO USE TECHNOLOGY, MARKETING
RIGHTS, WARRANTS, OPTIONS, OR RIGHTS TO ACQUIRE ANY OF THE ITEMS SIMILAR
TO THOSE INCLUDED IN THIS PARAGRAPH, INCLUDING BUT NOT LIMITED TO
OPTIONS OR RIGHTS TO ACQUIRE ANY OF THE ITEMS INCLUDED IN THIS PARA-
GRAPH.
(12) "QUALIFIED RESEARCH EXPENSES" MEANS QUALIFIED RESEARCH EXPENSES,
AS DEFINED IN SECTION 41 OF THE FEDERAL INTERNAL REVENUE CODE OF 1986,
26 U.S.C. § 41, AS IN EFFECT ON JUNE THIRTIETH, NINETEEN HUNDRED NINE-
TY-TWO, IN THE FIELDS OF ENVIRONMENTAL TECHNOLOGY OR MEDICAL DEVICE
TECHNOLOGY.
(13) "RELATED PERSON" MEANS:
(A) A CORPORATION, PARTNERSHIP, ASSOCIATION, OR TRUST BY THE TAXPAYER;
(B) AN INDIVIDUAL, CORPORATION, PARTNERSHIP, ASSOCIATION, OR TRUST
THAT IS IN THE CONTROL OF THE TAXPAYER;
(C) A CORPORATION, PARTNERSHIP, ASSOCIATION, OR TRUST CONTROLLED BY AN
INDIVIDUAL, CORPORATION, PARTNERSHIP, ASSOCIATION, OR TRUST THAT IS IN
THE CONTROL OF THE TAXPAYER; OR
S. 4694 8
(D) A MEMBER OF THE SAME CONTROLLED GROUP AS THE TAXPAYER.
(14) "SMALL NEW YORK BASED HIGH-TECHNOLOGY BUSINESS" MEANS A CORPO-
RATION DOING BUSINESS EMPLOYING OR OWNING CAPITAL OR PROPERTY, OR MAIN-
TAINING AN OFFICE, IN THIS STATE THAT HAS QUALIFIED RESEARCH EXPENSES
PAID OR INCURRED FOR RESEARCH CONDUCTED IN THIS STATE OR CONDUCTS PILOT
SCALE MANUFACTURING IN THIS STATE, AND HAS FEWER THAN TWO HUNDRED TWEN-
TY-FIVE EMPLOYEES, OF WHOM SEVENTY-FIVE PERCENT ARE NEW YORK-BASED
EMPLOYEES FILLING A POSITION OR JOB IN THIS STATE.
(15) "TAX YEAR" MEANS THE FISCAL OR CALENDAR ACCOUNTING YEAR OF A
TAXPAYER.
§ 4. This act shall take effect immediately and shall apply to taxable
years which commence on or after January 1, 2024.
