S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   3447
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                             January 31, 2023
                                ___________
 
 Introduced  by Sens. HELMING, TEDISCO -- read twice and ordered printed,
   and when printed to be committed to the  Committee  on  Investigations
   and Government Operations
 
 AN  ACT to amend the tax law, in relation to establishing business fran-
   chise, personal income and insurance franchise tax credits for employ-
   er provided or sponsored child care

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  The tax law is amended by adding a new section 48 to read
 as follows:
   § 48. EMPLOYER PROVIDED OR SPONSORED CHILD CARE. (A) DEFINITIONS.  FOR
 THE PURPOSES OF THIS SECTION, THE FOLLOWING TERMS SHALL HAVE THE FOLLOW-
 ING MEANINGS:
   (1)  "COST OF OPERATION" MEANS ANY REASONABLE DIRECT OPERATIONAL COSTS
 INCURRED BY AN EMPLOYER AS A RESULT OF PROVIDING  EMPLOYER  PROVIDED  OR
 EMPLOYER  SPONSORED  CHILD CARE FACILITIES; PROVIDED, HOWEVER, THAT SUCH
 TERM SHALL EXCLUDE THE COST OF ANY PROPERTY THAT IS QUALIFIED CHILD CARE
 PROPERTY.
   (2) "EMPLOYER" MEANS A TAXPAYER WHO IS AN EMPLOYER UPON WHOM TAXES ARE
 IMPOSED PURSUANT TO ARTICLE NINE-A, TWENTY-TWO OR THIRTY-THREE  OF  THIS
 CHAPTER.
   (3) "EMPLOYER PROVIDED" MEANS CHILD CARE OFFERED ON THE PREMISES OF AN
 EMPLOYER.
   (4)  "EMPLOYER SPONSORED" MEANS A CONTRACTUAL ARRANGEMENT WITH A CHILD
 CARE FACILITY THAT IS PAID FOR BY AN EMPLOYER.
   (5) "PREMISES OF THE  EMPLOYER"  MEANS  A  WORKPLACE  PREMISES  OF  AN
 EMPLOYER, WITHIN THE STATE, PROVIDING THE CHILD CARE, OR BY ONE EMPLOYER
 PROVIDING  THE  CHILD  CARE IN THE EVENT THAT THE CHILD CARE PROPERTY IS
 OWNED JOINTLY OR SEVERALLY BY SUCH EMPLOYER AND ONE OR  MORE  EMPLOYERS;
 PROVIDED,  HOWEVER, THAT IF SUCH WORKPLACE PREMISES ARE IMPRACTICABLE OR
 OTHERWISE UNSUITABLE FOR THE ON-SITE LOCATION OF A CHILD CARE  FACILITY,

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD08020-01-3
              

 S. 3447                             2
 
 AS  DETERMINED  BY  THE  OFFICE  OF  CHILDREN AND FAMILY SERVICES, OR IN
 CITIES OF ONE MILLION OR MORE, THE CITY DEPARTMENT OF HEALTH AND  MENTAL
 HYGIENE,  SUCH  FACILITY  MAY BE LOCATED WITHIN A REASONABLE DISTANCE OF
 THE PREMISES OF THE EMPLOYER.
   (6)  "QUALIFIED  CHILD CARE PROPERTY" INCLUDES, BUT IS NOT LIMITED TO,
 AMOUNTS EXPENDED  ON  LAND  ACQUISITION,  IMPROVEMENTS,  BUILDINGS,  AND
 BUILDING  IMPROVEMENTS AND FURNITURE, FIXTURES, AND EQUIPMENT, AND MEANS
 ALL REAL PROPERTY AND TANGIBLE PERSONAL PROPERTY PURCHASED  OR  ACQUIRED
 ON  OR AFTER JANUARY FIRST, TWO THOUSAND TWENTY-THREE, OR WHICH PROPERTY
 IS FIRST PLACED IN SERVICE ON OR AFTER JANUARY FIRST, TWO THOUSAND TWEN-
 TY-THREE, FOR USE EXCLUSIVELY IN THE CONSTRUCTION,  EXPANSION,  IMPROVE-
 MENT  OR OPERATION OF AN EMPLOYER PROVIDED CHILD CARE FACILITY, BUT ONLY
 IF:
   (A) THE FACILITY IS LICENSED OR COMMISSIONED BY THE OFFICE OF CHILDREN
 AND FAMILY SERVICES PURSUANT TO SECTION  THREE  HUNDRED  NINETY  OF  THE
 SOCIAL  SERVICES  LAW,  OR  IN  CITIES  OF ONE MILLION OR MORE, THE CITY
 DEPARTMENT OF HEALTH AND MENTAL HYGIENE PURSUANT TO ARTICLE  FORTY-SEVEN
 OF THE HEALTH CODE OF THE CITY OF NEW YORK.
   (B)  AT LEAST NINETY-FIVE PERCENT OF THE CHILDREN WHO USE THE FACILITY
 ARE CHILDREN OF EMPLOYEES OF:
   (I) THE EMPLOYER AND OTHER EMPLOYERS IN THE EVENT THAT THE CHILD  CARE
 PROPERTY  IS  OWNED JOINTLY OR SEVERALLY BY THE EMPLOYER AND ONE OR MORE
 OTHER EMPLOYERS; OR
   (II) A CORPORATION THAT IS A  MEMBER  OF  THE  TAXPAYER'S  "AFFILIATED
 GROUP"  WITHIN  THE  MEANING  OF SECTION 1504(A) OF THE INTERNAL REVENUE
 CODE.
   (C) THE EMPLOYER HAS NOT PREVIOUSLY CLAIMED ANY  TAX  CREDIT  FOR  THE
 COST  OF  OPERATION  FOR  SUCH  QUALIFIED  CHILD CARE PROPERTY PLACED IN
 SERVICE PRIOR TO TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST,  TWO
 THOUSAND TWENTY-THREE.
   (B) ALLOWANCE OF CREDIT. A TAX CREDIT AGAINST THE TAXES IMPOSED PURSU-
 ANT  TO  ARTICLES  NINE-A,  TWENTY-TWO  AND THIRTY-THREE OF THIS CHAPTER
 SHALL BE GRANTED TO AN EMPLOYER WHO PROVIDES OR SPONSORS CHILD CARE  FOR
 EMPLOYEES. SUCH TAX CREDIT SHALL BE IN AN AMOUNT EQUAL TO TEN PERCENT OF
 THE  COST  OF  OPERATION INCURRED BY THE EMPLOYER, AND SUCH CREDIT SHALL
 NOT EXCEED TEN THOUSAND DOLLARS  LESS  ANY  AMOUNTS  PAID  BY  EMPLOYEES
 DURING THE TAXABLE YEAR.
   (C)  CONDITIONS AND LIMITATIONS. THE TAX CREDIT ALLOWED UNDER SUBDIVI-
 SION (B) OF THIS SECTION SHALL BE SUBJECT TO  THE  FOLLOWING  CONDITIONS
 AND LIMITATIONS:
   (1)  THE  EMPLOYER  SHALL  CERTIFY  TO THE DEPARTMENT THE NAMES OF THE
 EMPLOYEES, THE NAME OF THE CHILD CARE PROVIDER, THE NUMBER  OF  CHILDREN
 SERVED  BY  CARE  SUBSIDIZED VIA THIS TAX CREDIT, THE NUMBER OF CHILDREN
 RECEIVING CARE WHO ARE EXCLUDED FROM THE TAX CREDIT  PURSUANT  TO  PARA-
 GRAPH  THREE  OF  THIS SUBDIVISION, AND SUCH OTHER INFORMATION AS MAY BE
 REQUIRED BY THE DEPARTMENT TO ENSURE THAT CREDITS ARE  GRANTED  ONLY  TO
 EMPLOYERS  WHO PROVIDE OR SPONSOR APPROVED CHILD CARE IN ACCORDANCE WITH
 THIS SECTION;
   (2) ONLY IN THE CASE OF EMPLOYER SPONSORED CARE,  THE  AVERAGE  CREDIT
 UTILIZED  PER  CHILD  SHALL  NOT EXCEED THE MARKET RATE PER CHILD ESTAB-
 LISHED BY THE OFFICE OF CHILDREN AND  FAMILY  SERVICES  FOR  THE  SOCIAL
 SERVICES DISTRICT WITHIN WHICH CHILD CARE IS PROVIDED; AND
   (3) THE EMPLOYER SHALL NOT RECEIVE ANY TAX CREDIT FOR CARE PROVIDED TO
 THE  CHILDREN  OF ANY EMPLOYEE WHOSE ANNUAL HOUSEHOLD INCOME EXCEEDS TWO
 HUNDRED THOUSAND DOLLARS.  THE  DEPARTMENT  SHALL  ESTABLISH  RULES  AND
 ACCOUNTING MEASURES TO ENSURE THAT ANY COSTS OF CARE PROVIDED TO EMPLOY-
 S. 3447                             3
 
 EES WITH ANNUAL HOUSEHOLD INCOMES EXCEEDING TWO HUNDRED THOUSAND DOLLARS
 ARE  ITEMIZED  BY THE EMPLOYER AND EXCLUDED FROM THE TAX CREDIT PROVIDED
 TO EMPLOYERS PURSUANT TO THIS SECTION.
   (D) ELECTION. IN ADDITION TO THE TAX CREDIT PROVIDED UNDER SUBDIVISION
 (B)  OF  THIS SECTION, AN EMPLOYER SHALL BE GRANTED A CREDIT AGAINST THE
 TAX FOR THE TAXABLE YEAR IN WHICH THE EMPLOYER FIRST PLACES  IN  SERVICE
 QUALIFIED  CHILD CARE PROPERTY. THE CREDIT SHALL EQUAL TWENTY PERCENT OF
 THE COST OF ALL QUALIFIED CHILD CARE PROPERTY PURCHASED OR  ACQUIRED  BY
 THE  EMPLOYER  AND  FIRST  PLACED IN SERVICE DURING A TAXABLE YEAR. SUCH
 CREDIT SHALL NOT EXCEED TWENTY THOUSAND DOLLARS.
   (E) CARRYOVER. THE TAX CREDIT ALLOWED UNDER SUBDIVISION  (D)  OF  THIS
 SECTION SHALL BE SUBJECT TO THE FOLLOWING CONDITIONS AND LIMITATIONS:
   (1)  ANY  SUCH CREDIT CLAIMED IN ANY TAXABLE YEAR BUT NOT USED IN SUCH
 TAXABLE YEAR MAY BE CARRIED FORWARD FOR THREE YEARS FROM  THE  CLOSE  OF
 SUCH  TAXABLE  YEAR.  THE SALE, MERGER, ACQUISITION OR BANKRUPTCY OF ANY
 EMPLOYER SHALL NOT CREATE NEW ELIGIBILITY FOR THE CREDIT IN ANY SUCCEED-
 ING TAXPAYER;
   (2) IN NO EVENT SHALL THE AMOUNT OF ANY SUCH TAX CREDIT, INCLUDING ANY
 CARRYOVER OF SUCH CREDIT FROM A PRIOR TAXABLE YEAR, EXCEED FIFTY PERCENT
 OF THE EMPLOYER'S TAX LIABILITY AS  DETERMINED  WITHOUT  REGARD  TO  ANY
 OTHER CREDITS; AND
   (3)  FOR  EVERY  YEAR  IN  WHICH  AN  EMPLOYER CLAIMS SUCH CREDIT, THE
 EMPLOYER SHALL ATTACH A SCHEDULE, WHOSE  FORM  AND  STRUCTURE  SHALL  BE
 ESTABLISHED  BY  THE  DEPARTMENT,  TO  THE EMPLOYER'S TAX RETURN SETTING
 FORTH THE FOLLOWING INFORMATION WITH RESPECT TO SUCH TAX CREDIT:
   (A) A DESCRIPTION OF THE CHILD CARE FACILITY;
   (B) THE AMOUNT OF QUALIFIED CHILD CARE PROPERTY  ACQUIRED  DURING  THE
 TAXABLE YEAR AND THE COST OF SUCH PROPERTY;
   (C) THE AMOUNT OF TAX CREDIT CLAIMED FOR THE TAXABLE YEAR;
   (D)  THE  AMOUNT  OF  QUALIFIED  CHILD CARE PROPERTY ACQUIRED IN PRIOR
 TAXABLE YEARS AND THE COST OF SUCH PROPERTY;
   (E) ANY TAX CREDIT UTILIZED BY THE EMPLOYER IN PRIOR TAXABLE YEARS;
   (F) THE AMOUNT OF TAX CREDIT CARRIED OVER FROM PRIOR YEARS;
   (G) THE AMOUNT OF TAX CREDIT UTILIZED BY THE EMPLOYER IN  THE  CURRENT
 TAXABLE YEAR;
   (H)  THE  AMOUNT OF TAX CREDIT TO BE CARRIED FORWARD TO SUBSEQUENT TAX
 YEARS; AND
   (I) A DESCRIPTION OF ANY RECAPTURE EVENT OCCURRING DURING THE  TAXABLE
 YEAR,  A CALCULATION OF THE RESULTING REDUCTION IN TAX CREDITS ALLOWABLE
 FOR THE RECAPTURE YEAR AND FUTURE TAXABLE YEARS, AND  A  CALCULATION  OF
 THE RESULTING INCREASE IN TAX FOR THE RECAPTURE YEAR.
   (F) RECAPTURE.
   (1)  IF THE TAXPAYER DISPOSES OF THE QUALIFIED CHILD CARE PROPERTY, OR
 IF SUCH PROPERTY CEASES TO BE A QUALIFIED  CHILD  CARE  PROPERTY  EXCEPT
 FOR:
   (A) ANY TRANSFER BY REASON OF DEATH;
   (B) ANY TRANSFER BETWEEN SPOUSES OR INCIDENT TO DIVORCE;
   (C)  ANY  TRANSACTION  TO WHICH SECTION 381(A) OF THE INTERNAL REVENUE
 CODE APPLIES;
   (D) ANY CHANGE IN THE FORM OF CONDUCTING THE EMPLOYER'S TRADE OR BUSI-
 NESS SO LONG AS THE PROPERTY IS RETAINED BY SUCH TRADE  OR  BUSINESS  AS
 QUALIFIED  CHILD  CARE  PROPERTY  AND THE EMPLOYER RETAINS A SUBSTANTIAL
 INTEREST IN SUCH TRADE OR BUSINESS; OR
   (E) ANY ACCIDENT OR CASUALTY, THE TAXPAYER'S TAX IMPOSED BY THIS ARTI-
 CLE FOR THE TAXABLE YEAR IN WHICH SUCH DISPOSITION OR  CESSATION  OCCURS
 S. 3447                             4
 
 SHALL  BE INCREASED BY THE RECAPTURE PORTION OF THE CREDIT ALLOWED UNDER
 PARAGRAPH TWO OF THIS SUBDIVISION FOR ALL PRIOR TAXABLE YEARS.
   (2)  FOR  PURPOSES OF PARAGRAPH ONE OF THIS SUBDIVISION, THE RECAPTURE
 PORTION SHALL REDUCE THE CREDIT OTHERWISE  ALLOWABLE  UNDER  SUBDIVISION
 (D)  OF THIS SECTION, BUT SHALL NOT, AT ANY POINT, REDUCE THE TAX CREDIT
 BELOW ZERO. ANY EXCESS OF THE RECAPTURE AMOUNT SHALL RESULT IN AN EQUIV-
 ALENT INCREASE IN THE TAX IMPOSED UNDER THIS SECTION.
   (G) RULES. THE COMMISSIONER SHALL PROMULGATE ANY RULES AND REGULATIONS
 NECESSARY TO IMPLEMENT AND ADMINISTER THE PROVISIONS OF THIS SECTION.
   (H) CROSS-REFERENCES. FOR THE APPLICATION OF THE  CREDIT  PROVIDED  IN
 THIS SECTION, SEE THE FOLLOWING PROVISIONS OF THIS CHAPTER:
   (1) ARTICLE 9-A: SECTION 210-B, SUBDIVISION 59;
   (2) ARTICLE 22: SECTION 606, SUBSECTION (BBB);
   (3) ARTICLE 33: SECTION 1511, SUBDIVISION (EE).
   §  2. Section 210-B of the tax law is amended by adding a new subdivi-
 sion 59 to read as follows:
   59. EMPLOYER PROVIDED OR SPONSORED CHILD CARE CREDIT. (A) ALLOWANCE OF
 CREDIT. A TAXPAYER WILL BE ALLOWED A CREDIT, TO BE COMPUTED AS  PROVIDED
 IN  SECTION  FORTY-EIGHT  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 OR IF THE TAXPAYER OTHERWISE PAYS TAX BASED ON THE  FIXED
 DOLLAR  MINIMUM 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.
   § 3. Subparagraph (B) of paragraph 1 of subsection (i) of section  606
 of the tax law is amended by adding a new clause (l) to read as follows:
 
 (L) EMPLOYER                         AMOUNT OF CREDIT
 PROVIDED OR SPONSORED                UNDER SUBDIVISION
 CHILD CARE CREDIT                    FIFTY-NINE OF
 UNDER SUBSECTION                     SECTION TWO HUNDRED
 (BBB)                                TEN-B
 
   §  4. Section 606 of the tax law is amended by adding a new subsection
 (bbb) to read as follows:
   (BBB) EMPLOYER PROVIDED OR SPONSORED CHILD CARE CREDIT. (1)  ALLOWANCE
 OF  CREDIT.  A  TAXPAYER  SHALL  BE  ALLOWED A CREDIT, TO BE COMPUTED AS
 PROVIDED IN SECTION FORTY-EIGHT OF THIS CHAPTER, AGAINST THE TAX IMPOSED
 BY THIS ARTICLE.
   (2) APPLICATION OF CREDIT. 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 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 WILL  BE
 PAID THEREON.
   §  5.  Section 1511 of the tax law is amended by adding a new subdivi-
 sion (ee) to read as follows:
 S. 3447                             5

   (EE) EMPLOYER PROVIDED OR SPONSORED CHILD CARE CREDIT.  (1)  ALLOWANCE
 OF  CREDIT.  A  TAXPAYER  WILL  BE  ALLOWED  A CREDIT, TO BE COMPUTED AS
 PROVIDED IN SECTION FORTY-EIGHT  OF  THIS  CHAPTER,  AGAINST  THE  TAXES
 IMPOSED BY THIS ARTICLE.
   (2)  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  MINIMUM  TAX FIXED BY 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 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.
   § 6. This act shall take effect immediately and shall apply to taxable
 years commencing on or after January 1, 2023.