RETRIEVE BILL Revenue - 0102
Legislative Bill Drafting Commission
12026-02-1
S. --------
SENATE
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IN SENATE--Introduced by Sen
--read twice and ordered printed,
and when printed to be committed
to the Committee on
-------- A.
ASSEMBLY
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IN ASSEMBLY--Introduced by M. of A.
--read once and referred to the
Committee on
*TAXLA*
(Enacts provisions of law necessary
to implement omnibus tax reductions)
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Tax. Omnibus Tax Reduction -Art 7
AN ACT
to amend the tax law, in relation to
amending the definition of new busi-
ness for purposes of the refundabil-
ity of certain credits under arti-
cles 9-A, 22, 32 and 33 thereof and
making technical corrections to the
empire zones program act, as enacted
by part GG of section 1 of chapter
63 of the laws of 2000 and to the
sales tax on certain gas or electric
utility service thereto and the
general municipal law, in relation
to extending the empire zone program
and in relation to a revision of an
empire zone (A); to amend the tax
law, in relation to the calculation
of the business allocation percent-
2 12026-02-1
age under article 9-A thereof for
manufacturers and in relation to the
alternative minimum tax under arti-
cle 9-A thereof (B); to amend the
tax law, in relation to providing a
tax credit under the article 9-A
corporation franchise tax and arti-
cle 22 personal income tax thereof
for soil improvement projects and
farmland improvement projects and in
relation to extending the agricul-
tural property tax credit under the
article 9-A corporation franchise
tax and the article 22 personal
income tax to taxpayers who own
agricultural assessment property
(C); to amend the tax law, in
relation to providing a tax credit
under article 9-A and article 22
thereof for donations of land, ease-
ments on land and other interests in
real property for conservation
purposes (D); to amend the tax law
and the parks, recreation and
historic preservation law, in
relation to providing a credit
against income tax for the rehabili-
tation of historic homes or for the
purchase of rehabilitated historic
homes in certain instances (E); to
amend the public housing law, in
relation to increasing the dollar
amount of statewide limitation on
the low-income housing tax credit
(F); to amend the tax law, in
relation to allowing taxpayers which
are biotechnology companies to claim
a refund of their investment tax
credits (G); to authorize and direct
the comptroller to make deposits to
the dedicated highway and bridge
trust fund (H); to amend the tax
law, in relation to certain tax
surcharges (I); to amend chapter 298
of the laws of 1985, amending the
tax law relating to the franchise
tax on banking corporations imposed
by the tax law, authorized to be
imposed by any city having a popu-
lation of one million or more by
chapter 772 of the laws of 1966 and
imposed by the administrative code
of the city of New York and relating
to other provisions of the tax law,
chapter 883 of the laws of 1975 and
3 12026-02-1
the administrative code of the city
of New York which relates to such
franchise tax, to amend chapter 817
of the laws of 1987, amending the
tax law and the environmental
conservation law, constituting the
business tax reform and rate
reduction act of 1987, to amend
chapter 525 of the laws of 1988,
amending the tax law and the admin-
istrative code of the city of New
York relating to the imposition of
taxes in the city of New York, in
relation to the effectiveness of
certain provisions of such chapters;
to amend the tax law, in relation to
permitting certain banking corpo-
rations otherwise subject to tax
under article 32 of such law to make
an election to be taxed under arti-
cle 9-A of such law; and to amend
the administrative code of the city
of New York, in relation to permit-
ting certain banking corporations
otherwise subject to tax under
subchapter 3 of chapter 6 of title
11 of such code to be taxed under
subchapter 2 of such code (J); to
amend chapter 405 of the laws of
1999 amending the real property tax
law relating to improving the admin-
istration of the school tax relief
(STAR) program and other laws, in
relation to the Lottery game of
quick draw (K); to amend the tax
law, in relation to joint, multi-
jurisdiction or out-of-state lottery
games and to repeal certain
provisions of such law relating
thereto (L); to amend the tax law
and the administrative code of the
city of New York, in relation to the
credit and deduction for college
tuition under the personal income
tax (M); to amend chapter 166 of the
laws of 1991, amending the tax law
and other laws relating to taxes, in
relation to the expiration of
certain provisions contained therein
and to repeal subdivision 8 of
section 1809 of the vehicle and
traffic law, in relation to the
expiration of the provisions of such
section (N); and to amend the tax
law, in relation to the tobacco
4 12026-02-1
products tax on moist snuff under
article 20 thereof (O)
The People of the State of New
York, represented in Senate and
Assembly, do enact as follows:
5 12026-02-1
1 Section 1. This act enacts into law major components of legislation
2 which are necessary to implement the state fiscal plan for the 2001-2002
3 state fiscal year. Each component is wholly contained within a Part
4 identified as Parts A through O. The effective date for each particular
5 provision contained within such Part is set forth in the last section of
6 such Part. Any provision in any section contained within a Part, includ-
7 ing the effective date of the Part, which makes reference to a section
8 "of this act", when used in connection with that particular component,
9 shall be deemed to mean and refer to the corresponding section of the
10 Part in which it is found. Section three of this act sets forth the
11 general effective date of this act.
12 PART A
13 Section 1. Subparagraph 3 of paragraph (j) of subdivision 12 of section
14 210 of the tax law, as amended by chapter 1043 of the laws of 1981, is
15 amended to read as follows:
16 (3) has been subject to tax under this article for more than four
17 five taxable years (excluding short taxable years) prior to the taxable
18 year during which the taxpayer first becomes eligible for the investment
19 tax credit .
20 § 2. Paragraph (e) of subdivision 19 of section 210 of the tax law, as
21 amended by chapter 708 of the laws of 1993, is amended to read as
22 follows:
23 (e) The credit and carryovers of such credit allowed under this subdi-
24 vision for any taxable year shall not, in the aggregate, reduce the tax
25 due for such year to less than the higher of the amounts prescribed in
26 paragraphs (c) and (d) of subdivision one of this section. However, if
6 12026-02-1
1 the amount of credit or carryovers of such credit, or both, allowed
2 under this subdivision for any taxable year reduces the tax to such
3 amount, or if any part of the credit or carryovers of such credit may
4 not be deducted from the tax otherwise due by reason of the final
5 sentence of paragraph (d) hereof, any amount of credit or carryovers of
6 such credit thus not deductible in such taxable year may be carried over
7 to the following year or years and may be deducted from the tax for such
8 year or years. In lieu of such carryover, any such taxpayer which quali-
9 fies as a new business under paragraph (j) of subdivision twelve of this
10 section may elect, on its report for its taxable year with respect to
11 which such credit is allowed, to treat fifty percent of the amount of
12 such carryover as an overpayment of tax to be credited or refunded in
13 accordance with the provisions of section ten hundred eighty-six of this
14 chapter. Provided, however, the provisions of subsection (c) of section
15 ten hundred eighty-eight of this chapter notwithstanding, no interest
16 shall be paid thereon. In applying such paragraph (j), the reference to
17 investment tax credit shall be deemed to be a reference to the credit
18 provided for under this subdivision, and the reference to "four taxable
19 years" shall be deemed to be a reference to the four taxable years prior
20 to each taxable year during which the taxpayer became eligible for such
21 credit.
22 § 3. Paragraph 10 of subsection (a) of section 606 of the tax law, as
23 added by chapter 103 of the laws of 1981 and subparagraph (B) as amended
24 by chapter 1043 of the laws of 1981, is amended to read as follows:
25 (10) For purposes of paragraph five of this subsection, an individual
26 who is either a sole proprietor or a member of a partnership shall qual-
27 ify as an owner of a new business unless:
7 12026-02-1
1 (A) the individual has previously received a refund of an investment
2 tax credit pursuant to the provisions of paragraph five of this
3 subsection;
4 (B) the business of which the individual is an owner is substantially
5 similar in operation and in ownership to a business entity taxable, or
6 previously taxable, under section one hundred eighty-three, one hundred
7 eighty-four, one hundred eighty-five or one hundred eighty-six of arti-
8 cle nine; article nine-a nine-A, thirty-two or thirty-three of this
9 chapter; article twenty-three of this chapter or which would have been
10 subject to tax under such article twenty-three (as such article was in
11 effect on January first, nineteen hundred eighty) or the income (or
12 losses) of which is (or was) includable under article twenty-two of this
13 chapter whereby the intent and purpose of this paragraph and paragraph
14 five of this subsection with respect to refunding of credit to new busi-
15 ness would be evaded; or
16 (C) (B) the individual has operated such new business entity in this
17 state for more than four five taxable years prior to the first day of
18 the taxable year during which such individual first becomes eligible for
19 the investment tax credit for which the refund is claimed with respect
20 to such new business entity (excluding short years of the business).
21 § 4. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
22 of the tax law, as separately amended by section 4 of part I, section 47
23 of part Y, section 4 of part CC, sections 4 and 15 of part GG and
24 section 5 of part II of chapter 63 of the laws of 2000, is amended to
25 read as follows:
26 (B) shall be treated as the owner of a new business with respect to
27 such share if the corporation qualifies as a new business pursuant to
28 paragraph (j) of subdivision twelve of section two hundred ten of this
8 12026-02-1
1 chapter , unless the shareholder has previously received a refund by
2 reason of the application of this subparagraph, or this subsection as it
3 was in effect for taxable years beginning before nineteen hundred nine-
4 ty-four .
5 The corporation's
6 With respect to the credit base under
7 following credit section two hundred ten
8 under this section: or section fourteen
9 hundred fifty-six of this
10 chapter is:
11 Investment tax credit Investment credit base
12 under subsection (a) or qualified
13 rehabilitation
14 expenditures under
15 subdivision twelve of
16 section two hundred ten
17 Empire zone Cost or other basis
18 investment tax credit under subdivision
19 under subsection (j) twelve-B
20 of section two hundred
21 ten
22 Empire zone Eligible wages under
23 wage tax credit subdivision nineteen of
24 under subsection (k) section two hundred ten
9 12026-02-1
1 or subsection (e) of
2 section fourteen hundred
3 fifty-six
4 Empire zone Qualified investments
5 capital tax credit and contributions under
6 under subsection (1) subdivision twenty of
7 section two hundred ten
8 or subsection (d) of
9 section fourteen hundred
10 fifty-six
11 Agricultural property tax Allowable school
12 credit under subsection (n) district property taxes under
13 subdivision twenty-two of
14 section two hundred ten
15 Credit for employment Qualified first-year wages or
16 of persons with dis- qualified second-year wages
17 abilities under under subdivision
18 subsection (o) twenty-three of section
19 two hundred ten
20 or subsection (f)
21 of section fourteen
22 hundred fifty-six
10 12026-02-1
1 Employment incentive Applicable investment credit
2 credit under subsec- base under subdivision
3 tion (a-1) twelve-D
4 Empire zone Applicable investment
5 employment credit under sub-
6 incentive credit under division twelve-C
7 subsection (j-1)
8 Alternative fuels credit Cost under subdivision
9 under subsection (p) twenty-four
10 Qualified emerging Applicable credit base
11 technology company under subdivision twelve-E
12 employment credit of section two hundred ten
13 under subsection (q)
14 Qualified emerging Qualified investments under
15 technology company subdivision twelve-F of
16 capital tax credit section two hundred ten
17 under subsection (r)
18 Credit for purchase of an Cost of an automated
19 automated external defibrillator external defibrillator under
20 under subsection (s) subdivision twenty-five of
21 section two hundred ten
22 or subsection (j) of section
23 fourteen hundred fifty-six
11 12026-02-1
1 Low-income housing Credit amount under
2 credit under subsection (x) subdivision thirty
3 of section two hundred ten or
4 subsection (1) of section
5 fourteen hundred fifty-six
6 Credit for transportation Amount of credit under sub-
7 improvement contributions division thirty-two of section
8 under subsection (z) two hundred ten or subsection
9 (n) of section fourteen
10 hundred fifty-six
11 IMB credit for energy Amount of credit
12 taxes under sub- under subdivision
13 section (t-1) twenty-six-a of
14 section two hundred ten
15 QEZE credit for real property Amount of credit under
16 taxes under subsection (bb) subdivision twenty-seven of
17 section two hundred ten or
18 subsection (o) of section
19 fourteen hundred fifty-six
20 QEZE tax reduction credit Amount of credit
21 under subsection (cc) benefit period factor,
22 employment increase factor and
23 zone allocation factor
24 (without regard to pro ration)
12 12026-02-1
1 under subdivision twenty-eight of
2 section two hundred ten or
3 subsection (p) of section
4 fourteen hundred fifty-six and
5 amount of tax factor as determined
6 under subdivision (f) of section
7 sixteen
8 Green building credit Amount of green building credit
9 under subsection (y) under subdivision thirty-one
10 of section two hundred ten
11 or subsection (m) of section
12 fourteen hundred fifty-six
13 § 5. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
14 of the tax law, as separately amended by section 4 of part I, section 47
15 of part Y, section 4 of part CC, sections 4 and 15 of part GG, section 5
16 of part II and section 3 of part E of chapter 63 of the laws of 2000, is
17 amended to read as follows:
18 (B) shall be treated as the owner of a new business with respect to
19 such share if the corporation qualifies as a new business pursuant to
20 paragraph (j) of subdivision twelve of section two hundred ten of this
21 chapter , unless the shareholder has previously received a refund by
22 reason of the application of this subparagraph, or this subsection as it
23 was in effect for taxable years beginning before nineteen hundred nine-
24 ty-four .
25 The corporation's
26 With respect to the credit base under
13 12026-02-1
1 following credit section two hundred ten
2 under this section: or section fourteen
3 hundred fifty-six of this
4 chapter is:
5 Investment tax credit Investment credit base
6 under subsection (a) or qualified
7 rehabilitation
8 expenditures under
9 subdivision twelve of
10 section two hundred ten
11 Empire zone Cost or other basis
12 investment tax credit under subdivision
13 under subsection (j) twelve-B
14 of section two hundred
15 ten
16 Empire zone Eligible wages under
17 wage tax credit subdivision nineteen of
18 under subsection (k) section two hundred ten
19 or subsection (e) of
20 section fourteen hundred
21 fifty-six
22 Empire zone Qualified investments
23 capital tax credit and contributions under
24 under subsection (1) subdivision twenty of
14 12026-02-1
1 section two hundred ten
2 or subsection (d) of
3 section fourteen hundred
4 fifty-six
5 Agricultural property tax Allowable school
6 credit under subsection (n) district property taxes under
7 subdivision twenty-two of
8 section two hundred ten
9 Credit for employment Qualified first-year wages or
10 of persons with dis- qualified second-year wages
11 abilities under under subdivision
12 subsection (o) twenty-three of section
13 two hundred ten
14 or subsection (f)
15 of section fourteen
16 hundred fifty-six
17 Employment incentive Applicable investment credit
18 credit under subsec- base under subdivision
19 tion (a-1) twelve-D of section two
20 hundred ten
21 Empire zone Applicable investment
22 employment credit under sub-
23 incentive credit under division twelve-C
24 subsection (j-1)
15 12026-02-1
1 Alternative fuels credit Cost under subdivision
2 under subsection (p) twenty-four of section two
3 hundred ten
4 Qualified emerging Applicable credit base
5 technology company under subdivision twelve-E
6 employment credit of section two hundred ten
7 under subsection (q)
8 Qualified emerging Qualified investments under
9 technology company subdivision twelve-F of
10 capital tax credit section two hundred ten
11 under subsection (r)
12 Credit for purchase of an Cost of an automated
13 automated external defibrillator external defibrillator under
14 under subsection (s) subdivision twenty-five of
15 section two hundred ten
16 or subsection (j) of section
17 fourteen hundred fifty-six
18 Low-income housing Credit amount under
19 credit under subsection (x) subdivision thirty
20 of section two hundred ten or
21 subsection (1) of section
22 fourteen hundred fifty-six
16 12026-02-1
1 Credit for transportation Amount of credit under sub-
2 improvement contributions division thirty-two of section
3 under subsection (z) two hundred ten or subsection
4 (n) of section fourteen
5 hundred fifty-six
6 IMB credit for energy Amount of credit
7 taxes under sub- under subdivision
8 section (t-1) twenty-six-a of
9 section two hundred ten
10 QEZE credit for real property Amount of credit under
11 taxes under subsection (bb) subdivision twenty-seven of
12 section two hundred ten or
13 subsection (o) of section
14 fourteen hundred fifty-six
15 QEZE tax reduction credit Amount of credit
16 under subsection (cc) benefit period factor,
17 employment increase factor and
18 zone allocation factor
19 (without regard to pro ration) under
20 subdivision twenty-eight of
21 section two hundred ten or
22 subsection (p) of section
23 fourteen hundred fifty-six
24 and amount of tax factor as
25 determined under subdivision (f)
17 12026-02-1
1 of section sixteen
2 Green building credit Amount of green building credit
3 under subsection (y) under subdivision thirty-one
4 of section two hundred ten
5 or subsection (m) of section
6 fourteen hundred fifty-six
7 Credit for long-term Qualified costs under
8 care insurance premiums subdivision twenty-five-a of
9 under subsection (aa) section two hundred ten
10 or subsection (k) of section
11 fourteen hundred fifty-six
12 § 6. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
13 of the tax law, as separately amended by section 4 of part I, section 4
14 of part CC, sections 4 and 15 of part GG, section 5 of part II and
15 section 3 of part E of chapter 63 of the laws of 2000, is amended to
16 read as follows:
17 (B) shall be treated as the owner of a new business with respect to
18 such share if the corporation qualifies as a new business pursuant to
19 paragraph (j) of subdivision twelve of section two hundred ten of this
20 chapter , unless the shareholder has previously received a refund by
21 reason of the application of this subparagraph, or this subsection as it
22 was in effect for taxable years beginning before nineteen hundred nine-
23 ty-four .
24 The corporation's
25 With respect to the credit base under
18 12026-02-1
1 following credit section two hundred ten
2 under this section: or section fourteen
3 hundred fifty-six of this
4 chapter is:
5 Investment tax credit Investment credit base
6 under subsection (a) or qualified
7 rehabilitation
8 expenditures under
9 subdivision twelve of
10 section two hundred ten
11 Empire zone Cost or other basis
12 investment tax credit under subdivision
13 under subsection (j) twelve-B
14 of section two hundred
15 ten
16 Empire zone Eligible wages under
17 wage tax credit subdivision nineteen of
18 under subsection (k) section two hundred ten
19 or subsection (e) of
20 section fourteen hundred
21 fifty-six
22 Empire zone Qualified investments
23 capital tax credit and contributions under
24 under subsection (1) subdivision twenty of
19 12026-02-1
1 section two hundred ten
2 or subsection (d) of
3 section fourteen hundred
4 fifty-six
5 Agricultural property tax Allowable school
6 credit under subsection (n) district property taxes under
7 subdivision twenty-two of
8 section two hundred ten
9 Credit for employment Qualified first-year wages or
10 of persons with dis- qualified second-year wages
11 abilities under under subdivision
12 subsection (o) twenty-three of section
13 two hundred ten
14 or subsection (f)
15 of section fourteen
16 hundred fifty-six
17 Employment incentive Applicable investment credit
18 credit under subsec- base under subdivision
19 tion (a-1) twelve-D
20 Empire zone Applicable investment
21 employment credit under sub-
22 incentive credit under division twelve-C
23 subsection (j-1)
20 12026-02-1
1 Alternative fuels credit Cost under subdivision
2 under subsection (p) twenty-four
3 Qualified emerging Applicable credit base
4 technology company under subdivision twelve-E
5 employment credit of section two hundred ten
6 under subsection (q)
7 Qualified emerging Qualified investments under
8 technology company subdivision twelve-F of
9 capital tax credit section two hundred ten
10 under subsection (r)
11 Credit for purchase of an Cost of an automated
12 automated external defibrillator external defibrillator under
13 under subsection (s) subdivision twenty-five of
14 section two hundred ten
15 or subsection (j) of section
16 fourteen hundred fifty-six
17 Low-income housing Credit amount under
18 credit under subsection (x) subdivision thirty
19 of section two hundred ten or
20 subsection (1) of section
21 fourteen hundred fifty-six
21 12026-02-1
1 Credit for transportation Amount of credit under sub-
2 improvement contributions division thirty-two of section
3 under subsection (z) two hundred ten or subsection
4 (n) of section fourteen
5 hundred fifty-six
6 QEZE credit for real property Amount of credit under
7 taxes under subsection (bb) subdivision twenty-seven of
8 section two hundred ten or
9 subsection (o) of section
10 fourteen hundred fifty-six
11 QEZE tax reduction credit Amount of credit
12 under subsection (cc) benefit period factor,
13 employment increase factor
14 and zone allocation factor
15 (without regard to pro ration) under
16 subdivision twenty-eight of
17 section two hundred ten or
18 subsection (p) of section
19 fourteen hundred fifty-six
20 and amount of tax factor
21 as determined under
22 subdivision (f) of
23 section sixteen
24 Green building credit Amount of green building credit
25 under subsection (y) under subdivision thirty-one
22 12026-02-1
1 of section two hundred ten
2 or subsection (m) of section
3 fourteen hundred fifty-six
4 Credit for long-term Qualified costs under
5 care insurance premiums subdivision twenty-five-a of
6 under subsection (aa) section two hundred ten
7 or subsection (k) of section
8 fourteen hundred fifty-six
9 § 7. Paragraph 5 of subsection (k) of section 606 of the tax law, as
10 amended by chapter 170 of the laws of 1994, is amended to read as
11 follows:
12 (5) If the amount of the credit and carryovers of such credit allowed
13 under this subsection for any taxable year shall exceed the taxpayer's
14 tax for such year, the excess, as well as any part of the credit or
15 carryovers of such credit, or both, which may not be deducted from the
16 tax otherwise due by reason of the final sentence in paragraph four
17 hereof, may be carried over to the following year or years and may be
18 deducted from the taxpayer's tax for such year or years. In lieu of
19 carrying over any such excess, a taxpayer who qualifies as an owner of a
20 new business for purposes of paragraph ten of subsection (a) of this
21 section may, at his option, receive fifty percent of such excess as a
22 refund. Any refund paid pursuant to this paragraph shall be deemed to be
23 a refund of an overpayment of tax as provided in section six hundred
24 eighty-six of this article, provided, however, that no interest shall be
25 paid thereon. In applying such paragraph ten, the reference to invest-
26 ment tax credit shall be deemed to be a reference to the credit provided
27 for under this subsection and the reference to "four years" shall be
23 12026-02-1
1 deemed to be a reference to the four years prior to each taxable year
2 during which the individual became eligible for such credit .
3 § 8. Paragraph 5 of subsection (q) of section 606 of the tax law, as
4 added by section 2 of part I of chapter 407 of the laws of 1999, is
5 amended to read as follows:
6 (5) If the amount of the credit and carryovers of such credit allowed
7 under this subsection for any taxable year shall exceed the taxpayer's
8 tax for such year, the excess, as well as any part of the credit or
9 carryovers of such credit, or both, may be carried over to the following
10 year or years and may be deducted from the taxpayer's tax for such year
11 or years. In lieu of carrying over any such excess, a taxpayer who (A)
12 qualifies as an owner of a new business (in the case of such qualified
13 emerging technology company) under paragraph ten of subsection (a) of
14 this section without regard to subparagraph (C) (B) of such paragraph,
15 and (B) the taxpayer has not operated such new business entity, in the
16 case of a sole proprietorship, or where such new business entity is a
17 partnership or a New York S corporation, such entity has not operated,
18 for more than six taxable years (excluding short taxable years) prior to
19 the taxable year with respect to which the taxpayer first becomes eligi-
20 ble for the credit herein provided for with respect to such company, or
21 for more than eight taxable years if such new business entity's primary
22 business or product requires federal regulatory approval or involves the
23 discovery and sale of substances requiring clinical trials as part of
24 the federal drug administration's required approval process for the use
25 of such substances by humans, may, at his or her option, receive such
26 excess as a refund. Any refund paid pursuant to this paragraph shall be
27 deemed to be a refund of an overpayment of tax as provided in section
24 12026-02-1
1 six hundred eighty-six of this article, provided, however, that no
2 interest shall be paid thereon.
3 § 9. Subparagraph (C) of paragraph 8 of subsection (i) of section 1456
4 of the tax law, as added by section 27 of part A of chapter 56 of the
5 laws of 1998, is amended to read as follows:
6 (C) has been subject to tax under this article for more than four
7 five taxable years (excluding short taxable years) prior to the taxable
8 year during which the taxpayer first becomes eligible for the investment
9 tax credit .
10 § 10. Subparagraph (C) of paragraph 7 of subdivision (q) of section
11 1511 of the tax law, as added by section 1 of part L of chapter 63 of
12 the laws of 2000, is amended to read as follows:
13 (C) has been subject to tax under this article for more than four
14 five taxable years (excluding short taxable years) prior to the taxable
15 year during which the taxpayer first becomes eligible for the investment
16 tax credit .
17 § 11. Subdivision (a) of section 969 of the general municipal law, as
18 amended by chapter 537 of the laws of 1996 and as further amended by
19 section 15 of part GG of chapter 63 of the laws of 2000, is amended to
20 read as follows:
21 (a) Except as provided in this section, any designation of an area as
22 an empire zone shall remain in effect during the period beginning on the
23 date of designation and ending July December thirty-first, two thou-
24 sand four twenty.
25 § 12. Section 14 of the tax law, as added by section 2 of part GG of
26 chapter 63 of the laws of 2000 and subdivision (b) as further amended by
27 section 15 of part GG of chapter 63 of the laws of 2000, is amended to
28 read as follows:
25 12026-02-1
1 § 14. Empire zones program. (a) Qualified empire zone enterprise. A
2 business enterprise which is certified under article eighteen-B of the
3 general municipal law prior to July first, two thousand five shall be a
4 "qualified empire zone enterprise":
5 (1) for purposes of articles nine-A, twenty-two, thirty-two and thir-
6 ty-three of this chapter, for each of the fifteen taxable years next
7 following the test year (which fifteen year period shall constitute the
8 "benefit period") within the "business tax benefit period", which peri-
9 od shall consist of (A) in the case of a business enterprise with a test
10 date occurring on or before December thirty-first, two thousand one, the
11 first fifteen taxable years beginning on or after January first, two
12 thousand one, and (B) in the case of a business enterprise with a test
13 date occurring on or after January first, two thousand two, the fifteen
14 taxable years next following the business enterprise's test year, but
15 only with respect to each of such fifteen years for which the employment
16 test is met, and
17 (2) for purposes of articles twenty-eight and twenty-nine of this
18 chapter, for each day falling within each of the ten taxable years next
19 following the test year, but only with respect to each of such ten years
20 if the taxable year immediately preceding such taxable year meets the
21 employment test during the "sales and use tax benefit period". Such
22 period shall consist of one hundred twenty months beginning on the later
23 of (A) March first, two thousand one, or (B) the first day of the month
24 next following the date of issuance of a qualified empire zone enter-
25 prise certification by the commissioner under subdivision (h) of this
26 section. Provided however, such period shall not include any month fall-
27 ing within a taxable year immediately preceded by a taxable year with
26 12026-02-1
1 respect to which the business enterprise did not meet the employment
2 test.
3 (3) for business enterprises with a test date falling within the year
4 two thousand, the term "next following the test year" shall be read as
5 "next following the taxable year following the test year".
6 (b) Employment test. (1) General. The employment test shall be met
7 with respect to a taxable year if the business enterprise's employment
8 number in empire zones with respect to which such enterprise is certi-
9 fied pursuant to article eighteen-B of the general municipal law for
10 such taxable year equals or exceeds its employment number in such zones
11 for the base period, and its employment number in the state outside of
12 such zones for such taxable year equals or exceeds its employment number
13 in the state outside of such zones for the base period. If the base
14 period is zero years and the enterprise has an employment number in such
15 zone of greater than zero with respect to a taxable year, then the
16 employment test will be met provided that the taxpayer qualifies as a
17 new business under subdivision (j) of this section.
18 (2) Change in zone boundaries or newly designated zones. Provided,
19 however, where there has been one or more revisions of the boundaries of
20 an empire zone that resulted in the inclusion of the taxpayer within
21 such zone, the employment test shall be determined with respect to a
22 taxable year as if the boundaries of the revised zone on the last day of
23 the taxable year existed during the base period. In addition, where an
24 area has been newly designated as an empire zone, the employment test
25 shall be determined with respect to a taxable year as if such newly
26 designated zone existed during the base period.
27 (3) Relocation from a business incubator facility. Where a business
28 enterprise relocates to an empire zone from a business incubator facili-
27 12026-02-1
1 ty operated by a municipality or by a public or private not-for-profit
2 entity which provides space and business support services to newly
3 established enterprises, the employment test shall be determined with
4 respect to a taxable year as if such business enterprise was located in
5 the empire zone during the base period.
6 (c) Base period. The term "base period" means the five taxable years
7 immediately preceding the test year. If the business enterprise has
8 fewer than five such years, then the term "base period" means such smal-
9 ler set of years.
10 (d) Test year. The term "test year" means the last taxable year of the
11 business enterprise ending on or before the test date. If a business
12 enterprise does not have a taxable year that ends on or before the test
13 date, such enterprise shall be deemed to have such taxable year.
14 (e) Test date. The term "test date" means the later of July first, two
15 thousand or the date prior to July first, two thousand five on which the
16 business enterprise was first certified under article eighteen-B of the
17 general municipal law.
18 (f) Taxable year. The term "taxable year" means the taxable year of
19 the business enterprise under section one hundred eighty-three, one
20 hundred eighty-four, one hundred eighty-five or one hundred eighty-six
21 of article nine, nine-a, twenty-two, thirty-two or thirty-three of this
22 chapter. If a business enterprise does not have a taxable year because
23 it is exempt from taxation or otherwise not required to file a return
24 under any of such articles, then the term "taxable year" means (i) the
25 business enterprise's federal taxable year, or (ii) if the enterprise
26 does not have a federal taxable year, calendar year.
27 (g) Employment number. The term "employment number" shall mean the
28 average number of individuals, excluding general executive officers (in
28 12026-02-1
1 the case of a corporation), employed full-time by the enterprise for at
2 least one-half of the taxable year. Such number shall be computed by
3 determining the number of such individuals employed by the taxpayer on
4 the thirty-first day of March, the thirtieth day of June, the thirtieth
5 day of September and the thirty-first day of December during the appli-
6 cable taxable year, adding together the number of such individuals
7 determined to be so employed on each of such dates and dividing the sum
8 so obtained by the number of such dates occurring within such applicable
9 taxable year. Such number shall not include individuals currently or
10 formerly employed by a related person, as such term is defined in
11 subparagraph (c) of paragraph three of subsection (b) of section four
12 hundred sixty-five of the internal revenue code, unless such related
13 person was never allowed an empire zone credit under this chapter with
14 respect to such employee.
15 (h) Sales and use tax. (1) In addition to the other requirements of
16 this section, in order for the exemptions described in subdivision (z)
17 of section eleven hundred fifteen of this chapter or any like exemptions
18 from taxes imposed pursuant to the authority of article twenty-nine of
19 this chapter to apply with respect to a qualified empire zone enter-
20 prise, such enterprise shall apply to the commissioner of taxation and
21 finance for the issuance of a qualified empire zone enterprise
22 exemption certificate certification, in the manner prescribed by such
23 commissioner. If such commissioner grants such a certificate certif-
24 ication, its use such certification shall be subject to conditions
25 specified by such commissioner. An enterprise to which the commissioner
26 issues such a certificate certification may furnish a qualified empire
27 zone enterprise exempt purchase certification certificate to a person
28 required to collect sales and compensating use taxes imposed under or
29 12026-02-1
1 pursuant to the authority of article twenty-eight or twenty-nine of this
2 chapter, which certification certificate shall be deemed to be an
3 exemption certificate under subdivision (c) of section eleven hundred
4 thirty-two of this chapter. Nothing herein or in any other law shall be
5 construed to prohibit the disclosure, in such manner as the commissioner
6 of taxation and finance deems appropriate, of the names and other appro-
7 priate identifying information of those persons holding qualified empire
8 zone enterprise certificates certifications pursuant to this subdivi-
9 sion, those persons whose qualified empire zone enterprise certif-
10 icates certifications have been revoked or those persons whose quali-
11 fied empire zone enterprise certificates certifications have expired.
12 (2) During the period that a business enterprise is eligible to apply,
13 or is qualified, for exemptions from sales and compensating use taxes
14 under this section, the commissioner of economic development shall, at
15 the time such commissioner certifies or decertifies a business enter-
16 prise under article eighteen-B of the general municipal law, notify the
17 commissioner of taxation and finance of such certification or decertif-
18 ication, which notification shall include the full legal name, address
19 and federal employer identification number of such enterprise. The
20 commissioner of economic development shall, at the time of any such
21 certification, also advise such enterprise of the requirements in para-
22 graph one of this subdivision.
23 (i) Cessation of status. A business enterprise shall cease to be a
24 qualified empire zone enterprise:
25 (1) for purposes of articles nine-A, twenty-two, thirty-two and thir-
26 ty-three of this chapter, on the first day of the taxable year during
27 which revocation of its certification under article eighteen-B of the
28 general municipal law occurs, and
30 12026-02-1
1 (2) for purposes of articles twenty-eight and twenty-nine of this
2 chapter, on the day such revocation occurs.
3 (j) New business. (1) A new business shall include any corporation,
4 except a corporation which:
5 (a) over fifty percent of the number of shares of stock entitling the
6 holders thereof to vote for the election of directors or trustees is
7 owned or controlled, either directly or indirectly, by a taxpayer
8 subject to tax under article nine-A; section one hundred eighty-three,
9 one hundred eighty-four or one hundred eighty-five of article nine;
10 article thirty-two or thirty-three of this chapter; or
11 (b) is substantially similar in operation and in ownership to a busi-
12 ness entity (or entities) taxable, or previously taxable, under section
13 one hundred eighty-three, one hundred eighty-four, one hundred eighty-
14 five or one hundred eighty-six of article nine; article nine-A, article
15 thirty-two or thirty-three of this chapter; article twenty-three of this
16 chapter or which would have been subject to tax under such article twen-
17 ty-three (as such article was in effect on January first, nineteen
18 hundred eighty) or the income (or losses) of which is (or was) includa-
19 ble under article twenty-two of this chapter; or
20 (c) has been subject to tax under section one hundred eighty-three,
21 one hundred eighty-four, one hundred eighty-five or one hundred eighty-
22 six of article nine, nine-A, thirty-two or thirty-three for more than
23 five taxable years (excluding short taxable years).
24 (2) For purposes of article twenty-two of this chapter, an individual
25 who is either a sole proprietor or a member of a partnership shall qual-
26 ify as an owner of a new business unless:
27 (a) the business of which the individual is an owner is substantially
28 similar in operation and in ownership to a business entity taxable, or
31 12026-02-1
1 previously taxable, under section one hundred eighty-three, one hundred
2 eighty-four, one hundred eighty-five or one hundred eighty-six of arti-
3 cle nine; article nine-A, thirty-two or thirty-three of this chapter;
4 article twenty-three of this chapter or which would have been subject to
5 tax under such article twenty-three (as such article was in effect on
6 January first, nineteen hundred eighty) or the income (or losses) of
7 which is (or was) includable under article twenty-two; or
8 (b) the individual has operated such new business entity in this state
9 for more than five taxable years (excluding short years of the busi-
10 ness).
11 (3) For purposes of article twenty-two of this chapter, a shareholder
12 of a New York S corporation shall be treated as the owner of a new busi-
13 ness with respect to such share if the corporation qualifies as a new
14 business pursuant to paragraph one of this subdivision.
15 § 13. Subdivisions (d) and (e) of section 15 of the tax law, as added
16 by section 2 of part GG of chapter 63 of the laws of 2000 and paragraph
17 1 of subdivision (d) and subdivision (e) as further amended by section
18 15 of part GG of chapter 63 of the laws of 2000, are amended to read as
19 follows:
20 (d) Employment increase factor. The employment increase factor is the
21 amount, not to exceed 1.0, which is the greater of:
22 (1) the excess of the taxpayer's employment number in the empire zones
23 with respect to which the taxpayer is certified pursuant to article
24 eighteen-B of the general municipal law for the taxable year, over the
25 taxpayer's test year employment number in such zones, divided by such
26 test year employment number in such zones; or
32 12026-02-1
1 (2) the excess of the taxpayer's employment number in such zones for
2 the taxable year over the taxpayer's test year employment number in such
3 zones, divided by 100.
4 (3) For purposes of paragraph one of this subdivision, where there is
5 an excess as described in such paragraph, and where the test year
6 employment number is zero, then the employment increase factor shall be
7 1.0, provided that the taxpayer qualifies as a new business under subdi-
8 vision (j) of section fourteen of this article.
9 (e) Eligible real property taxes. The term "eligible real property
10 taxes" means taxes imposed on real property which is owned by the
11 taxpayer and located in an empire zones zone with respect to which the
12 taxpayer is certified pursuant to article eighteen-B of the general
13 municipal law for the taxable year, provided such taxes are imposed at a
14 time when the taxpayer is both certified pursuant to article eighteen-B
15 of the general municipal law and a qualified empire zone enterprise.
16 § 14. Subdivision (f) of section 15 of the tax law is relettered
17 subdivision (g) and a new subdivision (f) is added to read as follows:
18 (f) Credit recapture. Where a taxpayer's eligible real property taxes
19 which were the basis for the allowance of the credit provided for under
20 this section are subsequently reduced as a result of a final order in
21 any proceeding under article seven of the real property tax law or other
22 provision of law, the taxpayer shall add back, in the taxable year in
23 which such final order is issued, the excess of (i) the amount of credit
24 originally allowed for a taxable year over (ii) the amount of credit
25 determined based upon the reduced eligible real property taxes. If such
26 final order reduces real property taxes for more than one year, the
27 taxpayer must determine how much of such reduction is attributable to
28 each year covered by such final order and calculate the amount of credit
33 12026-02-1
1 which is required by this subdivision to be recaptured for each year
2 based on such reduction.
3 § 15. Subdivisions (b), (e) and (f) of section 16 of the tax law, as
4 added by section 2 of part GG of chapter 63 of the laws of 2000 and
5 subdivision (e) as further amended by section 15 of part GG of chapter
6 63 of the laws of 2000, are amended to read as follows:
7 (b) Amount of credit. The amount of the credit shall be the product
8 (or pro rata share of the product, in the case of a member of a part-
9 nership) of (i) the benefit period factor, (ii) the employment increase
10 factor, (iii) the zone allocation factor and (iv) the tax factor.
11 (e) Zone allocation factor. The zone allocation factor shall be the
12 percentage representing the taxpayer's economic presence in empire zones
13 with respect to which the taxpayer is certified under article eighteen-B
14 of the general municipal law. This percentage shall be computed pursu-
15 ant to the method prescribed in subdivision two of section two hundred
16 nine-B of this chapter (without regard to paragraph (b) of such subdivi-
17 sion), except that references therein to the metropolitan commuter
18 transportation district shall be deemed to be references to the areas of
19 this state constituting such empire zones. as follows:
20 (1) ascertaining the percentage which the average value of the taxpay-
21 er's real and tangible personal property, whether owned or rented to it,
22 in empire zones with respect to which the taxpayer is certified under
23 article eighteen-B of the general municipal law during the period
24 covered by its report or return bears to the average value of the
25 taxpayer's real and tangible personal property, whether owned or rented
26 to it, within the state during such period; provided that the term
27 "value of the taxpayer's real and tangible personal property" shall have
34 12026-02-1
1 the same meaning as such term has in subparagraph one of paragraph (a)
2 of subdivision three of section two hundred ten of this chapter; and
3 (2) ascertaining the percentage of the total wages, salaries and other
4 personal service compensation, similarly computed, during such period of
5 employees of the taxpayer in empire zones with respect to which the
6 taxpayer is certified under article eighteen-B of the general municipal
7 law, except general executive officers, to the total wages, salaries and
8 other personal service compensation, similarly computed, during such
9 period, of all the taxpayer's employees within the state, except general
10 executive officers; and
11 (3) adding together the percentages so determined and dividing the
12 result by the number of percentages.
13 For purposes of article twenty-two of this chapter, references in
14 section two hundred nine-B of this chapter in this subdivision to prop-
15 erty, wages, salaries and other personal service compensation shall be
16 deemed to be references to such items connected with the conduct of a
17 business.
18 (f) Tax factor. (1) General. The tax factor shall be, in the case of
19 article nine-A of this chapter, the larger of the amounts of tax deter-
20 mined for the taxable year under paragraphs (a) and (c) of subdivision
21 one of section two hundred ten of such article. The tax factor shall be,
22 in the case of article twenty-two of this chapter, the tax determined
23 for the taxable year under subsections (a) through (d) of section six
24 hundred one of such article. The tax factor shall be, in the case of
25 article thirty-two of this chapter, the larger of the amounts of tax
26 determined for the taxable year under subsection (a) and paragraph two
27 of subsection (b) of section fourteen hundred fifty-five of such arti-
28 cle. The tax factor shall be, in the case of article thirty-three of
35 12026-02-1
1 this chapter, the larger of the amounts of tax determined for the taxa-
2 ble year under paragraphs one and three of subdivision (a) of section
3 fifteen hundred two of such article.
4 (2) Sole proprietors, partners and S corporation shareholders. (A)
5 Where the taxpayer is a sole proprietor of a qualified empire zone
6 enterprise, the taxpayer's tax factor shall be that portion of the
7 amount determined in paragraph one of this subdivision which is attrib-
8 utable to the income of the qualified empire zone enterprise. Such
9 attribution shall be made in accordance with the ratio of the taxpayer's
10 income from the qualified empire zone enterprise allocated within the
11 state, entering into New York adjusted gross income, to the taxpayer's
12 New York adjusted gross income, or in accordance with such other methods
13 as the commissioner may prescribe by rule or regulation as providing an
14 apportionment which reasonably reflects the portion of the taxpayer's
15 tax attributable to the income of the qualified empire zone enterprise.
16 (B)(i) Where the taxpayer is a member of a partnership which is a
17 qualified empire zone enterprise, the taxpayer's tax factor shall be
18 that portion of the amount determined in paragraph one of this subdivi-
19 sion which is attributable to the income of the partnership. Such attri-
20 bution shall be made in accordance with the ratio of the partner's
21 income from the partnership allocated within the state to the partner's
22 entire income, or in accordance with such other methods as the commis-
23 sioner may prescribe by rule or regulation as providing an apportionment
24 which reasonably reflects the portion of the partner's tax attributable
25 to the income of the partnership. In no event may the ratio so deter-
26 mined exceed 1.0.
27 (ii) For purposes of article nine-A, thirty-two or thirty-three of
28 this chapter, the term "partner's income from the partnership" means
36 12026-02-1
1 partnership items of income, gain, loss and deduction, and New York
2 modifications thereto, entering into entire net income, minimum taxable
3 income, alternative entire net income or entire net income plus compen-
4 sation and the term "partner's entire income" means entire net income,
5 minimum taxable income, alternative entire net income or entire net
6 income plus compensation, allocated within the state. For purposes of
7 article twenty-two of this chapter, the term "partner's income from the
8 partnership" means partnership items of income, gain, loss and
9 deduction, and New York modifications thereto, entering into New York
10 adjusted gross income, and the term "partner's entire income" means New
11 York adjusted gross income. In no event may the ratio so determined
12 exceed 1.0.
13 (C) Where the taxpayer is a shareholder of a New York S corporation
14 which is a qualified empire zone enterprise, the shareholder's tax
15 factor shall be that portion of the amount determined in paragraph one
16 of this subdivision which is attributable to the income of the S corpo-
17 ration. Such attribution shall be made in accordance with the ratio of
18 the shareholder's income from the S corporation allocated within the
19 state, entering into New York adjusted gross income, to the sharehold-
20 er's New York adjusted gross income, or in accordance with such other
21 methods as the commissioner may prescribe by rule or regulation as
22 providing an apportionment which reasonably reflects the portion of the
23 shareholder's tax attributable to the income of the qualified empire
24 zone enterprise.
25 (3) Combined returns or reports. (A) Where the taxpayer is a qualified
26 empire zone enterprise and is required or permitted to make a return or
27 report on a combined basis under articles nine-A, thirty-two or thirty-
28 three of this chapter, the taxpayer's tax factor shall be the amount
37 12026-02-1
1 determined in paragraph one of this subdivision which is attributable to
2 the income of the qualified empire zone enterprise. Such attribution
3 shall be made in accordance with the ratio of the qualified empire zone
4 enterprise's income allocated within the state to the combined group's
5 income, or in accordance with such other methods as the commissioner may
6 prescribe by rule or regulation as providing an apportionment which
7 reasonably reflects the portion of the qualified empire zone enter-
8 prise's tax attributable to the income of the combined group. In no
9 event may the ratio so determined exceed 1.0.
10 (B) The term "income of the qualified empire zone enterprise" means
11 entire net income, minimum taxable income, alternative entire net income
12 or entire net income plus compensation calculated as if the taxpayer was
13 filing separately and the term "combined group's income" means entire
14 net income, minimum taxable income, alternative entire net income or
15 entire net income plus compensation as shown on the combined return or
16 report, allocated within the state.
17 (4) If the amount determined in paragraph one of this subdivision is
18 less than zero, a taxpayer shall not be allowed a credit under this
19 section.
20 § 16. Section 1105-C of the tax law is amended by adding a new subdi-
21 vision (d) to read as follows:
22 (d) For the purpose of the reduced rate of tax provided by subdivision
23 (a) of this section, the following shall apply to a sale, other than a
24 sale for resale, of the transportation, transmission or distribution of
25 gas or electricity by a vendor not subject to the supervision of the
26 public service commission where such transportation, transmission or
27 distribution service being sold is wholly within a service area of the
28 state wherein the public service commission shall have approved by
38 12026-02-1
1 formal order a single retailer model for the regulated utility which has
2 the responsibility to serve that area. Where such a vendor makes a sale,
3 other than a sale for resale, of gas or electricity to be delivered to a
4 customer within such service area and, for the purpose of transporting,
5 transmitting or distributing such gas or electricity, also makes a sale
6 of transportation, transmission or distribution service to such custom-
7 er, the charge for the transportation, transmission or distribution of
8 gas or electricity wholly within such service area made by such vendor,
9 notwithstanding paragraph three of subdivision (b) of section eleven
10 hundred one of this article, shall not be included in the receipt for
11 such gas or electricity, and, therefore, shall qualify for such reduced
12 rate.
13 § 17. Paragraph (iii) of subdivision (a) of section 958 of the general
14 municipal law, as amended by chapter 708 of the laws of 1993 and as
15 further amended by section 15 of part GG of chapter 63 of the laws of
16 2000, is amended to read as follows:
17 (iii) the area proposed as an empire zone shall not exceed:
18 two square miles for any zone, except as provided for in paragraph (d)
19 of section nine hundred sixty-nine of this article, such area shall be
20 defined by one or more borders, which borders shall be determined by the
21 applicant and need not be entirely coterminous with the borders of
22 census tracts or block numbering areas provided, however, that such zone
23 shall be located entirely within traditional neighborhood or community
24 boundaries, and where appropriate, be bounded by major natural or man-
25 made physical boundaries, such as bodies of water, railroad lines, or
26 limited access highways;
27 § 18. Subdivision (d) of section 969 of the general municipal law, as
28 amended by chapter 606 of the laws of 1988 and as further amended by
39 12026-02-1
1 section 15 of part GG of chapter 63 of the laws of 2000, is amended to
2 read as follows:
3 (d) Notwithstanding the provisions of subdivision (c) of this section,
4 the governing body of a city, county, town or village may, by resol-
5 ution, submit to the commissioner a request to revise the boundaries of
6 an existing empire zone for the purpose of expanding such zone over two
7 square miles. The commissioner may, after consultation with the commis-
8 sioner of labor, approve such revision subject to the following
9 provisions:
10 (1) The area is located outside the metropolitan commuter transporta-
11 tion district.
12 (2) The per capita personal income of the county in which the zone is
13 located is ninety-five percent or less of the state average, according
14 to the U.S. Bureau of Economic Analysis county per capita personal
15 income data for nineteen hundred ninety-eight, and the county population
16 decreased two percent or more between nineteen hundred ninety and nine-
17 teen hundred ninety-nine, according to U.S. Bureau of the Census data;
18 or the per capita personal income of the county in which the zone is
19 located is ninety-five percent or less of the state average, according
20 to the U.S. Bureau of Economic Analysis county per capita personal
21 income data for nineteen hundred ninety-eight, and the average annual
22 unemployment rate in the largest city within the county is one hundred
23 thirty percent or more of the state average, according to state depart-
24 ment of labor data for calendar year nineteen hundred ninety-nine, and
25 the county population decreased between nineteen hundred ninety and
26 nineteen hundred ninety-nine, according to U.S. Bureau of the Census
27 data.
40 12026-02-1
1 (3) The area proposed as an empire zone shall not exceed four square
2 miles.
3 (4) The commissioner may not approve revision of the borders of an
4 empire zone if such revision would have the effect of producing an
5 empire zone which does not satisfy the criteria for empire zone desig-
6 nation established by or pursuant to section nine hundred fifty-eight of
7 this article.
8 (5) The commissioner may grant approval of a revision of the borders
9 of an empire zone without prior public notice and without a prior public
10 hearing if such revision adds territory to an existing empire zone, but
11 does not remove territory from such zone.
12 (6) The commissioner may grant approval of a revision of the borders
13 of an empire zone after public notice of such proposed revision and a
14 public hearing at least thirty days prior to the effective date of such
15 revision, if such revision removes territory from an existing empire
16 zone.
17 (7) The revisions of the borders of an empire zone shall have no
18 effect on the duration of the designation of such empire zone as
19 provided by subdivision (a) of this section.
20 (e) Upon the termination or revision of the borders of an empire zone
21 as provided in this section, the commissioner shall file notice of such
22 action as required by section nine hundred fifty-nine of this article.
23 § 19. This act shall take effect immediately; provided that:
24 a. Sections one through eleven, fourteen and fifteen of this act shall
25 apply to taxable years beginning on and after January 1, 2001.
26 b. Section five of this act shall take effect on the same date as
27 section 3 of part E of chapter 63 of the laws of 2000 takes effect.
41 12026-02-1
1 c. Section six of this act shall take effect on the same date as the
2 repeal of section 47 of part Y of chapter 63 of the laws of 2000 takes
3 effect.
4 d. Sections twelve and thirteen of this act shall apply to taxable
5 years beginning on and after January 1, 2001; provided, however, that
6 the amendments made by sections twelve and thirteen which define the
7 term "new business" in subdivision (j) of section fourteen of the tax
8 law and reference such definition shall take effect July 1, 2004 and
9 apply to taxable years beginning on or after July 1, 2004, but shall not
10 apply to any taxpayer which was a qualified empire zone enterprise for a
11 taxable year beginning prior to July 1, 2004.
12 e. Section sixteen of this act shall be deemed to have been in full
13 force and effect on and after June 1, 2000 and shall apply to sales
14 made, services rendered and uses occurring on and after such date
15 although made, rendered or occurring under a prior contract. Where
16 service is purchased or sold on a monthly, quarterly or other basis, and
17 the bills for such service are based on meter readings, the amount
18 received on each bill for such service for a month or other term shall
19 be a receipt or consideration subject to tax, but such taxes shall be
20 applicable to all bills based on meters read on and after June 1, 2000,
21 only where more than one-half of the number of days included in the
22 month or other period billed are days subsequent to May 31, 2000.
23 PART B
24 Section 1. Paragraph (a) of subdivision 3 of section 210 of the tax
25 law is amended by adding a new subparagraph 10 to read as follows:
42 12026-02-1
1 (10) (A) Notwithstanding the foregoing provisions of this paragraph,
2 the business allocation percentage of a manufacturer shall be computed
3 in the manner set forth in this subparagraph.
4 (i) For taxable years beginning on or after January first, two thou-
5 sand one and before January first, two thousand three, the business
6 allocation percentage of a manufacturer shall be determined by adding
7 together the following percentages and dividing the result by the number
8 of percentages:
9 (I) the product of twenty percent and the percentage determined under
10 subparagraph one of this paragraph,
11 (II) the product of sixty percent and the percentage determined under
12 subparagraph two of this paragraph, and
13 (III) the product of twenty percent and the percentage determined
14 under subparagraph three of this paragraph.
15 (ii) For taxable years beginning on or after January first, two thou-
16 sand three and before January first, two thousand four, the business
17 allocation percentage of a manufacturer shall be determined by adding
18 together the following percentages and dividing the result by the number
19 of percentages:
20 (I) the product of ten percent and the percentage determined under
21 subparagraph one of this paragraph,
22 (II) the product of eighty percent and the percentage determined under
23 subparagraph two of this paragraph, and
24 (III) the product of ten percent and the percentage determined under
25 subparagraph three of this paragraph.
26 (iii) For taxable years beginning on or after January first, two thou-
27 sand four and before January first, two thousand five, the business
28 allocation percentage of a manufacturer shall be determined by adding
43 12026-02-1
1 together the following percentages and dividing the result by the number
2 of percentages:
3 (I) the product of five percent and the percentage determined under
4 subparagraph one of this paragraph,
5 (II) the product of ninety percent and the percentage determined under
6 subparagraph two of this paragraph, and
7 (III) the product of five percent and the percentage determined under
8 subparagraph three of this paragraph.
9 (iv) For taxable years beginning on or after January first, two thou-
10 sand five, the business allocation percentage of a manufacturer shall be
11 the percentage provided for in subparagraph two of this paragraph.
12 (B) The term "manufacturer" shall mean a taxpayer which during the
13 taxable year is principally engaged in activities described in clause
14 (A) or (C), or any combination thereof, of subparagraph (i) of paragraph
15 (b) of subdivision twelve of this section. Moreover, for purposes of
16 computing a business allocation percentage in a combined report, the
17 entire combined group shall be considered a "manufacturer" for purposes
18 of this subparagraph if the combined group during the taxable year is
19 principally engaged in activities described in clause (A) or (C), or any
20 combination thereof, of subparagraph (i) of paragraph (b) of subdivision
21 twelve of this section. A taxpayer or a combined group shall be "princi-
22 pally engaged" in activities described in clause (A) or (C) of subpara-
23 graph (i) of paragraph (b) of subdivision twelve of this section if,
24 during the taxable year, more than fifty percent of the taxpayer's or
25 combined group's gross receipts are derived from such activities. In
26 computing a combined group's gross receipts, intercorporate receipts
27 shall be eliminated.
44 12026-02-1
1 § 2. Paragraph (a) of subdivision 3-a of section 210 of the tax law,
2 as amended by chapter 170 of the laws of 1994, is amended to read as
3 follows:
4 (a) Multiply its alternative business income by an alternative busi-
5 ness allocation percentage determined pursuant to the method prescribed
6 in subdivision three of this section except that for taxable years
7 beginning before nineteen hundred ninety-four the additional percentage
8 (referred to in subparagraph four of paragraph (a) of such subdivision)
9 equal to the percentage determined under subparagraph two of paragraph
10 (a) of such subdivision shall be disregarded and not added together with
11 the other percentages, and except that the percentages employed in such
12 subdivision three shall be modified to reflect the factors utilized in
13 computing minimum taxable income, provided, however, that a taxpayer
14 principally engaged in the conduct of aviation (other than air freight
15 forwarders acting as principal and like indirect air carriers) shall
16 determine its alternative business allocation percentage pursuant to the
17 method prescribed in subparagraph seven of paragraph (a) of subdivision
18 three of this section, provided further, however, that a taxpayer which
19 is a manufacturer, as defined in clause (B) of subparagraph ten of para-
20 graph (a) of subdivision three of this section, shall determine its
21 alternative business allocation percentage pursuant to the method
22 prescribed in clause (A) of such subparagraph ten.
23 § 3. Section 209-B of the tax law is amended by adding a new subdivi-
24 sion 2-c to read as follows:
25 2-c. A taxpayer which is a manufacturer as defined in clause (B) of
26 subparagraph ten of paragraph (a) of subdivision three of section two
27 hundred ten of this article shall, notwithstanding the provisions of
28 subdivision two of this section, determine the percentage of its busi-
45 12026-02-1
1 ness activity carried on within the metropolitan commuter transportation
2 district in the manner set forth in this subdivision.
3 (a) For taxable years beginning on or after January first, two thou-
4 sand one and before January first, two thousand three, the percentage of
5 a manufacturer's business activity carried on within the metropolitan
6 commuter transportation district shall be determined by adding together
7 the following percentages and dividing the result by the number of
8 percentages:
9 (i) the product of twenty percent and the percentage determined under
10 paragraph (a) of subdivision two of this section,
11 (ii) the product of sixty percent and the percentage determined under
12 paragraph (b) of subdivision two of this section, and
13 (iii) the product of twenty percent and the percentage determined
14 under paragraph (c) of subdivision two of this section.
15 (b) For taxable years beginning on or after January first, two thou-
16 sand three and before January first, two thousand four, the percentage
17 of a manufacturer's business activity carried on within the metropolitan
18 commuter transportation district shall be determined by adding together
19 the following percentages and dividing the result by the number of
20 percentages:
21 (i) the product of ten percent and the percentage determined under
22 paragraph (a) of subdivision two of this section,
23 (ii) the product of eighty percent and the percentage determined under
24 paragraph (b) of subdivision two of this section, and
25 (iii) the product of ten percent and the percentage determined under
26 paragraph (c) of subdivision two of this section.
27 (c) For taxable years beginning on or after January first, two thou-
28 sand four and before January first, two thousand five, the percentage of
46 12026-02-1
1 a manufacturer's business activity carried on within the metropolitan
2 commuter transportation district shall be determined by adding together
3 the following percentages and dividing the result by the number of
4 percentages:
5 (i) the product of five percent and the percentage determined under
6 paragraph (a) of subdivision two of this section,
7 (ii) the product of ninety percent and the percentage determined under
8 paragraph (b) of subdivision two of this section, and
9 (iii) the product of five percent and the percentage determined under
10 paragraph (c) of subdivision two of this section.
11 (d) For taxable years beginning on or after January first, two thou-
12 sand five, the percentage of a manufacturer's business activity carried
13 on within the metropolitan commuter transportation district shall be the
14 percentage provided for in paragraph (b) of subdivision two of this
15 section.
16 § 4. Subparagraph (ii) of paragraph (c) of subdivision 1 of section
17 210 of the tax law, as amended by section 1 of part L of chapter 407 of
18 the laws of 1999, is amended to read as follows:
19 (ii) For taxable years beginning in nineteen hundred ninety, nineteen
20 hundred ninety-one, nineteen hundred ninety-two, nineteen hundred nine-
21 ty-three and nineteen hundred ninety-four the amount prescribed by this
22 paragraph shall be computed at the rate of five percent of the taxpay-
23 er's minimum taxable income base. For taxable years beginning after
24 nineteen hundred ninety-four and before July first, nineteen hundred
25 ninety-eight, the amount prescribed by this paragraph shall be computed
26 at the rate of three and one-half percent of the taxpayer's minimum
27 taxable income base. For taxable years beginning after June thirtieth,
28 nineteen hundred ninety-eight and before July first, nineteen hundred
47 12026-02-1
1 ninety-nine, the amount prescribed by this paragraph shall be computed
2 at the rate of three and one-quarter percent of the taxpayer's minimum
3 taxable income base. For taxable years beginning after June thirtieth,
4 nineteen hundred ninety-nine and before July first, two thousand, the
5 amount prescribed by this paragraph shall be computed at the rate of
6 three percent of the taxpayer's minimum taxable income base. For taxa-
7 ble years beginning after June thirtieth, two thousand, the amount
8 prescribed by this paragraph shall be computed at the rate of two and
9 one-half percent of the taxpayer's minimum taxable income base. For
10 taxable years beginning on or after January first, two thousand one and
11 before January first, two thousand three, the amount prescribed by this
12 paragraph shall be computed at the rate of two percent of the taxpayer's
13 minimum taxable base. For taxable years beginning on or after January
14 first, two thousand three and before January first, two thousand four,
15 the amount prescribed by this paragraph shall be computed at the rate of
16 one percent of the taxpayer's minimum taxable base. For taxable years
17 beginning on or after January first, two thousand four and before Janu-
18 ary first, two thousand five, the amount prescribed by this paragraph
19 shall be computed at the rate of one-half percent of the taxpayer's
20 minimum taxable base. For taxable years beginning on or after January
21 first, two thousand five, the amount prescribed by this paragraph shall
22 be computed at the rate of zero percent of the taxpayer's minimum taxa-
23 ble base. The "taxpayer's minimum taxable income base" shall mean the
24 portion of the taxpayer's minimum taxable income allocated within the
25 state as hereinafter provided, subject to any modifications required by
26 paragraphs (d) and (e) of subdivision three of this section.
27 § 5. This act shall take effect immediately.
48 12026-02-1
1 PART C
2 Section 1. Legislative intent. The legislature hereby finds, deter-
3 mines and declares that the New York agriculture industry has a substan-
4 tial impact on the overall economic health and well-being of the state.
5 The state constitution provides that the policy of the state shall be to
6 encourage the development and improvement of its agricultural lands for
7 the production of food and other agricultural products. The activities
8 of farmers and the existence of quality farmland provide many environ-
9 mental benefits to society, such as open space, scenic vistas, wetlands
10 that aid in water purification, plants that purify air, and food, water
11 and habitat for people, domestic animals and wildlife. Farmers preserve
12 these benefits by employing management practices such as integrated pest
13 management strategies, no-till planting, strip cropping and crop
14 rotations, wind breaks, soil testing, and effective barnyard management.
15 Properly managed farmland has also been demonstrated to be a preferred
16 environmental use of land for watershed protection. Therefore, it is in
17 the public interest to encourage the maintenance of existing farmland
18 and the restoration of agricultural lands for farming purposes, thereby
19 helping to ensure the continued economic viability of farm operations.
20 § 2. The subdivision heading and paragraphs (a), (b), (c), (d), (e)
21 and (h) of subdivision 22 of section 210 of the tax law, the subdivision
22 heading and paragraphs (c), (e) and (h) as added by chapter 309 of the
23 laws of 1996, paragraphs (a) and (b) as amended by chapter 315 of the
24 laws of 1998, paragraph (d) and subparagraph 2 of paragraph (e) as
25 amended by section 1 of part N of chapter 407 of the laws of 1999, are
26 amended to read as follows:
49 12026-02-1
1 Agricultural property tax credit credits. (a) General. (1) Farmers'
2 credit. In the case of a taxpayer which that is an eligible farmer or
3 an eligible farmer who has paid taxes pursuant to a land contract and
4 that owns qualified agricultural property, there shall be allowed a
5 credit for the allowable school district property taxes on such
6 property.
7 (2) Agricultural assessment credit. In the case of a taxpayer that
8 owns agricultural assessment property which is leased to another person,
9 there shall be allowed a credit for the allowable school district prop-
10 erty taxes on such property.
11 (3) A taxpayer shall claim only one of the credits provided under
12 subparagraph one or subparagraph two of this paragraph for the taxable
13 year.
14 (4) The term "allowable school district property taxes" means the
15 school district property taxes paid during the taxable year on quali-
16 fied agricultural property , subject to the acreage limitation provided
17 in paragraph (e) of this subdivision and the income limitation provided
18 in paragraph (f) of this subdivision.
19 (5) For purposes of this subdivision, a land contract owner of proper-
20 ty shall be deemed to be the owner of such property. The term "land
21 contract owner" means a person other than the owner of record of land
22 who has paid the school district property taxes on such land pursuant to
23 a contract for the future purchase of such land.
24 (b) Eligible farmer. For purposes of this subdivision, the term
25 "eligible farmer" means a taxpayer whose federal gross income from farm-
26 ing for the taxable year is at least two-thirds of excess federal gross
27 income. The term "eligible farmer" shall also include an individual
28 other than the taxpayer of record for qualified agricultural land who
50 12026-02-1
1 has paid the school district property taxes on such land pursuant to a
2 contract for the future purchase of such land provided such individual
3 has a federal gross income from farming for the taxable year which is at
4 least two-thirds of excess federal gross income. Excess federal gross
5 income means the amount of federal gross income from all sources for the
6 taxable year in excess of thirty thousand dollars.
7 (c) School district property taxes. For purposes of this subdivision,
8 the term "school district property taxes" means all property taxes,
9 special ad valorem levies and special assessments, exclusive of penal-
10 ties and interest, levied for school district purposes on the qualified
11 agricultural property owned by the taxpayer.
12 (d) Qualified property, qualified agricultural property . For purposes
13 of this subdivision, the , agricultural assessment property. (1) The
14 term qualified property means qualified agricultural property or agri-
15 cultural assessment property.
16 (2) The term "qualified agricultural property" means land located in
17 this state which is used in agricultural production, and land improve-
18 ments, structures and buildings (excluding buildings used for the
19 taxpayer's residential purpose) located on such land which are used or
20 occupied to carry out such production. Qualified agricultural property
21 also includes land set aside or retired under a federal supply manage-
22 ment or soil conservation program.
23 (3) The term "agricultural assessment property" means land which
24 receives or is eligible to receive an agricultural assessment for the
25 taxable year pursuant to section three hundred five or three hundred six
26 of the agriculture and markets law, and land improvements, structures
27 and buildings (excluding buildings used for the taxpayer's residential
51 12026-02-1
1 purpose) located on such land which are used or occupied to carry out
2 agricultural production.
3 (e) Acreage limitation. (1) Eligible taxes. In the event that the
4 qualified agricultural property owned by the taxpayer includes land in
5 excess of the base acreage as provided in this paragraph, the amount of
6 school district property taxes eligible for credit under this subdivi-
7 sion shall be that portion of the school district property taxes which
8 bears the same ratio to the total school district property taxes paid
9 during the taxable year, as the acreage allowable under this paragraph
10 bears to the entire acreage of such land.
11 (2) Allowable acreage. The allowable acreage is the sum of the base
12 acreage set forth below and fifty percent of the incremental acreage.
13 The incremental acreage is the excess of the entire acreage of qualified
14 agricultural land owned by the taxpayer over the base acreage. Except
15 as provided in subparagraph three of this paragraph:
16 For taxable years beginning: The base acreage is:
17 in 1997 100
18 after 1997 250
19 For taxable years beginning after two thousand, the total base acreage
20 may be increased by any acreage enrolled or participating during the
21 taxable year in a federal environmental conservation acreage reserve
22 program pursuant to title three of the federal agriculture improvement
23 and reform act of nineteen hundred ninety-six.
24 (3) Base acreage of related persons. Where the taxpayer and one or
25 more related persons each own qualified agricultural property on the
26 first day of March of any year, the base acreage under subparagraph two
52 12026-02-1
1 of this paragraph shall be divided equally and allotted among the
2 taxpayer and such related persons, and the taxpayer's base acreage for
3 the taxable year which includes such March first shall be limited to its
4 allotted share. Provided, however, if the taxpayer and all such related
5 persons consent (at such time and in such manner as the commissioner may
6 prescribe) to an unequal division, the taxpayer's base acreage for such
7 taxable year shall be limited to its allotted share under such unequal
8 division.
9 (4) Related persons. (A) For purposes of subparagraph three of this
10 paragraph, the term "related person" means:
11 (i) a corporation subject to tax under this article, where the taxpay-
12 er and the corporation are members of the same controlled group, as
13 defined in section 267(f) of the internal revenue code;
14 (ii) an individual, partnership, estate or trust, where more than
15 fifty percent in value of the outstanding stock of the taxpayer is
16 owned, directly or indirectly, by or for such individual, partnership,
17 estate or trust or by or for the grantor of such trust;
18 (iii) a corporation subject to tax under this article, or a partner-
19 ship, estate or trust, if the same person owns more than fifty percent
20 in value of the outstanding stock of the taxpayer and more than fifty
21 percent in value of the outstanding stock of the corporation, or more
22 than fifty percent of the capital or profits interest in the partner-
23 ship, or more than fifty percent of the beneficial interest in the
24 estate or trust;
25 (iv) a partnership, estate or trust of which the taxpayer owns,
26 directly or indirectly, more than fifty percent of the capital, profits
27 or beneficial interest.
53 12026-02-1
1 (B) In determining whether a person is a related person within the
2 meaning of this subparagraph:
3 (i) stock owned, directly or indirectly, by or for a corporation,
4 partnership, estate or trust shall be considered as being owned propor-
5 tionately by or for its shareholders, partners or beneficiaries;
6 (ii) an individual shall be considered as owning the stock owned,
7 directly or indirectly, by or for his spouse;
8 (iii) stock constructively owned by a person by reason of the applica-
9 tion of item (i) of this clause shall, for the purpose of applying item
10 (i) or (ii) of this clause, be treated as actually owned by such person.
11 (h) Nonqualified use. (1) No credit in conversion year. In the event
12 that qualified agricultural property is converted by the taxpayer to
13 nonqualified use, credit under this subdivision shall not be allowed
14 with respect to such property for the taxable year of conversion (the
15 conversion year).
16 (2) Credit recapture. If the conversion by the taxpayer of quali-
17 fied agricultural property to nonqualified use occurs during the peri-
18 od of the two taxable years following the taxable year for which the
19 credit under this subdivision was first claimed with respect to such
20 property, the credit allowed with respect to such property for the taxa-
21 ble years prior to the conversion year must be added back in the conver-
22 sion year. Where the property converted includes land, and where the
23 conversion is of only a portion of such land, the credit allowed with
24 respect to the property converted shall be determined by multiplying the
25 entire credit under this subdivision for the taxable years prior to the
26 conversion year by a fraction, the numerator of which is the acreage
27 converted and the denominator of which is the entire acreage of such
28 land owned by the taxpayer immediately prior to the conversion.
54 12026-02-1
1 (3) Exception to recapture. Subparagraph two of this paragraph shall
2 not apply to the conversion of property where the conversion is by
3 reason of involuntary conversion, within the meaning of section one
4 thousand thirty-three of the internal revenue code.
5 (4) Conversion to nonqualified use. For purposes of this paragraph, a
6 sale or other disposition of qualified agricultural property alone
7 shall not constitute a conversion to a nonqualified use. In the case of
8 agricultural assessment property, conversion to nonqualified use shall
9 mean that such property is converted to a use which would disqualify
10 such property for an agricultural assessment under section three hundred
11 five or three hundred six of the agriculture and markets law.
12 § 3. Section 210 of the tax law is amended by adding a new subdivi-
13 sion 35 to read as follows:
14 35. Credit for soil improvement projects or farmland improvement
15 projects. (a) A taxpayer shall be allowed a credit, to be computed as
16 hereinafter provided, against the tax imposed by this article. The
17 amount of the credit shall be twenty-five percent of the taxpayer's
18 eligible expenditures with respect to a soil improvement project for
19 land located in New York state which meets the criteria set forth in
20 paragraph (b) of this subdivision or a farmland improvement project for
21 land located in New York state which meets the criteria set forth in
22 paragraph (c) of this subdivision. Such credit shall be allowed for the
23 taxable year in which either the soil improvement project or the farm-
24 land improvement project, whichever is applicable, is completed. A
25 taxpayer may be allowed both a credit for a soil improvement project and
26 a farmland improvement project in the same taxable year. However, once a
27 taxpayer has been allowed a credit under this subdivision with respect
28 to a soil improvement project, such taxpayer shall not be allowed a
55 12026-02-1
1 credit under this subdivision for a soil improvement project in subse-
2 quent taxable years, and once a taxpayer has been allowed a credit under
3 this subdivision with respect to a farmland improvement project, such
4 taxpayer shall not be allowed a credit under this subdivision for a
5 farmland improvement project in subsequent taxable years.
6 (b) Under this subdivision, a soil improvement project must meet the
7 following criteria:
8 (i) Such soil improvement project must consist of activities which
9 will restore land for agricultural production purposes by improving the
10 soil resources of land, consistent with "best management practices" as
11 defined in subdivision four of section one hundred fifty of the agricul-
12 ture and markets law, which has not been used in agricultural production
13 for at least two years prior to the implementation of the project.
14 (ii) Rented land which is the subject of the soil improvement project
15 must be leased pursuant to a written agreement having a term of at least
16 five years, commencing either in the year the soil improvement project
17 is implemented or in the year the soil improvement project is completed.
18 (c) Under this subdivision, a farmland improvement project must meet
19 the following criteria:
20 (i) The farmland improvement project must consist of activities relat-
21 ing to the construction of fencing, the installation of fencing, the
22 repair of fencing or the repair of silos, or any combination of these
23 activities on farmland, consistent with "best management practices" as
24 defined in subdivision four of section one hundred fifty of the agricul-
25 ture and markets law.
26 (ii) For purposes of this paragraph, farmland means any land which
27 receives or is eligible to receive an agricultural assessment pursuant
56 12026-02-1
1 to section three hundred five or three hundred six of the agriculture
2 and markets law for the taxable year.
3 (d)(i) Eligible expenditures for a soil improvement project for which
4 a tax credit may be allowed under this subdivision are: (A) fees for
5 architectural, archeological, geological and engineering services
6 related to the implementation and completion of the soil improvement
7 project, (B) the cost of developing plans and specifications for the
8 soil improvement project, (C) fees for consultant and legal services
9 related to the implementation and completion of the soil improvement
10 project, and (D) direct expenses related to the implementation and
11 completion of the soil improvement project.
12 (ii) Direct expenses related to the implementation and completion of
13 the soil improvement project are (A) the expenditures listed in para-
14 graph one of subsection (c) of section 175 of the internal revenue code,
15 (B) expenditures related to the application of lime on the land which is
16 the subject of the soil improvement project, (C) expenditures related to
17 the installation of tile in the land which is the subject of the soil
18 improvement project, (D) expenditures related to the repair,
19 construction, and installation of fencing which are required as part of
20 the soil improvement project, and (E) expenditures related to the repair
21 of silos which are required as part of the soil improvement project.
22 (iii) Eligible expenditures for a farmland improvement project for
23 which a tax credit may be allowed under this subdivision are the direct
24 expenses related to the construction of fencing, the installation of
25 fencing, the repair of fencing and the repair of silos.
26 (e) In no event shall the credit allowed under this subdivision with
27 respect to any particular soil improvement project or farmland improve-
28 ment project exceed ten thousand dollars. The credit allowed under this
57 12026-02-1
1 subdivision for any taxable year may not reduce the tax due for such
2 year to less than the higher of the amounts prescribed in paragraphs (c)
3 and (d) of subdivision one of this section. If, however, the amount of
4 credit allowed under this subdivision for any taxable year reduces the
5 tax amount to such amount, any amount of credit not deductible in such
6 taxable year may be carried over to the following year or years and may
7 be deducted from the taxpayer's tax for such year or years.
8 (f)(i) If a recapture event, as defined in subparagraph (ii) of this
9 paragraph, occurs prior to the end of sixty months after the completion
10 of the soil improvement project or farmland improvement project for
11 which a credit was allowed under this subdivision, the taxpayer shall be
12 required to add back in the taxable year in which the recapture event
13 occurs the amount of credit allowed under this subdivision.
14 (ii) For purposes of this paragraph, a "recapture event" means the
15 land which is the subject of the soil improvement project or the farm-
16 land improvement project is not used in agricultural production.
17 § 4. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
18 of the tax law, as separately amended by section 4 of part I, section 47
19 of part Y, section 4 of part CC, sections 4 and 15 of part GG, section 5
20 of part II and section 3 of part E of chapter 63 of the laws of 2000, is
21 amended to read as follows:
22 (B) shall be treated as the owner of a new business with respect to
23 such share if the corporation qualifies as a new business pursuant to
24 paragraph (j) of subdivision twelve of section two hundred ten of this
25 chapter, unless the shareholder has previously received a refund by
26 reason of the application of this subparagraph, or this subsection as it
27 was in effect for taxable years beginning before nineteen hundred nine-
28 ty-four.
58 12026-02-1
1 The corporation's
2 With respect to the credit base under
3 following credit section two hundred ten
4 under this section: or section fourteen
5 hundred fifty-six of this
6 chapter is:
7 Investment tax credit Investment credit base
8 under subsection (a) or qualified
9 rehabilitation
10 expenditures under
11 subdivision twelve of
12 section two hundred ten
13 Empire zone Cost or other basis
14 investment tax credit under subdivision
15 under subsection (j) twelve-B
16 of section two hundred
17 ten
18 Empire zone Eligible wages under
19 wage tax credit subdivision nineteen of
20 under subsection (k) section two hundred ten
21 or subsection (e) of
22 section fourteen hundred
23 fifty-six
24 Empire zone Qualified investments
59 12026-02-1
1 capital tax credit and contributions under
2 under subsection (1) subdivision twenty of
3 section two hundred ten
4 or subsection (d) of
5 section fourteen hundred
6 fifty-six
7 Agricultural property tax Allowable school
8 credit under subsection (n) district property taxes under
9 subdivision twenty-two of
10 section two hundred ten
11 Credit for employment Qualified first-year wages or
12 of persons with dis- qualified second-year wages
13 abilities under under subdivision
14 subsection (o) twenty-three of section
15 two hundred ten
16 or subsection (f)
17 of section fourteen
18 hundred fifty-six
19 Employment incentive Applicable investment credit
20 credit under subsec- base under subdivision
21 tion (a-1) twelve-D of section two
22 hundred ten
23 Empire zone Applicable investment
24 employment credit under sub-
60 12026-02-1
1 incentive credit under division twelve-C
2 subsection (j-1)
3 Alternative fuels credit Cost under subdivision
4 under subsection (p) twenty-four of section two
5 hundred ten
6 Qualified emerging Applicable credit base
7 technology company under subdivision twelve-E
8 employment credit of section two hundred ten
9 under subsection (q)
10 Qualified emerging Qualified investments under
11 technology company subdivision twelve-F of
12 capital tax credit section two hundred ten
13 under subsection (r)
14 Credit for purchase of an Cost of an automated
15 automated external defibrillator external defibrillator under
16 under subsection (s) subdivision twenty-five of
17 section two hundred ten
18 or subsection (j) of section
19 fourteen hundred fifty-six
20 Low-income housing Credit amount under
21 credit under subsection (x) subdivision thirty
22 of section two hundred ten or
23 subsection (1) of section
61 12026-02-1
1 fourteen hundred fifty-six
2 Credit for transportation Amount of credit under sub-
3 improvement contributions division thirty-two of section
4 under subsection (z) two hundred ten or subsection
5 (n) of section fourteen
6 hundred fifty-six
7 IMB credit for energy Amount of credit
8 taxes under sub- under subdivision
9 section (t-1) twenty-six-a of
10 section two hundred ten
11 QEZE credit for real property Amount of credit under
12 taxes under subsection (bb) subdivision twenty-seven of
13 section two hundred ten or
14 subsection (o) of section
15 fourteen hundred fifty-six
16 QEZE tax reduction credit Amount of credit under
17 under subsection (cc) subdivision twenty-eight of
18 section two hundred ten or
19 subsection (p) of section
20 fourteen hundred fifty-six
21 Green building credit Amount of green building credit
22 under subsection (y) under subdivision thirty-one
23 of section two hundred ten
62 12026-02-1
1 or subsection (m) of section
2 fourteen hundred fifty-six
3 Credit for long-term Qualified costs under
4 care insurance premiums subdivision twenty-five-a of
5 under subsection (aa) section two hundred ten
6 or subsection (k) of section
7 fourteen hundred fifty-six
8 Credit for soil improvement projects Amount of eligible expenditures
9 or farmland improvement projects under subdivision thirty-five
10 under subsection (hh) of section two hundred ten
11 § 5. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
12 of the tax law, as separately amended by section 4 of part I, section 4
13 of part CC, sections 4 and 15 of part GG, section 5 of part II and
14 section 3 of part E of chapter 63 of the laws of 2000, is amended to
15 read as follows:
16 (B) shall be treated as the owner of a new business with respect to
17 such share if the corporation qualifies as a new business pursuant to
18 paragraph (j) of subdivision twelve of section two hundred ten of this
19 chapter, unless the shareholder has previously received a refund by
20 reason of the application of this subparagraph, or this subsection as it
21 was in effect for taxable years beginning before nineteen hundred nine-
22 ty-four.
23 The corporation's
24 With respect to the credit base under
25 following credit section two hundred ten
63 12026-02-1
1 under this section: or section fourteen
2 hundred fifty-six of this
3 chapter is:
4 Investment tax credit Investment credit base
5 under subsection (a) or qualified
6 rehabilitation
7 expenditures under
8 subdivision twelve of
9 section two hundred ten
10 Empire zone Cost or other basis
11 investment tax credit under subdivision
12 under subsection (j) twelve-B
13 of section two hundred
14 ten
15 Empire zone Eligible wages under
16 wage tax credit subdivision nineteen of
17 under subsection (k) section two hundred ten
18 or subsection (e) of
19 section fourteen hundred
20 fifty-six
21 Empire zone Qualified investments
22 capital tax credit and contributions under
23 under subsection (1) subdivision twenty of
24 section two hundred ten
64 12026-02-1
1 or subsection (d) of
2 section fourteen hundred
3 fifty-six
4 Agricultural property tax Allowable school
5 credit under subsection (n) district property taxes under
6 subdivision twenty-two of
7 section two hundred ten
8 Credit for employment Qualified first-year wages or
9 of persons with dis- qualified second-year wages
10 abilities under under subdivision
11 subsection (o) twenty-three of section
12 two hundred ten
13 or subsection (f)
14 of section fourteen
15 hundred fifty-six
16 Employment incentive Applicable investment credit
17 credit under subsec- base under subdivision
18 tion (a-1) twelve-D
19 Empire zone Applicable investment
20 employment credit under sub-
21 incentive credit under division twelve-C
22 subsection (j-1)
65 12026-02-1
1 Alternative fuels credit Cost under subdivision
2 under subsection (p) twenty-four
3 Qualified emerging Applicable credit base
4 technology company under subdivision twelve-E
5 employment credit of section two hundred ten
6 under subsection (q)
7 Qualified emerging Qualified investments under
8 technology company subdivision twelve-F of
9 capital tax credit section two hundred ten
10 under subsection (r)
11 Credit for purchase of an Cost of an automated
12 automated external defibrillator external defibrillator under
13 under subsection (s) subdivision twenty-five of
14 section two hundred ten
15 or subsection (j) of section
16 fourteen hundred fifty-six
17 Low-income housing Credit amount under
18 credit under subsection (x) subdivision thirty
19 of section two hundred ten or
20 subsection (1) of section
21 fourteen hundred fifty-six
66 12026-02-1
1 Credit for transportation Amount of credit under sub-
2 improvement contributions division thirty-two of section
3 under subsection (z) two hundred ten or subsection
4 (n) of section fourteen
5 hundred fifty-six
6 QEZE credit for real property Amount of credit under
7 taxes under subsection (bb) subdivision twenty-seven of
8 section two hundred ten or
9 subsection (o) of section
10 fourteen hundred fifty-six
11 QEZE tax reduction credit Amount of credit under
12 under subsection (cc) subdivision twenty-eight of
13 section two hundred ten or
14 subsection (p) of section
15 fourteen hundred fifty-six
16 Green building credit Amount of green building credit
17 under subsection (y) under subdivision thirty-one
18 of section two hundred ten
19 or subsection (m) of section
20 fourteen hundred fifty-six
21 Credit for long-term Qualified costs under
22 care insurance premiums subdivision twenty-five-a of
23 under subsection (aa) section two hundred ten
24 or subsection (k) of section
67 12026-02-1
1 fourteen hundred fifty-six
2 Credit for soil improvement projects Amount of eligible expenditures
3 or farmland improvement projects under subdivision thirty-five of
4 under subsection (hh) section two hundred ten
5 § 6. The subsection heading and paragraphs 1, 2, 3, 4, 5 and 7 of
6 subsection (n) of section 606 of the tax law, the subsection heading and
7 paragraphs 3, 5 and 7 as added by chapter 309 of the laws of 1996, para-
8 graphs 1 and 2 as amended by chapter 315 of the laws of 1998, paragraph
9 4 and subparagraph (B) of paragraph 5 as amended by section 2 of part N
10 of chapter 407 of the laws of 1999, are amended to read as follows:
11 Agricultural property tax credit credits. (1) General. (A) Farmers'
12 credit. In the case of a taxpayer who is an eligible farmer or an
13 eligible farmer who has paid taxes pursuant to a land contract and who
14 owns qualified agricultural property, there shall be allowed a credit
15 for the allowable school district property taxes on such property.
16 (B) Agricultural assessment credit. In the case of a taxpayer that
17 owns agricultural assessment property which is leased to another person,
18 there shall be allowed a credit for the allowable school district prop-
19 erty taxes on such property.
20 (C) A taxpayer shall claim only one of the credits provided under
21 subparagraph (A) or subparagraph (B) of this paragraph for the taxable
22 year.
23 (D) The term "allowable school district property taxes" means the
24 school district property taxes paid during the taxable year on quali-
25 fied agricultural property , subject to the acreage limitation provided
26 in paragraph five of this subsection and the income limitation provided
27 in paragraph six of this subsection. Such credit
68 12026-02-1
1 (E) For purposes of this subsection, a land contract owner of property
2 shall be deemed to be the owner of such property. The term "land
3 contract owner" means a person other than the owner of record of land
4 who has paid the school district property taxes on such land pursuant to
5 a contract for the future purchase of such land.
6 (F) The credit under this subsection shall be allowed against the
7 taxes imposed by this article for the taxable year reduced by the cred-
8 its permitted by this article. If the credit exceeds the tax as so
9 reduced, the taxpayer may receive, and the comptroller, subject to a
10 certificate of the commissioner, shall pay as an overpayment, without
11 interest, the amount of such excess.
12 (2) Eligible farmer. For purposes of this subsection, the term
13 "eligible farmer" means a taxpayer whose federal gross income from farm-
14 ing for the taxable year is at least two-thirds of excess federal gross
15 income. The term "eligible farmer" shall also include an individual
16 other than the taxpayer of record for qualified agricultural land who
17 has paid the school district property taxes on such land pursuant to a
18 contract for the future purchase of such land provided such individual
19 has a federal gross income from farming for the taxable year which is at
20 least two-thirds of excess federal gross income. Excess federal gross
21 income means the amount of federal gross income from all sources for the
22 taxable year reduced by the sum (not to exceed thirty thousand dollars)
23 of those items included in federal gross income which consist of (i)
24 earned income, (ii) pension payments, including social security
25 payments, (iii) interest, and (iv) dividends. For purposes of this para-
26 graph, the term "earned income" shall mean wages, salaries, tips and
27 other employee compensation, and those items of gross income which are
28 includible in the computation of net earnings from self-employment.
69 12026-02-1
1 (3) School district property taxes. For purposes of this subsection,
2 the term "school district property taxes" means all property taxes,
3 special ad valorem levies and special assessments, exclusive of penal-
4 ties and interest, levied for school district purposes on the qualified
5 agricultural property owned by the taxpayer.
6 (4) Qualified property, qualified agricultural property . For purposes
7 of this subsection, the , agricultural assessment property. (A) The term
8 qualified property means qualified agricultural property or agricultural
9 assessment property.
10 (B) The term "qualified agricultural property" means land located in
11 this state which is used in agricultural production, and land improve-
12 ments, structures and buildings (excluding buildings used for the
13 taxpayer's residential purpose) located on such land which are used or
14 occupied to carry out such production. Qualified agricultural property
15 also includes land set aside or retired under a federal supply manage-
16 ment or soil conservation program.
17 (C) The term "agricultural assessment property" means land which
18 receives or is eligible to receive an agricultural assessment for the
19 taxable year pursuant to section three hundred five or three hundred six
20 of the agriculture and markets law, and land improvements, structures
21 and buildings (excluding buildings used for the taxpayer's residential
22 purpose) located on such land which are used or occupied to carry out
23 agricultural production.
24 (5) Acreage limitation. (A) Eligible taxes. In the event that the
25 qualified agricultural property owned by the taxpayer includes land in
26 excess of the base acreage as provided in this paragraph, the amount of
27 school district property taxes eligible for credit under this subsection
28 shall be that portion of the school district property taxes which bears
70 12026-02-1
1 the same ratio to the total school district property taxes paid during
2 the taxable year, as the acreage allowable under this paragraph bears to
3 the entire acreage of such land.
4 (B) Allowable acreage. The allowable acreage is the sum of the base
5 acreage set forth below and fifty percent of the incremental acreage.
6 The incremental acreage is the excess of the entire acreage of qualified
7 agricultural land owned by the taxpayer over the base acreage. Except
8 as provided in subparagraph (C) of this paragraph:
9 For taxable years beginning: The base acreage is:
10 in 1997 100
11 after 1997 250
12 For taxable years beginning after two thousand, total base acreage may
13 be increased by any acreage enrolled or participating during the taxable
14 year in a federal environmental conservation acreage reserve program
15 pursuant to title three of the federal agriculture improvement and
16 reform act of nineteen hundred ninety-six.
17 (C) Base acreage of related persons. Where the taxpayer and one or
18 more related persons each own qualified agricultural property on the
19 first day of March of any year, the base acreage under subparagraph (B)
20 of this paragraph shall be divided equally and allotted among the
21 taxpayer and such related persons, and the taxpayer's base acreage for
22 the taxable year which includes such March first shall be limited to its
23 allotted share. Provided, however, if the taxpayer and all such related
24 persons consent (at such time and in such manner as the commissioner may
25 prescribe) to an unequal division, the taxpayer's base acreage for such
26 taxable year shall be limited to its allotted share under such unequal
27 division.
71 12026-02-1
1 (D) Related persons. (i) For purposes of subparagraph (C) of this
2 paragraph, the term "related person" means:
3 (I) a spouse;
4 (II) a corporation subject to tax under article nine-A of this chap-
5 ter, where more than fifty percent in value of the outstanding stock of
6 the corporation is owned, directly or indirectly, by or for the taxpay-
7 er, or, where the taxpayer is a trust, where such stock is owned direct-
8 ly or indirectly by or for the grantor of such trust;
9 (III) a partnership, estate or trust of which the taxpayer owns,
10 directly or indirectly, more than fifty percent of the capital, profits
11 or beneficial interest.
12 (ii) For purposes of subparagraph (C) of this paragraph, where the
13 taxpayer is an estate or trust, the term "related person" shall also
14 mean a corporation subject to tax under article nine-A of this chapter,
15 a partnership, an estate or trust:
16 (I) where more than fifty percent of the beneficial interest in the
17 taxpayer is owned, directly or indirectly, by or for such corporation,
18 partnership, estate or trust or by or for the grantor of such trust; or
19 (II) if the same person owns more than fifty percent of the benefi-
20 cial interest in the taxpayer and more than fifty percent in value of
21 the outstanding stock of the corporation, or more than fifty percent of
22 the capital or profits interest in the partnership, or more than fifty
23 percent of the beneficial interest in the estate or trust.
24 (iii) In determining whether a person is a related person within the
25 meaning of this subparagraph:
26 (I) stock owned, directly or indirectly, by or for a corporation,
27 partnership, estate or trust shall be considered as being owned propor-
28 tionately by or for its shareholders, partners or beneficiaries;
72 12026-02-1
1 (II) an individual shall be considered as owning the stock owned,
2 directly or indirectly, by or for his spouse;
3 (III) stock constructively owned by a person by reason of the appli-
4 cation of item (I) of this clause shall, for the purpose of applying
5 item (I) or (II) of this clause, be treated as actually owned by such
6 person.
7 (7) Nonqualified use. (A) No credit in conversion year. In the event
8 that qualified agricultural property is converted by the taxpayer to
9 nonqualified use, credit under this subsection shall not be allowed with
10 respect to such property for the taxable year of conversion (the conver-
11 sion year).
12 (B) Credit recapture. If the conversion by the taxpayer of quali-
13 fied agricultural property to nonqualified use occurs during the peri-
14 od of the two taxable years following the taxable year for which the
15 credit under this subsection was first claimed with respect to such
16 property, the credit allowed with respect to such property for the taxa-
17 ble years prior to the conversion year must be added back in the conver-
18 sion year. Where the property converted includes land, and where the
19 conversion is of only a portion of such land, the credit allowed with
20 respect to the property converted shall be determined by multiplying the
21 entire credit under this subsection for the taxable years prior to the
22 conversion year by a fraction, the numerator of which is the acreage
23 converted and the denominator of which is the entire acreage of such
24 land owned by the taxpayer immediately prior to the conversion.
25 (C) Exception to recapture. Subparagraph (B) of this paragraph shall
26 not apply to the conversion of property where the conversion is by
27 reason of involuntary conversion, within the meaning of section one
28 thousand thirty-three of the internal revenue code.
73 12026-02-1
1 (D) Conversion to nonqualified use. For purposes of this paragraph, a
2 sale or other disposition of qualified agricultural property alone shall
3 not constitute a conversion to a nonqualified use. In the case of agri-
4 cultural assessment property, conversion to nonqualified use shall mean
5 that such property is converted to a use which would disqualify such
6 property for an agricultural assessment under section three hundred five
7 or three hundred six of the agriculture and markets law.
8 § 7. Section 606 of the tax law is amended by adding a new subsection
9 (hh) to read as follows:
10 (hh) Credit for soil improvement projects or farmland improvement
11 projects. (1) A taxpayer shall be allowed a credit, to be computed as
12 hereinafter provided, against the tax imposed by this article. The
13 amount of the credit shall be twenty-five percent of the taxpayer's
14 expenditures with respect to a soil improvement project for land located
15 in New York state which meets the criteria set forth in paragraph two of
16 this subsection or a farmland improvement project for land located in
17 New York state which meets the criteria set forth in paragraph three of
18 this subsection. Such credit shall be allowed for the taxable year in
19 which either the soil improvement project or the farmland improvement
20 project, whichever is applicable, is completed. A taxpayer may be
21 allowed both a credit for a soil improvement project and a farmland
22 improvement project in the same taxable year. However, once a taxpayer
23 has been allowed a credit under this subsection with respect to a soil
24 improvement project, such taxpayer shall not be allowed a credit under
25 this subsection for a soil improvement project in subsequent taxable
26 years, and once a taxpayer has been allowed a credit under this
27 subsection with respect to a farmland improvement project, such taxpayer
74 12026-02-1
1 shall not be allowed a credit under this subsection for a farmland
2 improvement project in subsequent taxable years.
3 (2) Under this subsection, a soil improvement project must meet the
4 following criteria:
5 (A) Such soil improvement project must consist of activities which
6 will restore land for agricultural production purposes by improving the
7 soil resources of land, consistent with "best management practices" as
8 defined in subdivision four of section one hundred fifty of the agricul-
9 ture and markets law, which has not been used in agricultural production
10 for at least two years prior to the implementation of the project.
11 (B) Rented land which is the subject of the soil improvement project
12 must be leased pursuant to a written agreement having a term of at least
13 five years, commencing either in the year the soil improvement project
14 is implemented or in the year the soil improvement project is completed.
15 (3) Under this subsection, a farmland improvement project must meet
16 the following criteria:
17 (A) The farmland improvement project must consist of activities relat-
18 ing to the construction of fencing, the installation of fencing, the
19 repair of fencing or the repair of silos, or any combination of these
20 activities, on farmland, consistent with "best management practices" as
21 defined in subdivision four of section one hundred fifty of the agricul-
22 ture and markets law .
23 (B) For purposes of this paragraph, farmland means any land which
24 receives or is eligible to receive an agricultural assessment pursuant
25 to section three hundred five or three hundred six of the agriculture
26 and markets law for the taxable year.
27 (4) (A) Eligible expenditures for a soil improvement project for which
28 a tax credit may be allowed under this subsection are: (i) fees for
75 12026-02-1
1 architectural, archeological, geological and engineering services
2 related to the implementation and completion of the soil improvement
3 project, (ii) the cost of developing plans and specifications for the
4 soil improvement project, (iii) fees for consultant and legal services
5 related to the implementation and completion of the soil improvement
6 project, and (iv) direct expenses related to the implementation and
7 completion of the soil improvement project.
8 (B) Direct expenses related to the implementation and completion of
9 the soil improvement project are: (i) the expenditures listed in para-
10 graph one of subsection (c) of section 175 of the internal revenue code,
11 (ii) expenditures related to the application of lime on the land which
12 is the subject of the soil improvement project, (iii) expenditures
13 related to the installation of tile in the land which is the subject of
14 the soil improvement project, (iv) expenditures related to the repair,
15 construction, and installation of fencing which are required as part of
16 the soil improvement project, and (v) expenditures related to the repair
17 of silos which are required as part of the soil improvement project.
18 (C) Eligible expenditures for a farmland improvement project for which
19 a tax credit may be allowed under this subdivision are the direct
20 expenses related to the construction of fencing, the installation of
21 fencing, the repair of fencing and the repair of silos.
22 (5) In no event shall the credit allowed under this subsection with
23 respect to any particular soil improvement project or farmland improve-
24 ment project exceed ten thousand dollars. In the case of a husband and
25 wife, the amount of the credit shall be divided between them equally or
26 in such other manner as they may both elect. Any amount of credit not
27 deductible in any taxable year may be carried over to the following year
76 12026-02-1
1 or years and may be deducted from the taxpayer's tax for such year or
2 years.
3 (6) (A) If a recapture event, as defined in subparagraph (B) of this
4 paragraph, occurs prior to the end of sixty months after the completion
5 of the soil improvement project or farmland improvement project for
6 which a credit was allowed under this subsection, the taxpayer shall be
7 required to add back in the taxable year in which the recapture event
8 occurs the amount of credit allowed under this subsection.
9 (B) For purposes of this paragraph, a "recapture event" means the land
10 which is the subject of the soil improvement project or farmland
11 improvement project is not used in agricultural production.
12 § 8. This act shall take effect immediately and apply to taxable years
13 beginning on or after January 1, 2002; provided that only expenditures
14 incurred or paid on or after the date this act takes effect may be
15 considered for purposes of computing eligible expenditures under
16 sections three and seven of this act; provided that section four of this
17 act shall take effect on the same date as section five of part E of
18 chapter 63 of the laws of 2000 takes effect; and provided further
19 section five of this act shall take effect on the same date as the
20 repeal of section 47 of part Y of chapter 63 of the laws of 2000 takes
21 effect.
22 PART D
23 Section 1. Section 210 of the tax law is amended by adding a new subdi-
24 vision 34 to read as follows:
25 34. Qualified New York conservation contribution credit. (a) General.
26 A taxpayer shall be allowed a credit, to be computed as hereinafter
77 12026-02-1
1 provided, against the tax imposed by this article, for qualified New
2 York conservation contributions made during the taxable year.
3 (b) Qualified New York conservation contribution. The term "qualified
4 New York conservation contribution" means a qualified conservation
5 contribution within the meaning of paragraph one of subsection (h) of
6 section one hundred seventy of the internal revenue code, but only with
7 respect to a qualified real property interest, as defined under para-
8 graph two of such subsection (h), which is located within New York
9 state. Provided, further, that a qualified real property interest, as
10 defined under subparagraph (C) of paragraph two of such subsection (h),
11 must also meet the requirements of title three of article forty-nine of
12 the environmental conservation law.
13 (c) Amount of the credit. The amount of the credit shall be twenty-
14 five percent of the amount of the taxpayer's qualified New York conser-
15 vation contribution which qualifies for the deduction for the taxable
16 year under subsection (a) of section one hundred seventy of the internal
17 revenue code (without regard to whether the taxpayer in fact claimed the
18 deduction under such subsection (a) of section one hundred seventy for
19 the taxable year), such deduction to be determined without regard to the
20 limitations set forth in subsection (b) of section one hundred seventy.
21 The credit allowed to a taxpayer under this subdivision shall not exceed
22 two hundred fifty thousand dollars with respect to any taxable year.
23 (d) Carryovers. In no event shall the credit under this subdivision be
24 allowed in an amount which will reduce the tax payable to less than the
25 higher of the amounts prescribed in paragraphs (c) and (d) of subdivi-
26 sion one of this section. Provided, however, that if the amount of cred-
27 it allowable under this subdivision for any taxable year reduces the tax
28 to such amount, any amount of credit not deducted from the taxpayer's
78 12026-02-1
1 tax for such year may be carried over to the five taxable years next
2 following such taxable year and may be deducted from the taxpayer's tax
3 for such year or years.
4 § 2. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
5 of the tax law, as separately amended by section 4 of part I, section 47
6 of part Y, section 4 of part CC, sections 4 and 15 of part GG, section 5
7 of part II and section 3 of part E of chapter 63 of the laws of 2000, is
8 amended to read as follows:
9 (B) shall be treated as the owner of a new business with respect to
10 such share if the corporation qualifies as a new business pursuant to
11 paragraph (j) of subdivision twelve of section two hundred ten of this
12 chapter, unless the shareholder has previously received a refund by
13 reason of the application of this subparagraph, or this subsection as it
14 was in effect for taxable years beginning before nineteen hundred nine-
15 ty-four.
16 The corporation's
17 With respect to the credit base under
18 following credit section two hundred ten
19 under this section: or section fourteen
20 hundred fifty-six of this
21 chapter is:
22 Investment tax credit Investment credit base
23 under subsection (a) or qualified
24 rehabilitation
25 expenditures under
26 subdivision twelve of
79 12026-02-1
1 section two hundred ten
2 Empire zone Cost or other basis
3 investment tax credit under subdivision
4 under subsection (j) twelve-B
5 of section two hundred
6 ten
7 Empire zone Eligible wages under
8 wage tax credit subdivision nineteen of
9 under subsection (k) section two hundred ten
10 or subsection (e) of
11 section fourteen hundred
12 fifty-six
13 Empire zone Qualified investments
14 capital tax credit and contributions under
15 under subsection (1) subdivision twenty of
16 section two hundred ten
17 or subsection (d) of
18 section fourteen hundred
19 fifty-six
20 Agricultural property tax Allowable school
21 credit under subsection (n) district property taxes under
22 subdivision twenty-two of
23 section two hundred ten
80 12026-02-1
1 Credit for employment Qualified first-year wages or
2 of persons with dis- qualified second-year wages
3 abilities under under subdivision
4 subsection (o) twenty-three of section
5 two hundred ten
6 or subsection (f)
7 of section fourteen
8 hundred fifty-six
9 Employment incentive Applicable investment credit
10 credit under subsec- base under subdivision
11 tion (a-1) twelve-D of section two
12 hundred ten
13 Empire zone Applicable investment
14 employment credit under sub-
15 incentive credit under division twelve-C
16 subsection (j-1)
17 Alternative fuels credit Cost under subdivision
18 under subsection (p) twenty-four of section two
19 hundred ten
20 Qualified emerging Applicable credit base
21 technology company under subdivision twelve-E
22 employment credit of section two hundred ten
23 under subsection (q)
81 12026-02-1
1 Qualified emerging Qualified investments under
2 technology company subdivision twelve-F of
3 capital tax credit section two hundred ten
4 under subsection (r)
5 Credit for purchase of an Cost of an automated
6 automated external defibrillator external defibrillator under
7 under subsection (s) subdivision twenty-five of
8 section two hundred ten
9 or subsection (j) of section
10 fourteen hundred fifty-six
11 Low-income housing Credit amount under
12 credit under subsection (x) subdivision thirty
13 of section two hundred ten or
14 subsection (1) of section
15 fourteen hundred fifty-six
16 Credit for transportation Amount of credit under sub-
17 improvement contributions division thirty-two of section
18 under subsection (z) two hundred ten or subsection
19 (n) of section fourteen
20 hundred fifty-six
21 IMB credit for energy Amount of credit
22 taxes under sub- under subdivision
23 section (t-1) twenty-six-a of
24 section two hundred ten
82 12026-02-1
1 QEZE credit for real property Amount of credit under
2 taxes under subsection (bb) subdivision twenty-seven of
3 section two hundred ten or
4 subsection (o) of section
5 fourteen hundred fifty-six
6 QEZE tax reduction credit Amount of credit under
7 under subsection (cc) subdivision twenty-eight of
8 section two hundred ten or
9 subsection (p) of section
10 fourteen hundred fifty-six
11 Green building credit Amount of green building credit
12 under subsection (y) under subdivision thirty-one
13 of section two hundred ten
14 or subsection (m) of section
15 fourteen hundred fifty-six
16 Credit for long-term Qualified costs under
17 care insurance premiums subdivision twenty-five-a of
18 under subsection (aa) section two hundred ten
19 or subsection (k) of section
20 fourteen hundred fifty-six
21 Qualified New York conservation Amount of qualified conservation
22 contribution credit under contribution under subdivision
23 subsection (gg) thirty-four of
24 section two hundred ten
83 12026-02-1
1 § 3. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
2 of the tax law, as separately amended by section 4 of part I, section 4
3 of part CC, sections 4 and 15 of part GG, section 5 of part II and
4 section 3 of part E of chapter 63 of the laws of 2000, is amended to
5 read as follows:
6 (B) shall be treated as the owner of a new business with respect to
7 such share if the corporation qualifies as a new business pursuant to
8 paragraph (j) of subdivision twelve of section two hundred ten of this
9 chapter, unless the shareholder has previously received a refund by
10 reason of the application of this subparagraph, or this subsection as it
11 was in effect for taxable years beginning before nineteen hundred nine-
12 ty-four.
13 The corporation's
14 With respect to the credit base under
15 following credit section two hundred ten
16 under this section: or section fourteen
17 hundred fifty-six of this
18 chapter is:
19 Investment tax credit Investment credit base
20 under subsection (a) or qualified
21 rehabilitation
22 expenditures under
23 subdivision twelve of
24 section two hundred ten
25 Empire zone Cost or other basis
84 12026-02-1
1 investment tax credit under subdivision
2 under subsection (j) twelve-B
3 of section two hundred
4 ten
5 Empire zone Eligible wages under
6 wage tax credit subdivision nineteen of
7 under subsection (k) section two hundred ten
8 or subsection (e) of
9 section fourteen hundred
10 fifty-six
11 Empire zone Qualified investments
12 capital tax credit and contributions under
13 under subsection (1) subdivision twenty of
14 section two hundred ten
15 or subsection (d) of
16 section fourteen hundred
17 fifty-six
18 Agricultural property tax Allowable school
19 credit under subsection (n) district property taxes under
20 subdivision twenty-two of
21 section two hundred ten
22 Credit for employment Qualified first-year wages or
23 of persons with dis- qualified second-year wages
85 12026-02-1
1 abilities under under subdivision
2 subsection (o) twenty-three of section
3 two hundred ten
4 or subsection (f)
5 of section fourteen
6 hundred fifty-six
7 Employment incentive Applicable investment credit
8 credit under subsec- base under subdivision
9 tion (a-1) twelve-D
10 Empire zone Applicable investment
11 employment credit under sub-
12 incentive credit under division twelve-C
13 subsection (j-1)
14 Alternative fuels credit Cost under subdivision
15 under subsection (p) twenty-four
16 Qualified emerging Applicable credit base
17 technology company under subdivision twelve-E
18 employment credit of section two hundred ten
19 under subsection (q)
20 Qualified emerging Qualified investments under
21 technology company subdivision twelve-F of
22 capital tax credit section two hundred ten
23 under subsection (r)
86 12026-02-1
1 Credit for purchase of an Cost of an automated
2 automated external defibrillator external defibrillator under
3 under subsection (s) subdivision twenty-five of
4 section two hundred ten
5 or subsection (j) of section
6 fourteen hundred fifty-six
7 Low-income housing Credit amount under
8 credit under subsection (x) subdivision thirty
9 of section two hundred ten or
10 subsection (1) of section
11 fourteen hundred fifty-six
12 Credit for transportation Amount of credit under sub-
13 improvement contributions division thirty-two of section
14 under subsection (z) two hundred ten or subsection
15 (n) of section fourteen
16 hundred fifty-six
17 QEZE credit for real property Amount of credit under
18 taxes under subsection (bb) subdivision twenty-seven of
19 section two hundred ten or
20 subsection (o) of section
21 fourteen hundred fifty-six
22 QEZE tax reduction credit Amount of credit under
23 under subsection (cc) subdivision twenty-eight of
24 section two hundred ten or
87 12026-02-1
1 subsection (p) of section
2 fourteen hundred fifty-six
3 Green building credit Amount of green building credit
4 under subsection (y) under subdivision thirty-one
5 of section two hundred ten
6 or subsection (m) of section
7 fourteen hundred fifty-six
8 Credit for long-term Qualified costs under
9 care insurance premiums subdivision twenty-five-a of
10 under subsection (aa) section two hundred ten
11 or subsection (k) of section
12 fourteen hundred fifty-six
13 Qualified New York conservation Amount of qualified conservation
14 contribution credit under contribution under subdivision
15 subsection (gg) thirty-four of section two
16 hundred ten
17 § 4. Section 606 of the tax law is amended by adding a new subsection
18 (gg) to read as follows:
19 (gg) Qualified New York conservation contribution credit. (1) Gener-
20 al. A taxpayer shall be allowed a credit, to be computed as hereinafter
21 provided, against the tax imposed by this article, for qualified New
22 York conservation contributions made during the taxable year.
23 (2) Qualified New York conservation contribution. The term "qualified
24 New York conservation contribution" means a qualified conservation
25 contribution within the meaning of paragraph one of subsection (h) of
88 12026-02-1
1 section one hundred seventy of the internal revenue code, but only with
2 respect to a qualified real property interest, as defined under para-
3 graph two of such subsection (h), which is located within New York
4 state. Provided, further, that a qualified real property interest, as
5 defined under subparagraph (C) of paragraph two of such subsection (h),
6 must also meet the requirements of title three of article forty-nine of
7 the environmental conservation law.
8 (3) Amount of the credit. The amount of the credit shall be twenty-
9 five percent of the amount of the taxpayer's qualified New York conser-
10 vation contribution which qualifies for the deduction for the taxable
11 year under subsection (a) of section one hundred seventy of the internal
12 revenue code (without regard to whether the taxpayer in fact claimed the
13 deduction under such subsection (a) of section one hundred seventy for
14 the taxable year), such deduction to be determined without regard to the
15 limitations set forth in subsection (b) of section one hundred seventy.
16 The credit allowed to a taxpayer under this subsection shall not exceed
17 two hundred fifty thousand dollars with respect to any taxable year.
18 (4) Carryovers. If the amount of credit allowed under this subsection
19 for any taxable year shall exceed the taxpayer's tax for such year, the
20 excess may be carried over to the five taxable years next following such
21 taxable year and may be deducted from the taxpayer's tax for such year
22 or years.
23 (5) Husband and wife. In the case of a husband and wife, the amount of
24 the credit shall be divided between them equally or in such other manner
25 as they may both elect.
26 § 5. This act shall take effect immediately and shall apply to taxable
27 years beginning on and after January 1, 2002; provided however that
28 section two of this act shall take effect on the same date as section 3
89 12026-02-1
1 of part E of chapter 63 of the laws of 2000 takes effect; and provided,
2 further that section three of this act shall take effect on the same
3 date as the repeal of section 47 of part Y of chapter 63 of the laws of
4 2000.
5 PART E
6 Section 1. Section 606 of the tax law is amended by adding a new
7 subsection (ii) to read as follows:
8 (ii) Historic homeownership rehabilitation credit. (1) A taxpayer
9 shall be allowed a credit, to be computed as hereinafter provided,
10 against the tax imposed by this article. The amount of the credit shall
11 be equal to either fifteen or twenty-five percent of the qualified reha-
12 bilitation expenditures made by the taxpayer with respect to a qualified
13 historic home and may be allowed in the taxable year in which such
14 expenditures are made.
15 (A) A credit in the amount of fifteen percent shall be allowed for
16 qualified rehabilitation expenditures if only the exterior work has been
17 approved by a local landmark commission established pursuant to section
18 ninety-six-a or one hundred nineteen-dd of the general municipal law or
19 by the office of parks, recreation and historic preservation.
20 (B) A credit in the amount of twenty-five percent shall be allowed for
21 qualified rehabilitation expenditures that have been approved by the
22 office of parks, recreation and historic preservation or by a local
23 government certified pursuant to section 101(c)(1) of the national
24 historic preservation act. Under this subparagraph, approval is neces-
25 sary for the qualified rehabilitation expenditures related to both the
90 12026-02-1
1 exterior work on the qualified historic home and interior work affecting
2 primary significant historic spaces of the qualified historic home.
3 (C) With respect to any particular residence of a taxpayer, that
4 taxpayer shall be allowed either the credit provided for in subparagraph
5 (A) or (B) of this paragraph, but not both credits.
6 (2) (A) With respect to any particular residence of a taxpayer, the
7 credit allowed under either subparagraph (A) or (B) of paragraph one of
8 this subsection shall not exceed fifty thousand dollars. In the case of
9 a husband and wife, the amount of the credit shall be divided between
10 them equally or in such other manner as they may both elect. If a
11 taxpayer incurs qualified rehabilitation expenditures in relation to
12 more than one residence in the same year, the total amount of credit
13 allowed under either subparagraph (A) or (B) of paragraph one of this
14 subsection for all such expenditures shall not exceed fifty thousand
15 dollars.
16 (B) If the credit allowed under either subparagraph (A) or (B) of
17 paragraph one of this subsection for any taxable year exceeds the
18 taxpayer's tax for such year, the excess shall be treated as an overpay-
19 ment of tax to be credited or refunded in accordance with the provisions
20 of section six hundred eighty-six of this article, provided, however,
21 that no interest shall be paid thereon.
22 (3)(A) The term "qualified rehabilitation expenditure" means, for
23 purposes of this subsection, any amount properly chargeable to a capital
24 account:
25 (i) in connection with the certified rehabilitation of a qualified
26 historic home, and
91 12026-02-1
1 (ii) for property for which depreciation would be allowable under
2 section 168 of the internal revenue code if the qualified historic home
3 were used in a trade or business.
4 (B) Such term shall not include (i) the cost of acquiring any building
5 or interest therein, (ii) any expenditure attributable to the enlarge-
6 ment of an existing building, or (iii) any expenditure made prior to
7 January first, two thousand two.
8 (C) Such term shall not include any expenditure in connection with the
9 rehabilitation of a qualified historic home unless at least five percent
10 of the total expenditures made in the rehabilitation process are alloca-
11 ble to the rehabilitation of the exterior of such building.
12 (D) If only a portion of a building is used as a residence of the
13 taxpayer, only qualified rehabilitation expenditures which are properly
14 allocable to such residential portion shall be taken into account under
15 this subsection.
16 (4)(A) The term "certified rehabilitation" means, for purposes of this
17 subsection, any rehabilitation of a certified historic structure which
18 has been approved and certified as being consistent with the standards
19 established by the commissioner of parks, recreation and historic pres-
20 ervation for rehabilitation by the office of parks, recreation and
21 historic preservation, a local government certified pursuant to section
22 101 (c)(1) of the national historic preservation act or a local landmark
23 commission established pursuant to section ninety-six-a or one hundred
24 nineteen-dd of the general municipal law.
25 (B) A certified rehabilitation shall require:
26 (i) an initial certification that the structure meets the definition
27 of the term "certified historic structure";
92 12026-02-1
1 (ii) a second certification, to be issued prior to construction,
2 certifying that the proposed rehabilitation work is consistent with
3 standards established by the commissioner of parks, recreation and
4 historic preservation for rehabilitation; and
5 (iii) a final certification issued when construction is completed,
6 certifying that the work was completed as proposed and that the costs
7 are consistent with the work completed. Such final certification shall
8 be acceptable as proof that the expenditures related to such
9 construction qualify as qualified rehabilitation expenditures for
10 purposes of the credit allowed under either subparagraph (A) or (B) of
11 paragraph one of this subsection.
12 (5)(A) The term "qualified historic home" means, for purposes of this
13 subsection, a certified historic structure located within New York
14 state:
15 (i) which has been substantially rehabilitated,
16 (ii) which, or any portion of which, is owned, in whole or part, by
17 the taxpayer, and
18 (iii) in which the taxpayer resides during the taxable year in which
19 the taxpayer is allowed a credit under this subsection.
20 (B) A building shall be treated as having been "substantially rehabil-
21 itated" if the qualified rehabilitation expenditures in relation to such
22 building total twenty thousand dollars or more. However, in the case of
23 a building any part of which is a targeted area residence within the
24 meaning of section 143(j)(1) of the internal revenue code, or which is
25 located within a state empire zone designated under article eighteen-B
26 of the general municipal law, such building shall be treated as having
27 been "substantially rehabilitated" if the qualified rehabilitation
93 12026-02-1
1 expenditures in relation to such building total five thousand dollars or
2 more.
3 (6) The term "certified historic structure" means, for purposes of
4 this subsection, any building (and its structural components) which
5 (i) is listed in the state or national register of historic places or,
6 (ii) is located in a registered historic district and is certified as
7 being of historic significance to the district.
8 (7) If the taxpayer holds stock as a tenant-shareholder in a cooper-
9 ative housing corporation, such taxpayer shall be treated as owning the
10 house or apartment which the taxpayer is entitled to occupy as such
11 shareholder.
12 (8)(A) A percentage of the total expenditures made in the rehabili-
13 tation of the exterior of a building containing cooperative or condomin-
14 ium dwelling units shall be attributed to each such unit within the
15 building based on the percentage of space each such unit occupies within
16 the building.
17 (B) In the case of a building where less than the entire building is
18 used as a residence of the taxpayer, only the portion of the total
19 expenditures made in the rehabilitation of the building that is attrib-
20 utable to the residence of the taxpayer shall be treated as qualified
21 rehabilitation expenditures for the purposes of this subsection.
22 (C) In the case of a building that is owned by and is a residence of
23 two or more persons, other than a husband and wife, the portion of the
24 total expenditures made in the rehabilitation of the building that is
25 attributable to each taxpayer shall be equal to the taxpayer's share of
26 ownership in such building.
27 (9) In the case of a building other than a building to which paragraph
28 ten of this subsection applies, qualified rehabilitation expenditures
94 12026-02-1
1 shall be treated for purposes of this subsection as made on the date of
2 the final certification referred to in clause (iii) of subparagraph (B)
3 of paragraph four of this subsection.
4 (10)(A) In the case of a purchased qualified historic home, the
5 taxpayer shall be treated as having made, on the date of purchase, the
6 qualified rehabilitation expenditures made by the seller of such home.
7 For purposes of this subsection, expenditures made by the seller shall
8 be deemed qualified rehabilitation expenditures if such expenditures, if
9 made by the purchaser, would have so qualified.
10 (B) The term "purchased qualified historic home" means any qualified
11 historic home purchased by the taxpayer if:
12 (i) the taxpayer is the first purchaser of such home after the date of
13 the final certification referred to in clause (iii) of subparagraph (B)
14 of paragraph four of this subsection, and the purchase occurs within
15 five years after such date,
16 (ii) the taxpayer, during the taxable year in which the taxpayer is
17 allowed a credit under this subsection, resides in such home,
18 (iii) no credit was allowed to the seller under this subsection with
19 respect to such rehabilitation, and
20 (iv) the taxpayer is furnished with such information as the commis-
21 sioner determines is necessary to determine any credit under this
22 subsection.
23 (11)(A) If, before the end of the two-year period beginning either on
24 the date of the final certification referred to in clause (iii) of
25 subparagraph (B) of paragraph four of this subsection or, if paragraph
26 ten of this subsection applies, on the date of purchase of such building
27 by the taxpayer, the taxpayer disposes of such taxpayer's interest in
28 such building, or such building ceases to be used as a residence of the
95 12026-02-1
1 taxpayer, the taxpayer's tax imposed by this article for the taxable
2 year in which such disposition or cessation occurs shall be increased by
3 the recapture portion of the credit allowed under this subsection for
4 all prior taxable years with respect to such rehabilitation.
5 (B) For purposes of subparagraph (A) of this paragraph, the recapture
6 portion shall be the product of the amount of credit claimed by the
7 taxpayer multiplied by a ratio, the numerator of which is equal to twen-
8 ty-four less the number of months the building is used as the taxpayer's
9 residence and the denominator of which is twenty-four.
10 (12) Nothing contained in this subsection shall be construed to impose
11 a duty upon a local landmark commission established pursuant to section
12 ninety-six-a or one hundred nineteen-dd of the general municipal law or
13 a local government certified pursuant to section 101(c)(1) of the
14 national historic preservation act to undertake any review or approval
15 of an application for the certification of the rehabilitation of histor-
16 ic structures and of rehabilitation expenditures provided for in this
17 subsection.
18 § 2. Section 13.15 of the parks, recreation and historic preservation
19 law is amended by adding a new subdivision 6 to read as follows:
20 6. The office may establish a fee or fees for its processing and
21 review of applications for the certification of the rehabilitation of
22 historic buildings and the approval of rehabilitation expenditures and
23 related work pursuant to subsection (ii) of section six hundred six of
24 the tax law. All revenues from these fees shall be deposited by the
25 comptroller in the miscellaneous special revenue fund to be credited to
26 the agency's patron services account and shall be used to support the
27 office's historic preservation program. Nothing in this subdivision
28 shall be construed to limit the ability of a local landmark commission
96 12026-02-1
1 established pursuant to section ninety-six-a or one hundred nineteen-dd
2 of the general municipal law or a local government certified pursuant to
3 section 101(c)(1) of the national historic preservation act to establish
4 and charge fees for its processing and review of applications for the
5 certification of the rehabilitation of historic buildings and the
6 approval of rehabilitation expenditures.
7 § 3. This act shall take effect immediately and shall apply to taxable
8 years beginning on or after January 1, 2002.
9 PART F
10 Section 1. Subdivision 4 of section 22 of the public housing law, as
11 added by section 1 of part CC of chapter 63 of the laws of 2000, is
12 amended to read as follows:
13 4. Statewide limitation. The aggregate dollar amount of credit which
14 the commissioner may allocate to eligible low-income buildings under
15 this article shall be two four million dollars. The limitation
16 provided by this subdivision applies only to allocation of the aggregate
17 dollar amount of credit by the commissioner, and does not apply to
18 allowance to a taxpayer of the credit with respect to an eligible low-
19 income building for each year of the credit period.
20 § 2. This act shall take effect immediately.
21 PART G
22 Section 1. Paragraph (e) of subdivision 12 of section 210 of the tax
23 law, as amended by section 9 of part M of chapter 407 of the laws of
24 1999, is amended to read as follows:
97 12026-02-1
1 (e) (1) Except as otherwise provided in this paragraph, the credit
2 allowed under this subdivision for any taxable year shall not reduce the
3 tax due for such year to less than the higher of the amounts prescribed
4 in paragraphs (c) and (d) of subdivision one of this section. However,
5 if the amount of credit allowable under this subdivision for any taxable
6 year reduces the tax to such amount, any amount of credit allowed for a
7 taxable year commencing prior to January first, nineteen hundred eight-
8 y-seven and not deductible in such taxable year may be carried over to
9 the following year or years and may be deducted from the taxpayer's tax
10 for such year or years but in no event shall such credit be carried over
11 to taxable years commencing on or after January first, two thousand two,
12 and any amount of credit allowed for a taxable year commencing on or
13 after January first, nineteen hundred eighty-seven and not deductible in
14 such year may be carried over to the fifteen taxable years next follow-
15 ing such taxable year and may be deducted from the taxpayer's tax for
16 such year or years. In lieu of such carryover, any such taxpayer which
17 qualifies as a new business under paragraph (j) of this subdivision may
18 elect to treat the amount of such carryover as an overpayment of tax to
19 be credited or refunded in accordance with the provisions of section ten
20 hundred eighty-six of this chapter, provided, however, the provisions of
21 subsection (c) of section ten hundred eighty-eight of this chapter
22 notwithstanding, no interest shall be paid thereon.
23 (2)(i) Notwithstanding the provisions of subparagraph one of this
24 paragraph, a biotechnology company, as such term is defined in clause
25 (ii) of this subparagraph, which does not qualify as a new business
26 under paragraph (j) of this subdivision, may elect to treat the amount
27 of such carryover referred to in subparagraph one of this paragraph as
28 an overpayment of tax to be credited or refunded in accordance with the
98 12026-02-1
1 provisions of section ten hundred eighty-six of this chapter. Provided,
2 however, no interest shall be paid on such refund, notwithstanding the
3 provisions of subsection (c) of section ten hundred eighty-eight of this
4 chapter.
5 (ii) For purposes of this subparagraph, the term "biotechnology compa-
6 ny" means a taxpayer satisfying the requirements set forth in items (A),
7 (B) and (C) of this clause.
8 (A) Such taxpayer is primarily engaged in the business of applying
9 technologies such as recombinant DNA techniques, biochemistry, molecular
10 and cellular biology, genetics and genetic engineering, biological cell
11 fusion techniques, and new bioprocesses, using living organisms, or
12 parts of organisms, to produce or modify products, to improve plants or
13 animals, to develop microorganisms for specific uses, to identify
14 targets for pharmaceutical development, or to transform biological
15 systems into useful processes and products or to develop microorganisms
16 for specific uses.
17 (B) Over fifty percent of the voting stock of such taxpayer is not
18 owned or controlled, directly or indirectly, by a single corporation, a
19 single partnership or a single limited liability company. For purposes
20 of this item, voting stock means shares of stock entitling the holders
21 thereof to vote for the election of directors or trustees.
22 (C) The average number of employees within the state, except general
23 executive officers, of such taxpayer during the taxable year for which
24 such refund or credit of such carryover is claimed is less than one
25 hundred. For purposes of this item, such average shall be computed by
26 ascertaining the number of employees within the state, except general
27 executive officers, employed by the taxpayer on the thirty-first day of
28 March, the thirtieth day of June, the thirtieth day of September and the
99 12026-02-1
1 thirty-first day of December in such taxable year, by adding together
2 the number of employees ascertained on each of such dates and dividing
3 the sum so obtained by the number of such above mentioned dates occur-
4 ring within such taxable year. For purposes of this item, the term
5 "employees within the state, except general executive officers" shall
6 have the same meaning as it has in subparagraph three of paragraph (a)
7 of subdivision three of this section.
8 § 2. This act shall take effect immediately and shall apply to taxable
9 years beginning on or after January 1, 2002.
10 PART H
11 Section 1. Notwithstanding any other law, rule or regulation to the
12 contrary, the comptroller is hereby authorized and directed to deposit
13 in equal monthly installments the amounts listed below to the credit of
14 the dedicated highway and bridge trust fund from taxes now deposited
15 into the general fund pursuant to the provisions of the vehicle and
16 traffic law: one hundred sixty-nine million dollars from April 1, 2001
17 through March 31, 2002; one hundred seventy-one million six hundred
18 thousand dollars from April 1, 2002 through March 31, 2003; and one
19 hundred fifty-two million seven hundred thousand dollars from April 1,
20 2003 through March 31, 2004.
21 § 2. This act shall take effect April 1, 2001.
22 PART I
23 Section 1. Subdivision 1 of section 183-a of the tax law, as amended
24 by chapter 59 of the laws of 1997, is amended to read as follows:
100 12026-02-1
1 1. The term "corporation" as used in this section shall include an
2 association, within the meaning of paragraph three of subsection (a) of
3 section seventy-seven hundred one of the internal revenue code (includ-
4 ing a limited liability company), a publicly traded partnership treated
5 as a corporation for purposes of the internal revenue code pursuant to
6 section seventy-seven hundred four thereof and any business conducted by
7 a trustee or trustees wherein interest or ownership is evidenced by
8 certificates or other written instruments. Every corporation, joint-
9 stock company or association formed for or principally engaged in the
10 conduct of canal, steamboat, ferry (except a ferry company operating
11 between any of the boroughs of the city of New York under a lease grant-
12 ed by the city), express, navigation, pipe line, transfer, baggage
13 express, omnibus, taxicab, telegraph, or telephone business, or formed
14 for or principally engaged in the conduct of two or more such busi-
15 nesses, and every corporation, joint-stock company or association formed
16 for or principally engaged in the conduct of a railroad, palace car,
17 sleeping car or trucking business or formed for or principally engaged
18 in the conduct of two or more of such businesses and which has made an
19 election pursuant to subdivision ten of section one hundred eighty-three
20 of this article, and every other corporation, joint-stock company or
21 association principally engaged in the conduct of a transportation or
22 transmission business, except a corporation, joint-stock company or
23 association formed for or principally engaged in the conduct of a rail-
24 road, palace car, sleeping car or trucking business or formed for or
25 principally engaged in the conduct of two or more of such businesses and
26 which has not made the election provided for in subdivision ten of
27 section one hundred eighty-three of this article, and except a corpo-
28 ration, joint-stock company or association principally engaged in the
101 12026-02-1
1 conduct of aviation (including air freight forwarders acting as princi-
2 pal and like indirect air carriers) and except a corporation principally
3 engaged in providing telecommunication services between aircraft and
4 dispatcher, aircraft and air traffic control or ground station and
5 ground station (or any combination of the foregoing), at least ninety
6 percent of the voting stock of which corporation is owned, directly or
7 indirectly, by air carriers and which corporation's principal function
8 is to fulfill the requirements of (i) the federal aviation adminis-
9 tration (or the successor thereto) or (ii) the international civil
10 aviation organization (or the successor thereto), relating to the exist-
11 ence of a communication system between aircraft and dispatcher, aircraft
12 and air traffic control or ground station and ground station (or any
13 combination of the foregoing) for the purposes of air safety and naviga-
14 tion and except a corporation, joint-stock company or association which
15 is liable to taxation under section one hundred eighty-six of this arti-
16 cle or article thirty-two of this chapter, shall pay for the privilege
17 of exercising its corporate franchise, or of doing business, or of
18 employing capital, or of owning or leasing property in the metropolitan
19 commuter transportation district in such corporate or organized capaci-
20 ty, or of maintaining an office in such district, a tax surcharge for
21 all or any part of its years commencing on or after January first, nine-
22 teen hundred eighty-two but ending before December thirty-first, two
23 thousand one five, which tax surcharge, in addition to the tax imposed
24 by section one hundred eighty-three of this article, shall be computed
25 at the rate of eighteen per centum of the tax imposed under such section
26 one hundred eighty-three for such years or any part of such years ending
27 before December thirty-first, nineteen hundred eighty-three after the
28 deduction of any credits otherwise allowable under this article, and at
102 12026-02-1
1 the rate of seventeen per centum of the tax imposed under such section
2 for such years or any part of such years ending on or after December
3 thirty-first, nineteen hundred eighty-three after the deduction of any
4 credits otherwise allowable under this article; provided, however, that
5 such rates of tax surcharge shall be applied only to that portion of the
6 tax imposed under section one hundred eighty-three of this article after
7 the deduction of any credits otherwise allowable under this article
8 which is attributable to the taxpayer's business activity carried on
9 within the metropolitan commuter transportation district as so deter-
10 mined in the manner prescribed by the rules and regulations promulgated
11 by the commissioner; and provided, further, that the tax surcharge
12 imposed by this section shall not be imposed upon any taxpayer for more
13 than two hundred twenty-eight seventy-six months.
14 § 2. Subdivision 1 of section 184-a of the tax law, as amended by
15 section 120 of part A of chapter 389 of the laws of 1997, is amended to
16 read as follows:
17 1. The term "corporation" as used in this section shall include an
18 association, within the meaning of paragraph three of subsection (a) of
19 section seventy-seven hundred one of the internal revenue code (includ-
20 ing a limited liability company), and a publicly traded partnership
21 treated as a corporation for purposes of the internal revenue code
22 pursuant to section seventy-seven hundred four thereof. Every corpo-
23 ration, joint-stock company or association formed for or principally
24 engaged in the conduct of canal, steamboat, ferry (except a ferry compa-
25 ny operating between any of the boroughs of the city of New York under a
26 lease granted by the city), express, navigation, pipe line, transfer,
27 baggage express, omnibus, taxicab, telegraph or local telephone busi-
28 ness, or formed for or principally engaged in the conduct of two or more
103 12026-02-1
1 such businesses, and every corporation, joint-stock company or associ-
2 ation formed for or principally engaged in the conduct of a surface
3 railroad, whether or not operated by steam, subway railroad, elevated
4 railroad, palace car, sleeping car or trucking business or principally
5 engaged in the conduct of two or more such businesses and which has made
6 an election pursuant to subdivision ten of section one hundred eighty-
7 three of this article, and every other corporation, joint-stock company
8 or association formed for or principally engaged in the conduct of a
9 transportation or transmission business (other than a telephone busi-
10 ness) except a corporation, joint-stock company or association formed
11 for or principally engaged in the conduct of a surface railroad, whether
12 or not operated by steam, subway railroad, elevated railroad, palace
13 car, sleeping car or trucking business or principally engaged in the
14 conduct of two or more such businesses and which has not made the
15 election provided for in subdivision ten of section one hundred eighty-
16 three of this article, and except a corporation, joint-stock company or
17 association principally engaged in the conduct of aviation (including
18 air freight forwarders acting as principal and like indirect air carri-
19 ers) and except a corporation principally engaged in providing telecom-
20 munication services between aircraft and dispatcher, aircraft and air
21 traffic control or ground station and ground station (or any combination
22 of the foregoing), at least ninety percent of the voting stock of which
23 corporation is owned, directly or indirectly, by air carriers and which
24 corporation's principal function is to fulfill the requirements of (i)
25 the federal aviation administration (or the successor thereto) or (ii)
26 the international civil aviation organization (or the successor there-
27 to), relating to the existence of a communication system between
28 aircraft and dispatcher, aircraft and air traffic control or ground
104 12026-02-1
1 station and ground station (or any combination of the foregoing) for the
2 purposes of air safety and navigation and except a corporation, joint-
3 stock company or association which is liable to taxation under section
4 one hundred eighty-six of this article or article thirty-two of this
5 chapter, shall pay for the privilege of exercising its corporate fran-
6 chise, or of doing business, or of employing capital, or of owning or
7 leasing property in the metropolitan commuter transportation district in
8 such corporate or organized capacity, or of maintaining an office in
9 such district, a tax surcharge for all or any part of its taxable years
10 commencing on or after January first, nineteen hundred eighty-two, but
11 ending before December thirty-first, two thousand one five, which tax
12 surcharge, in addition to the tax imposed by section one hundred eight-
13 y-four of this article, shall be computed at the rate of eighteen per
14 centum of the tax imposed under such section one hundred eighty-four for
15 such taxable years or any part of such taxable years ending before
16 December thirty-first, nineteen hundred eighty-three after the deduction
17 of any credits otherwise allowable under this article, and at the rate
18 of seventeen per centum of the tax imposed under such section for such
19 taxable years or any part of such taxable years ending on or after
20 December thirty-first, nineteen hundred eighty-three after the deduction
21 of any credits otherwise allowable under this article; provided, howev-
22 er, that such rates of tax surcharge shall be applied only to that
23 portion of the tax imposed under section one hundred eighty-four of this
24 article after the deduction of any credits otherwise allowable under
25 this article which is attributable to the taxpayer's business activity
26 carried on within the metropolitan commuter transportation district; and
27 provided, further, that the tax surcharge imposed by this section on
28 corporations, joint-stock companies and associations formed for or prin-
105 12026-02-1
1 cipally engaged in the conduct of telephone or telegraph business shall
2 be computed in accordance with this subdivision and paragraph (c) of
3 subdivision two of this section as if the three-quarters of one per
4 centum rate of tax provided for in subdivision one of section one
5 hundred eighty-four of this article were applicable to such telephone
6 and telegraph businesses for taxable years commencing on or after Janu-
7 ary first, nineteen hundred eighty-five and ending on or before December
8 thirty-first, nineteen hundred eighty-nine; and provided, further, that
9 the tax surcharge imposed by this section shall not be imposed upon any
10 taxpayer for more than two hundred twenty-eight seventy-six months.
11 Provided, however, that for taxable years beginning in two thousand and
12 thereafter, for purposes of this subdivision the tax imposed under
13 section one hundred eighty-four of this article shall be deemed to have
14 been imposed at the rate of three-quarters of one percent, except that
15 in the case of a corporation, joint-stock company or association which
16 has made an election pursuant to subdivision ten of section one hundred
17 eighty-three of this article, for purposes of this subdivision the tax
18 imposed under section one hundred eighty-four of this article shall be
19 deemed to have been imposed at the rate of six-tenths of one percent.
20 The term "local telephone business" shall have the same meaning as
21 such term is used in section one hundred eighty-four of this article.
22 The term "telecommunication services" shall have the meaning ascribed to
23 such term in section one hundred eighty-six-e of this article.
24 § 3. Subdivision 1 of section 186-c of the tax law, as amended by
25 section 123 of part A of chapter 389 of the laws of 1997, and paragraph
26 (a) as amended by section 5 of part Y of chapter 63 of the laws of 2000,
27 is amended to read as follows:
106 12026-02-1
1 1. (a) (1) Every utility doing business in the metropolitan commuter
2 transportation district shall pay a tax surcharge, in addition to the
3 tax imposed by section one hundred eighty-six-a of this article, for all
4 or any parts of its taxable years commencing on or after January first,
5 nineteen hundred eighty-two but ending before December thirty-first, two
6 thousand one five, to be computed at the rate of eighteen per centum
7 of the tax imposed under section one hundred eighty-six-a of this arti-
8 cle for such taxable years or any part of such taxable years ending
9 before December thirty-first, nineteen hundred eighty-three after the
10 deduction of any credits otherwise allowable under this article, and at
11 the rate of seventeen per centum of the tax imposed under such section
12 for such taxable years or any part of such taxable years ending on or
13 after December thirty-first, nineteen hundred eighty-three after the
14 deduction of credits otherwise allowable under this article except any
15 utility credit provided for by article thirteen-A of this chapter;
16 provided, however, that such rates of tax surcharge shall be applied
17 only to that portion of the tax imposed under section one hundred eight-
18 y-six-a of this article after the deduction of credits otherwise allow-
19 able under this article, except any utility credit provided for by arti-
20 cle thirteen-A of this chapter, which is attributable to the taxpayer's
21 gross income or gross operating income from business activity carried on
22 within the metropolitan commuter transportation district; and provided,
23 further, that the tax surcharge imposed by this section shall not be
24 imposed upon any taxpayer for more than two hundred twenty-eight
25 seventy-six months.
26 (2) Provided however, that commencing January first, two thousand, in
27 the case of the tax imposed under paragraph (a) of subdivision one of
28 section one hundred eighty-six-a of this article (relating to providers
107 12026-02-1
1 of telecommunications services) such tax surcharge shall be calculated
2 as if the tax imposed under section one hundred eighty-six-a of this
3 article were imposed at a rate of three and one-half percent.
4 (b) In addition to the surcharge imposed by subdivision (a) of this
5 section, there is hereby imposed a surcharge on the gross receipts from
6 telecommunication services relating to the metropolitan commuter trans-
7 portation district at the rate of seventeen percent of the state tax
8 rate under section one hundred eighty-six-e of this article for all or
9 part of taxable years commencing on and after January first, nineteen
10 hundred ninety-five but ending before December thirty-first, two thou-
11 sand one five. All the definitions and other provisions of section one
12 hundred eighty-six-e of this article shall apply to the tax imposed by
13 this paragraph with such modification and limitation as may be necessary
14 (including substituting the words "metropolitan commuter transportation
15 district" for "state" where appropriate) in order to adapt the language
16 of such section one hundred eighty-six-e of this article to the
17 surcharge imposed by this paragraph within such metropolitan commuter
18 transportation district so as to include (1) any intra-district telecom-
19 munication services, (2) any inter-district telecommunication services
20 which originate or terminate in such district and are charged to a
21 service address therein regardless of where the amounts charged for such
22 services are billed or ultimately paid, and (3) as apportioned to such
23 district, private telecommunication services. Provided however, commenc-
24 ing October first, nineteen hundred ninety-eight such tax surcharge
25 shall be calculated as if the tax imposed under section one hundred
26 eighty-six-e of this article were imposed at a rate of three and one-
27 half percent.
108 12026-02-1
1 § 4. Subdivision 1 of section 189-a of the tax law, as amended by
2 chapter 59 of the laws of 1997, is amended to read as follows:
3 1. Every gas importer importing or causing gas service to be imported
4 into the state for its own use or consumption in the metropolitan commu-
5 ter transportation district shall pay a tax surcharge, in addition to
6 the tax imposed by section one hundred eighty-nine of this article, for
7 all or any part of its taxable months commencing on or after August
8 first, nineteen hundred ninety-one and ending on or before June thirti-
9 eth, two thousand one five, to be computed at the rate of seventeen
10 percent of the tax imposed under such section with respect to gas
11 service imported or caused to be imported into the state for consumption
12 in the metropolitan commuter transportation district.
13 § 5. Subdivision 1 of section 209-B of the tax law, as amended by
14 section 8-a of part A of chapter 56 of the laws of 1998, is amended to
15 read as follows:
16 1. For the privilege of exercising its corporate franchise, or of
17 doing business, or of employing capital, or of owning or leasing proper-
18 ty in a corporate or organized capacity, or of maintaining an office in
19 the metropolitan commuter transportation district, for all or any part
20 of its taxable year, there is hereby imposed on every corporation, other
21 than a New York S corporation, subject to tax under section two hundred
22 nine of this article, or any receiver, referee, trustee, assignee or
23 other fiduciary, or any officer or agent appointed by any court, who
24 conducts the business of any such corporation, for the taxable years
25 commencing on or after January first, nineteen hundred eighty-two but
26 ending before December thirty-first, two thousand one five, a tax
27 surcharge, in addition to the tax imposed under section two hundred nine
28 of this article, to be computed at the rate of eighteen per centum of
109 12026-02-1
1 the tax imposed under such section two hundred nine for such taxable
2 years or any part of such taxable years ending before December thirty-
3 first, nineteen hundred eighty-three after the deduction of any credits
4 otherwise allowable under this article, and at the rate of seventeen per
5 centum of the tax imposed under such section for such taxable years or
6 any part of such taxable years ending on or after December thirty-first,
7 nineteen hundred eighty-three after the deduction of any credits other-
8 wise allowable under this article; provided, however, that such rates of
9 tax surcharge shall be applied only to that portion of the tax imposed
10 under section two hundred nine of this article after the deduction of
11 any credits otherwise allowable under this article which is attributable
12 to the taxpayer's business activity carried on within the metropolitan
13 commuter transportation district; and provided, further, that the tax
14 surcharge imposed by this section shall not be imposed upon any taxpayer
15 for more than two hundred twenty-eight seventy-six months. Provided
16 however, that for taxable years commencing on or after July first, nine-
17 teen hundred ninety-eight, such surcharge shall be calculated as if the
18 tax imposed under section two hundred ten of this article were imposed
19 under the law in effect for taxable years commencing on or after July
20 first, nineteen hundred ninety-seven and before July first, nineteen
21 hundred ninety-eight.
22 § 6. Subsection 1 of section 1455-B of the tax law, as amended by
23 section 2 of part O of chapter 407 of the laws of 1999, is amended to
24 read as follows:
25 1. For the privilege of exercising its franchise or doing business in
26 the metropolitan commuter transportation district in a corporate or
27 organized capacity, there is hereby imposed on every taxpayer subject to
28 tax under this article, other than a New York S corporation, for the
110 12026-02-1
1 taxable years commencing on or after January first, nineteen hundred
2 eighty-two but ending before December thirty-first, two thousand one
3 five, a tax surcharge, in addition to the tax imposed under section
4 fourteen hundred fifty-one of this article, at the rate of eighteen per
5 centum of the tax imposed under such section fourteen hundred fifty-one
6 of this article, for such taxable years or any part of such taxable
7 years ending before December thirty-first, nineteen hundred eighty-three
8 after the deduction of any credits otherwise allowable under this arti-
9 cle, and at the rate of seventeen per centum of the tax imposed under
10 such section for such taxable years or any part of such taxable years
11 ending on or after December thirty-first, nineteen hundred eighty-three
12 after the deduction of any credits otherwise allowable under this arti-
13 cle; provided however, that such rates of tax surcharge shall be applied
14 only to that portion of the tax imposed under section fourteen hundred
15 fifty-one of this article after the deduction of any credits otherwise
16 allowable under this article which is attributable to the taxpayer's
17 business activity carried on within the metropolitan commuter transpor-
18 tation district; and provided, further, that the tax surcharge imposed
19 by this section shall not be imposed upon any taxpayer for more than two
20 hundred twenty-eight seventy-six months. Provided however, that for
21 taxable years commencing on or after July first, two thousand, such
22 surcharge shall be calculated as if the rate of the basic tax computed
23 under subsection (a) of section fourteen hundred fifty-five of this
24 article was nine percent.
25 § 7. Subdivision (a) of section 1505-a of the tax law, as amended by
26 section 6 of part O of chapter 407 of the laws of 1999, is amended to
27 read as follows:
111 12026-02-1
1 (a) Every domestic insurance corporation and every foreign or alien
2 insurance corporation, and every life insurance corporation described in
3 subdivision (b) of section fifteen hundred one of this article, for the
4 privilege of exercising its corporate franchise, or of doing business,
5 or of employing capital, or of owning or leasing property in the metro-
6 politan commuter transportation district in a corporate or organized
7 capacity, or of maintaining an office in the metropolitan commuter
8 transportation district, for all or any part of its taxable years
9 commencing on or after January first, nineteen hundred eighty-two, but
10 ending before December thirty-first, two thousand one five, except
11 corporations specified in subdivision (c) of section fifteen hundred
12 twelve of this article, shall annually pay, in addition to the taxes
13 imposed by sections fifteen hundred one and fifteen hundred ten of this
14 article as limited by section fifteen hundred five of this article, a
15 tax surcharge on the taxes imposed under sections fifteen hundred one
16 and fifteen hundred ten of this article as limited by section fifteen
17 hundred five of this article after the deduction of any credits other-
18 wise allowable under this article as allocated to such district. Such
19 taxes shall be allocated to such district for purposes of computing such
20 tax surcharge by applying the methodology, procedures and computations
21 set forth in subdivisions (a) and (b) of section fifteen hundred four of
22 this article, except that references to terms denoting New York premi-
23 ums, and total wages, salaries, personal service compensation and
24 commissions within New York shall be read as denoting within the metro-
25 politan commuter transportation district and terms denoting total premi-
26 ums and total wages, salaries, personal service compensation and commis-
27 sions shall be read as denoting within the state. If it shall appear to
28 the commissioner that the application of the methodology, procedures and
112 12026-02-1
1 computations set forth in such subdivisions (a) and (b) does not proper-
2 ly reflect the activity, business or income of a taxpayer within the
3 metropolitan commuter transportation district, then the commissioner
4 shall be authorized, in the commissioner's discretion, to adjust such
5 methodology, procedures and computations for the purpose of allocating
6 such taxes by:
7 (1) excluding one or more factors therein;
8 (2) including one or more other factors therein, such as expenses,
9 purchases, receipts other than premiums, real property or tangible
10 personal property; or
11 (3) any other similar or different method which allocates such taxes
12 by attributing a fair and proper portion of such taxes to the metropol-
13 itan commuter transportation district. The commissioner from time to
14 time shall publish all rulings of general public interest with respect
15 to any application of the provisions of the preceding sentence. The
16 commissioner may promulgate rules and regulations to further implement
17 the provisions of this section. Such tax surcharge shall be computed at
18 the rate of eighteen per centum of the taxes imposed under sections
19 fifteen hundred one and fifteen hundred ten of this article as limited
20 by section fifteen hundred five of this article, as allocated to such
21 district, for such taxable years or any part of such taxable years
22 ending before December thirty-first, nineteen hundred eighty-three after
23 the deduction of any credits otherwise allowable under this article, and
24 at the rate of seventeen per centum of the taxes imposed under such
25 sections as limited by section fifteen hundred five of this article, as
26 allocated to such district, for such taxable years or any part of such
27 taxable years ending on or after December thirty-first, nineteen hundred
28 eighty-three after the deduction of any credits otherwise allowable
113 12026-02-1
1 under this article; provided, however, that the tax surcharge imposed by
2 this section shall not be imposed upon any taxpayer for more than two
3 hundred twenty-eight seventy-six months. Provided however, that for
4 taxable years commencing on or after July first, two thousand, such
5 surcharge shall be calculated as if (i) the rate of the tax computed
6 under paragraph one of subdivision (a) of section fifteen hundred two of
7 this article was nine percent and (ii) the rate of the limitation on tax
8 set forth in section fifteen hundred five of this article for domestic,
9 foreign and alien insurance corporations except life insurance corpo-
10 rations was two and six-tenths percent.
11 § 8. No addition to tax under subsection (c) of section 1085 of the
12 tax law shall be imposed with respect to required declarations or
13 payments of estimated tax surcharge under sections 184-a, 186-c, 209-B,
14 1455-B and 1505-a of the tax law with respect to declarations otherwise
15 required to be filed and payments otherwise required to be made by
16 reason of sections two, three, and five through seven of this act, prior
17 to June 15, 2001, provided that the taxpayer files such declarations and
18 makes such payments as well as all other such payments due by such due
19 date, no later than the first date following May 15, 2001, on which an
20 installment of estimated tax surcharge is required to be paid.
21 § 9. This act shall take effect immediately; provided, however, that
22 the amendments to subdivision 1 of section 189-a of the tax law made by
23 section four of this act shall not affect the repeal of such section and
24 shall be deemed repealed therewith.
25 PART J
114 12026-02-1
1 Section 1. Section 51 of chapter 298 of the laws of 1985, amending the
2 tax law relating to the franchise tax on banking corporations imposed by
3 the tax law, authorized to be imposed by any city having a population of
4 one million or more by chapter 772 of the laws of 1966 and imposed by
5 the administrative code of the city of New York and relating to other
6 provisions of the tax law, chapter 883 of the laws of 1975 and the
7 administrative code of the city of New York which relates to such fran-
8 chise tax, as amended by chapter 59 of the laws of 1997, is amended to
9 read as follows:
10 § 51. This act shall take effect immediately and shall apply to taxa-
11 ble years beginning on or after January 1, 1985, except that:
12 (a) sections one through eight shall not apply to taxable years begin-
13 ning on or after January 1, 2001 2002;
14 (b) sections nine, twelve, the amendment made to paragraph 9 of
15 subsection (a) of section 1452 of the tax law by section thirteen,
16 sections fifteen, sixteen, eighteen, nineteen, twenty, twenty-three,
17 twenty-seven, thirty and thirty-two, the amendment made to paragraph 9
18 of subdivision (a) of section 11-640 of the administrative code of the
19 city of New York by section thirty-three, sections thirty-five, thirty-
20 six, thirty-eight, thirty-nine, forty, and forty-five shall not apply to
21 corporations other than savings banks and savings and loan associations
22 for taxable years beginning on or after January 1, 2001 2002;
23 (c) sections twenty-one, twenty-two, twenty-four, forty-one and
24 forty-two shall not apply to corporations other than savings banks and
25 savings and loan associations for taxable years beginning on or after
26 January 1, 2001 2002, provided, however, that the provisions of such
27 sections which relate to the alternative minimum tax measured by taxable
115 12026-02-1
1 assets shall continue to apply to all taxpayers for taxable years begin-
2 ning on or after January 1, 2001 2002;
3 (d) the amendment to the section heading and the opening paragraph of
4 section 11-643.3 of the administrative code of the city of New York made
5 by section forty-three shall not apply to corporations other than
6 savings banks and savings and loan associations for taxable years begin-
7 ning on or after January 1, 2001 2002 with respect to those provisions
8 of such section 11-643.3 which relate to the basic tax measured by
9 entire net income; and
10 (e) section twenty-eight, and the addition of new section 11-643.5 of
11 the administrative code of the city of New York made by section forty-
12 four shall not apply to corporations other than savings banks and
13 savings and loan associations for taxable years beginning on or after
14 January 1, 2001 2002, provided, however, that the provisions of such
15 sections which relate to the alternative minimum taxes measured by
16 assets, issued capital stock and one hundred twenty-five dollars shall
17 continue to apply to all taxpayers for taxable years beginning on or
18 after January 1, 2001 2002.
19 § 2. Subdivisions (d) and (f) of section 110 of chapter 817 of the
20 laws of 1987, amending the tax law and the environmental conservation
21 law, constituting the business tax reform and rate reduction act of
22 1987, as amended by chapter 59 of the laws of 1997, are amended to read
23 as follows:
24 (d) The provisions of section sixty-seven except insofar as it amends
25 paragraph 10 of subsection (b) of section 1453 of the tax law, seventy-
26 one and seventy-four shall apply to taxable years beginning after Decem-
27 ber 31, 1986, provided, however, that new paragraphs 11 and 12 of
28 subsection (b) of section 1453 of the tax law as added by section
116 12026-02-1
1 sixty-seven of this act, the amendments made by section seventy-one of
2 this act, and new subsection (i) of section 1453 of the tax law as added
3 by section seventy-four of this act shall not apply to taxable years
4 beginning on or after January 1, 2001 2002;
5 (f) The provisions of section one hundred four of this act shall apply
6 to taxable years beginning after December 31, 1986, and shall not apply
7 to corporations other than savings banks and savings and loan associ-
8 ations for taxable years beginning on or after January 1, 2001 2002,
9 provided, however, that the provisions of such section which relate to
10 the alternative minimum tax measured by taxable assets shall continue to
11 apply to all taxpayers for taxable years beginning on or after January
12 1, 2001 2002.
13 § 3. Subdivisions (c) and (d) of section 68 of chapter 525 of the laws
14 of 1988, amending the tax law and the administrative code of the city of
15 New York relating to the imposition of taxes in the city of New York, as
16 amended by chapter 59 of the laws of 1997, are amended to read as
17 follows:
18 (c) The provisions of sections one, thirty-one, thirty-two, thirty-
19 three, thirty-six, thirty-seven, forty through forty-five, forty-seven
20 and forty-eight shall apply to taxable years beginning after December
21 31, 1986, provided, however, that the amendments made by sections thir-
22 ty-six and forty-one of this act, and new subdivision (i) of section
23 11-641 of the administrative code of the city of New York as added by
24 section forty-four of this act shall not apply to taxable years begin-
25 ning on or after January 1, 2001 2002;
26 (d) The provisions of section forty-six shall apply to taxable years
27 beginning after December 31, 1986, and shall not apply to corporations
28 other than savings banks and savings and loan associations of taxable
117 12026-02-1
1 years beginning on or after January 1, 2001 2002, provided, however,
2 that the provisions of such section which relate to the alternative
3 minimum tax measured by taxable assets shall continue to apply to all
4 taxpayers for taxable years beginning on or after January 1, 2001
5 2002;
6 § 4. Section 1452 of the tax law is amended by adding a new subsection
7 (i) to read as follows:
8 (i) Transitional provisions relating to the enactment and implementa-
9 tion of the federal Gramm-Leach-Bliley act. (1) Notwithstanding anything
10 to the contrary contained in this section, a corporation that was in
11 existence before January first, two thousand one and was subject to tax
12 under article nine-A of this chapter for its last taxable year beginning
13 before January first, two thousand one, shall continue to be taxable
14 under article nine-A of this chapter for all taxable years beginning on
15 or after January first, two thousand one and before January first, two
16 thousand two. The preceding sentence shall not apply to any taxable year
17 during which such corporation is a banking corporation described in
18 paragraphs one through eight of subsection (a) of this section. Notwith-
19 standing anything to the contrary contained in this section, a banking
20 corporation that was in existence before January first, two thousand one
21 and was subject to tax under this article for its last taxable year
22 beginning before January first, two thousand one, shall continue to be
23 taxable under this article for all taxable years beginning on or after
24 January first, two thousand one and before January first, two thousand
25 two.
26 For purposes of this paragraph, a corporation shall be considered to
27 be subject to tax under article nine-A of this chapter for a taxable
28 year if such corporation was not a taxpayer but was properly included in
118 12026-02-1
1 a combined report filed pursuant to section two hundred eleven of this
2 chapter for such taxable year and a corporation shall be considered to
3 be subject to tax under this article for a taxable year if such corpo-
4 ration was not a taxpayer but was properly included in a combined return
5 filed pursuant to subsection (f) or (g) of section fourteen hundred
6 sixty-two of this article for such taxable year. A corporation that was
7 in existence before January first, two thousand one but first becomes a
8 taxpayer in a taxable year beginning on or after January first, two
9 thousand one and before January first, two thousand two, shall be
10 considered for purposes of this paragraph to have been subject to tax
11 under article nine-A of this chapter for its last taxable year beginning
12 before January first, two thousand one if such corporation would have
13 been subject to tax under such article for such taxable year if it had
14 been a taxpayer during such taxable year. A corporation that was in
15 existence before January first, two thousand one but first becomes a
16 taxpayer in a taxable year beginning on or after January first, two
17 thousand one and before January first, two thousand two, shall be
18 considered for purposes of this paragraph to have been subject to tax
19 under this article for its last taxable year beginning before January
20 first, two thousand one if such corporation would have been subject to
21 tax under this article for such taxable year if it had been a taxpayer
22 during such taxable year.
23 (2) Notwithstanding anything to the contrary contained in this
24 section, a corporation formed on or after January first, two thousand
25 one and before January first, two thousand two may elect to be subject
26 to tax under this article or under article nine-A of this chapter for
27 its first taxable year beginning on or after January first, two thousand
28 one and before January first, two thousand two in which either (i)
119 12026-02-1
1 sixty-five percent or more of its voting stock is owned or controlled,
2 directly or indirectly by a financial holding company, provided the
3 corporation whose voting stock is so owned or controlled is principally
4 engaged in activities that are described in section 4(k)(4) or 4(k)(5)
5 of the federal bank holding company act of nineteen hundred fifty-six,
6 as amended and the regulations promulgated pursuant to the authority of
7 such section, or (ii) it is a financial subsidiary.
8 An election under this paragraph may not be made by a corporation
9 described in paragraphs one through eight of subsection (a) of this
10 section or in subsection (e) of this section. In addition, an election
11 under this paragraph may not be made by a corporation that is a party to
12 a reorganization, as defined in subsection (a) of section 368 of the
13 internal revenue code of 1986, as amended, of a corporation described in
14 paragraph one of this subsection if both corporations were sixty-five
15 percent or more owned or controlled, directly or indirectly, by the same
16 interests at the time of the reorganization. An election under this
17 paragraph must be made by the taxpayer on or before the due date for
18 filing its return (determined with regard to extensions of time for
19 filing) for the applicable taxable year. The election to be taxed under
20 article nine-A of this chapter shall be made by the taxpayer by filing
21 the report required pursuant to section two hundred eleven of this chap-
22 ter and the election to be taxed under this article shall be made by the
23 taxpayer by filing the return required pursuant to section fourteen
24 hundred sixty-two of this article. Any election made pursuant to this
25 paragraph shall be irrevocable and shall apply to each subsequent taxa-
26 ble year beginning on or after January first, two thousand one and
27 before January first, two thousand two, provided that the stock owner-
28 ship requirements described in subparagraph (i) of this paragraph are
120 12026-02-1
1 met or such corporation described in subparagraph (ii) of this paragraph
2 continues as a financial subsidiary.
3 (3) For purposes of this section, a financial subsidiary means a
4 corporation (i) sixty-five percent or more of whose voting stock is
5 owned or controlled, directly or indirectly by a banking corporation
6 described in paragraph one, two or three of subsection (a) of this
7 section and (ii) is described in section 5136A(g) of the revised stat-
8 utes of the United States or section 46 of the federal deposit insurance
9 act. For purposes of this article, the term "banking corporation" shall
10 include a corporation electing to be taxed under this article pursuant
11 to paragraph two of this subsection for so long as such election shall
12 be in effect.
13 § 5. Paragraph 2 of subsection (f) of section 1462 of the tax law is
14 amended by adding a new subparagraph (v) to read as follows:
15 (v)(A) Notwithstanding any provision of this paragraph, any bank hold-
16 ing company which during a taxable year beginning on or after January
17 first, two thousand one and before January first, two thousand two (I)
18 is exercising its corporate franchise or doing business in the state,
19 and (II) registers for the first time during such taxable year under the
20 federal bank holding company act, as amended, and also elects to be a
21 financial holding company, may make a return on a combined basis without
22 seeking the permission of the commissioner for such taxable year or for
23 any subsequent taxable year beginning on or after January first, two
24 thousand one and before January first, two thousand two with any banking
25 corporation sixty-five percent or more of whose voting stock is owned or
26 controlled, directly or indirectly, by such bank holding company,
27 provided such banking corporation is exercising its corporate franchise
28 or doing business in the state in a corporate or organized capacity.
121 12026-02-1
1 (B) Notwithstanding any provision of this paragraph, the commissioner
2 may not require a bank holding company which, during a taxable year
3 beginning on or after January first, two thousand one and before January
4 first, two thousand two, registers for the first time during such taxa-
5 ble year under the federal bank holding company act, as amended, and
6 also elects to be a financial holding company, to make a return on a
7 combined basis for any taxable year beginning on or after January first,
8 two thousand one and before January first, two thousand two with a bank-
9 ing corporation sixty-five percent or more of whose voting stock is
10 owned or controlled, directly or indirectly, by such bank holding compa-
11 ny.
12 § 6. Section 11-640 of the administrative code of the city of New York
13 is amended by adding a new subdivision (h) to read as follows:
14 (h) Transitional provisions relating to the enactment and implementa-
15 tion of the federal Gramm-Leach-Bliley act. (1) Notwithstanding anything
16 to the contrary contained in this section, a corporation that was in
17 existence before January first, two thousand one and was subject to tax
18 under subchapter two of this chapter for its last taxable year beginning
19 before January first, two thousand one, shall continue to be taxable
20 under subchapter two of this chapter for all taxable years beginning on
21 or after January first, two thousand one and before January first, two
22 thousand two. The preceding sentence shall not apply to any taxable year
23 during which such corporation is a banking corporation described in
24 paragraphs one through eight of subdivision (a) of this section.
25 Notwithstanding anything to the contrary contained in this section, a
26 banking corporation that was in existence before January first, two
27 thousand one and was subject to tax under this subchapter for its last
28 taxable year beginning before January first, two thousand one, shall
122 12026-02-1
1 continue to be taxable under this subchapter for all taxable years
2 beginning on or after January first, two thousand one and before January
3 first, two thousand two.
4 For purposes of this paragraph, a corporation shall be considered to
5 be subject to tax under subchapter two of this chapter for a taxable
6 year if such corporation was not a taxpayer but was properly included in
7 a combined report filed pursuant to subdivision four of section 11-605
8 of this chapter for such taxable year and a corporation shall be consid-
9 ered to be subject to tax under this subchapter for a taxable year if
10 such corporation was not a taxpayer but was properly included in a
11 combined report filed pursuant to subdivision (f) or (g) of section
12 11-646 of this part for such taxable year. A corporation that was in
13 existence before January first, two thousand one but first becomes a
14 taxpayer in a taxable year beginning on or after January first, two
15 thousand one and before January first, two thousand two, shall be
16 considered for purposes of this paragraph to have been subject to tax
17 under subchapter two of this chapter for its last taxable year beginning
18 before January first, two thousand one if such corporation would have
19 been subject to tax under such subchapter for such taxable year if it
20 had been a taxpayer during such taxable year. A corporation that was in
21 existence before January first, two thousand one but first becomes a
22 taxpayer in a taxable year beginning on or after January first, two
23 thousand one and before January first, two thousand two, shall be
24 considered for purposes of this paragraph to have been subject to tax
25 under this subchapter for its last taxable year beginning before January
26 first, two thousand one if such corporation would have been subject to
27 tax under this subchapter for such taxable year if it had been a taxpay-
28 er during such taxable year.
123 12026-02-1
1 (2) Notwithstanding anything to the contrary contained in this
2 section, a corporation formed on or after January first, two thousand
3 one and before January first, two thousand two may elect to be subject
4 to tax under this subchapter or under subchapter two of this chapter for
5 its first taxable year beginning on or after January first, two thousand
6 one and before January first, two thousand two in which either (i)
7 sixty-five percent or more of its voting stock is owned or controlled,
8 directly or indirectly by a financial holding company, provided the
9 corporation whose voting stock is so owned or controlled is principally
10 engaged in activities that are described in section 4(k)(4) or 4(k)(5)
11 of the federal bank holding company act of nineteen hundred fifty-six,
12 as amended and the regulations promulgated pursuant to the authority of
13 such section or (ii) it is a financial subsidiary. An election under
14 this paragraph may not be made by a corporation described in paragraphs
15 one through eight of subdivision (a) of this section or in subdivision
16 (e) of this section. In addition, an election under this paragraph may
17 not be made by a corporation that is a party to a reorganization, as
18 defined in subsection (a) of section 368 of the internal revenue code of
19 1986, as amended, of a corporation described in paragraph one of this
20 subdivision if both corporations were sixty-five percent or more owned
21 or controlled, directly or indirectly by the same interests at the time
22 of the reorganization.
23 An election under this paragraph must be made by the taxpayer on or
24 before the due date for filing its return (determined with regard to
25 extensions of time for filing) for the applicable taxable year. The
26 election to be taxed under subchapter two of this chapter shall be made
27 by the taxpayer by filing the return required pursuant to subdivision
28 one of section 11-605 of this chapter and the election to be taxed under
124 12026-02-1
1 this subchapter shall be made by the taxpayer by filing the return
2 required pursuant to subdivision (a) of section 11-646 of this part. Any
3 election made pursuant to this paragraph two shall be irrevocable and
4 shall apply to each subsequent taxable year beginning on or after Janu-
5 ary first, two thousand one and before January first, two thousand two,
6 provided that the stock ownership requirements described in subparagraph
7 (i) of this paragraph are met or such corporation described in subpara-
8 graph (ii) of this paragraph continues as a financial subsidiary.
9 (3) For purposes of this section, a financial subsidiary means a
10 corporation (i) sixty-five percent or more of whose voting stock is
11 owned or controlled, directly or indirectly by a banking corporation
12 described in paragraph one, two or three of subdivision (a) of this
13 section and (ii) is described in section 5136A(g) of the revised stat-
14 utes of the United States or section 46 of the federal deposit insurance
15 act. For purposes of this subchapter, the term "banking corporation"
16 shall include a corporation electing to be taxed under this subchapter
17 pursuant to paragraph two of this subdivision for so long as such
18 election shall be in effect.
19 § 7. Paragraph 2 of subdivision (f) of section 11-646 of the adminis-
20 trative code of the city of New York is amended by adding a new subpara-
21 graph (v) to read as follows:
22 (v)(A) Notwithstanding any provision of this paragraph, any bank hold-
23 ing company which during a taxable year beginning on or after January
24 first, two thousand one and before January first, two thousand two (I)
25 is exercising its corporate franchise or doing business in the city, and
26 (II) registers for the first time during such taxable year under the
27 federal bank holding company act, as amended, and also elects to be a
28 financial holding company, may make a return on a combined basis without
125 12026-02-1
1 seeking the permission of the commissioner of finance for such taxable
2 year or for any subsequent taxable year beginning on or after January
3 first, two thousand one and before January first, two thousand two with
4 any banking corporation sixty-five percent or more of whose voting stock
5 is owned or controlled, directly or indirectly, by such bank holding
6 company, provided such banking corporation is exercising its corporate
7 franchise or doing business in the city in a corporate or organized
8 capacity.
9 (B) Notwithstanding any provision of this paragraph, the commissioner
10 of finance may not require a bank holding company which, during a taxa-
11 ble year beginning on or after January first, two thousand one and
12 before January first, two thousand two, registers for the first time
13 during such taxable year under the federal bank holding company act, as
14 amended, and also elects to be a financial holding company, to make a
15 return on a combined basis for any taxable year beginning on or after
16 January first, two thousand one and before January first, two thousand
17 two with a banking corporation sixty-five percent or more of whose
18 voting stock is owned or controlled, directly or indirectly, by such
19 bank holding company.
20 § 8. This act shall take effect immediately; provided, however, that
21 sections four through seven of this act shall apply to taxable years
22 beginning on or after January 1, 2001.
23 PART K
24 Section 1. Section 1 of part J of chapter 405 of the laws of 1999
25 amending the real property tax law relating to improving the adminis-
26 tration of the school tax relief (STAR) program and other laws, as
126 12026-02-1
1 amended by chapter 414 of the laws of 1999, is amended to read as
2 follows:
3 Section 1. Notwithstanding the provisions of article 5 of the general
4 construction law, the provisions of the tax law amended by sections
5 94-a, 94-d and 94-g of chapter 2 of the laws of 1995 are hereby revived
6 and shall continue in full force and effect as they existed on March 31,
7 1999 until March 31, 2001, when upon such date they shall expire and be
8 repealed . Sections 1, 2, 3, 4, and 5, and such part of section 10 of
9 chapter 336 of the laws of 1999 as relates to providing for the effec-
10 tiveness of such sections 1, 2, 3, 4 and 5 shall be nullified in effect
11 on the effective date of this section, except that the amendments made
12 to: paragraph (2) of subdivision a of section 1612 of the tax law by
13 such section 1; and subdivision b of section 1612 of the tax law by such
14 section 2; and the repeal of section 152 of chapter 166 of the laws of
15 1991 made by such section 5 shall continue to remain in effect.
16 § 2. This act shall take effect immediately.
17 PART L
18 Section 1. The opening paragraph of subdivision a of section 1604 of
19 the tax law, as amended by chapter 913 of the laws of 1977, is amended
20 to read as follows:
21 In addition to the powers and duties provided in other sections of
22 this article, the division shall have the power and it shall be its duty
23 to operate and administer the lottery within the state including any
24 lottery for the support of winter sports physical education in commem-
25 oration of the XIII winter olympic games joint, multi-jurisdiction, and
26 out-of-state lottery in cooperation with a government-authorized lottery
127 12026-02-1
1 of one or more other jurisdictions, and to promulgate rules and regu-
2 lations governing the establishment and operation thereof, including but
3 not limited to the following:
4 § 2. Paragraph 3 of subdivision a of section 1612 of the tax law, as
5 amended by chapter 2 of the laws of 1995, is amended to read as follows:
6 (3) fifty percent of the total amount for which tickets have been sold
7 for games known as: (A) the "Daily Numbers Game" or "Win 4", discrete
8 games in which the participants select no more than three or four of
9 their own numbers to match with three or four numbers drawn by the divi-
10 sion for purposes of determining winners of such games, (B) "Pick 10",
11 offered no more than once daily, in which participants select from a
12 specified field of numbers a subset of ten numbers to match against a
13 subset of numbers to be drawn by the division from such field of numbers
14 for the purpose of determining winners of such game, and (C) "Take 5",
15 offered no more than once daily, in which participants select from a
16 specified field of numbers a subset of five numbers to match against a
17 subset of five numbers to be drawn by the division from such field of
18 numbers for purposes of determining winners of such game, and (D) any
19 joint, multi-jurisdiction, and out-of-state lottery game; or
20 § 3. Section 1617 of the tax law is REPEALED and a new section 1617 is
21 added to read as follows:
22 § 1617. Joint, multi-jurisdiction, and out-of-state lottery. The
23 director may enter into an agreement with a government-authorized
24 lottery of one or more other jurisdictions providing for the operation
25 and administration of a joint, multi-jurisdiction, and out-of-state
26 lottery. Such a joint, multi-jurisdiction, and out-of-state lottery may
27 include a combined drawing, a combined prize pool, the transfer of sales
28 and prize monies to other jurisdictions as may be necessary, and such
128 12026-02-1
1 other cooperative arrangements as the director deems necessary or desir-
2 able.
3 § 4. This act shall take effect immediately.
4 PART M
5 Section 1. Paragraphs 1 and 2 of subsection (t) of section 606 of the
6 tax law, as added by section 1 of part DD of chapter 63 of the laws of
7 2000, are amended to read as follows:
8 (1) General. A resident taxpayer shall be allowed the option of claim-
9 ing a credit, to be computed as provided in paragraph four of this
10 subsection, against the tax imposed by this article, or an itemized
11 deduction, to be computed as provided in paragraph four of subdivision
12 subsection (d) of section six hundred fifteen of this article, for
13 allowable college tuition expenses.
14 (2) Allowable and qualified college tuition expenses. For the purposes
15 of this credit and the itemized deduction provided by paragraph four of
16 subdivision subsection (d) of section six hundred fifteen of this
17 article , :
18 (A) the The term "allowable college tuition expenses" shall mean the
19 amount of qualified college tuition expenses of eligible students paid
20 by the taxpayer during the taxable year, limited to ten thousand
21 dollars , and (B) the for each such student. In the case of a husband
22 and wife, such limitation shall be divided between them equally or in
23 such manner as they both may elect.
24 (B) The term "eligible student" shall mean the taxpayer, the taxpay-
25 er's spouse, and any dependent of the taxpayer with respect to whom the
129 12026-02-1
1 taxpayer is allowed an exemption under section six hundred sixteen of
2 this article for the taxable year.
3 (C) The term "qualified college tuition expenses" shall mean the
4 tuition required for the enrollment or attendance of the taxpayer, the
5 taxpayer's spouse, or a dependent of the taxpayer with respect to whom
6 the taxpayer is allowed an exemption under section six hundred sixteen
7 of this article, an eligible student at an institution of higher educa-
8 tion. Provided, however, tuition payments made pursuant to the receipt
9 of any scholarships or financial aid, or tuition required for enrollment
10 or attendance in a course of study leading to the granting of a post
11 baccalaureate or other graduate degree, shall be excluded from the defi-
12 nition of "qualified college tuition expenses".
13 (D) Expenses paid by dependent. If an exemption under section six
14 hundred sixteen of this article with respect to an individual is allowed
15 to another taxpayer for a taxable year beginning in the calendar year in
16 which such individual's taxable year begins,
17 (i) no credit under this subsection or deduction under paragraph four
18 of subsection (d) of section six hundred fifteen of this article shall
19 be allowed to such individual for such individual's taxable year, and
20 (ii) for purposes of such credit or deduction, qualified college
21 tuition expenses paid by such individual during such individual's taxa-
22 ble year shall be treated as paid by such other taxpayer.
23 § 2. Subdivision (d) of section 11-1715 of the administrative code of
24 the city of New York is amended by adding a new paragraph 4 to read as
25 follows:
26 (4) allowable college tuition expenses, as defined in paragraph two of
27 subsection (t) of section six hundred six of the tax law, multiplied by
28 the applicable percentage. Such applicable percentage shall be twenty-
130 12026-02-1
1 five percent for taxable years beginning in two thousand one, fifty
2 percent for taxable years beginning in two thousand two, seventy-five
3 percent for taxable years beginning in two thousand three and one
4 hundred percent for taxable years beginning after two thousand three.
5 Provided, however, no deduction shall be allowed under this paragraph to
6 a taxpayer who claims the credit provided under subsection (t) of
7 section six hundred six of the tax law.
8 § 3. This act shall take effect immediately and shall apply to taxa-
9 ble years beginning on or after January 1, 2001.
10 PART N
11 Section 1. Subdivision (p) of section 406 of chapter 166 of the laws
12 of 1991, amending the tax law and other laws relating to taxes, as
13 amended by chapter 452 of the laws of 1999, is amended to read as
14 follows:
15 (p) The amendments to section 1809 of the vehicle and traffic law made
16 by sections three hundred thirty-seven and three hundred thirty-eight of
17 this act shall not apply to any offense committed prior to such effec-
18 tive date; provided, further, that section three hundred forty-one of
19 this act shall take effect immediately and shall expire November 1, 1993
20 at which time it shall be deemed repealed; sections three hundred
21 forty-five and three hundred forty-six of this act shall take effect
22 July 1, 1991; sections three hundred fifty-five, three hundred fifty-
23 six, three hundred fifty-seven and three hundred fifty-nine of this act
24 shall take effect immediately and shall expire June 30, 1995 and shall
25 revert to and be read as if this act had not been enacted; section three
26 hundred fifty-eight of this act shall take effect immediately and shall
131 12026-02-1
1 expire June 30, 1998 and shall revert to and be read as if this act had
2 not been enacted; section three hundred sixty-four through three hundred
3 sixty-seven of this act shall apply to claims filed on or after such
4 effective date; sections three hundred sixty-nine, three hundred seven-
5 ty-two, three hundred seventy-three, three hundred seventy-four, three
6 hundred seventy-five and three hundred seventy-six of this act shall
7 remain in effect until November 1, 2001, at which time they shall be
8 deemed repealed; provided, however, that the mandatory surcharge
9 provided in section three hundred seventy-four of this act shall apply
10 to parking violations occurring on or after said effective date; and
11 provided further that the amendments made to section 235 of the vehicle
12 and traffic law by section three hundred seventy-two of this act, the
13 amendments made to section 1809 of the vehicle and traffic law by
14 sections three hundred thirty-seven and three hundred thirty-eight of
15 this act and the amendments made to section 215-a of the labor law by
16 section three hundred seventy-five of this act shall expire on November
17 1, 2001 and upon such date the provisions of such subdivisions and
18 sections shall revert to and be read as if the provisions of this act
19 had not been enacted; the amendments to subdivisions 2 and 3 of section
20 400.05 of the penal law made by sections three hundred seventy-seven and
21 three hundred seventy-eight of this act shall expire on July 1, 1992 and
22 upon such date the provisions of such subdivisions shall revert and
23 shall be read as if the provisions of this act had not been enacted; the
24 state board of law examiners shall take such action as is necessary to
25 assure that all applicants for examination for admission to practice as
26 an attorney and counsellor at law shall pay the increased examination
27 fee provided for by the amendment made to section 465 of the judiciary
28 law by section three hundred eighty of this act for any examination
132 12026-02-1
1 given on or after the effective date of this act notwithstanding that an
2 applicant for such examination may have prepaid a lesser fee for such
3 examination as required by the provisions of such section 465 as of the
4 date prior to the effective date of this act; the provisions of section
5 306-a of the civil practice law and rules as added by section three
6 hundred eighty-one of this act shall apply to all actions pending on or
7 commenced on or after September 1, 1991, provided, however, that for the
8 purposes of this section service of such summons made prior to such date
9 shall be deemed to have been completed on September 1, 1991; the
10 provisions of section three hundred eighty-three of this act shall apply
11 to all money deposited in connection with a cash bail or a partially
12 secured bail bond on or after such effective date; and the provisions of
13 sections three hundred eighty-four and three hundred eighty-five of this
14 act shall apply only to jury service commenced during a judicial term
15 beginning on or after the effective date of this act; provided, however,
16 that nothing contained herein shall be deemed to affect the application,
17 qualification, expiration or repeal of any provision of law amended by
18 any section of this act and such provisions shall be applied or quali-
19 fied or shall expire or be deemed repealed in the same manner, to the
20 same extent and on the same date as the case may be as otherwise
21 provided by law;
22 § 2. Subdivision 8 of section 1809 of the vehicle and traffic law is
23 REPEALED.
24 § 3. This act shall take effect April 1, 2001.
25 PART O
133 12026-02-1
1 Section 1. Section 470 of the tax law is amended by adding a new
2 subdivision 14 to read as follows:
3 14. "Moist snuff" means any finely cut and ground tobacco that is
4 intended to be placed in the mouth.
5 § 2. Subdivision 1 of section 471-b of the tax law, as amended by
6 chapter 57 of the laws of 1993, is amended to read as follows:
7 1. There is hereby imposed and shall be paid a tax on all tobacco
8 products possessed in this state by any person for sale, except that no
9 tax shall be imposed on tobacco products sold under such circumstances
10 that this state is without power to impose such tax, or sold to the
11 United States, or sold to or by a voluntary unincorporated organization
12 of the armed forces of the United States operating a place for the sale
13 of goods pursuant to regulations promulgated by the appropriate execu-
14 tive agency of the United States, to the extent provided in such regu-
15 lations and policy statements of such an agency applicable to such
16 sales. Such tax on tobacco products shall be imposed as follows: (a) on
17 tobacco products other than moist snuff, such tax shall be at the rate
18 of twenty percent of the wholesale price, or (b) on moist snuff, such
19 tax shall be at the rate of thirty-nine cents per ounce. Such tax on
20 tobacco products and is intended to be imposed only once upon the sale
21 of any tobacco products. It shall be presumed that all tobacco products
22 within the state are subject to tax until the contrary is established,
23 and the burden of proof that any tobacco products are not taxable here-
24 under shall be upon the person in possession thereof.
25 § 3. Subdivision 1 of section 471-c of the tax law, as amended by
26 chapter 57 of the laws of 1993, is amended to read as follows:
27 1. There is hereby imposed and shall be paid a tax on all tobacco
28 products used in the state by any person, except that no such tax shall
134 12026-02-1
1 be imposed (1) if the tax provided in section four hundred seventy-one-b
2 of this article is paid, or (2) on the use of tobacco products which are
3 exempt from the tax imposed by said section, or (3) on the use of two
4 hundred fifty cigars or less or five pounds or less of tobacco brought
5 into the state on, or in the possession of, any person. Such tax on
6 tobacco products shall be imposed as follows: (a) on tobacco products
7 other than moist snuff, such tax shall be at the rate of twenty percent
8 of the wholesale price or (b) on moist snuff, such tax shall be at the
9 rate of thirty-nine cents per ounce. Within twenty-four hours after
10 liability for the tax accrues, each such person shall file with the
11 commissioner of taxation and finance a return in such form as he the
12 commissioner may prescribe together with a remittance of the tax shown
13 to be due thereon. For purposes of this article, the word "use" means
14 the exercise of any right or power actual or constructive and shall
15 include but is not limited to the receipt, storage or any keeping or
16 retention for any length of time, but shall not include possession for
17 sale. All the other provisions of this article, if not inconsistent,
18 shall apply to the administration and enforcement of the tax imposed by
19 this section in the same manner as if the language of said provisions
20 had been incorporated in full into this section.
21 § 4. Subdivision 1 of section 473-a of the tax law, as added by chap-
22 ter 61 of the laws of 1989, is amended to read as follows:
23 1. Every distributor shall, on or before the twentieth day of each
24 month, file with the commissioner of taxation and finance a return on
25 forms to be prescribed and furnished by the commissioner, showing the
26 quantity and wholesale price of all tobacco products imported or caused
27 to be imported into the state by him such distributor or manufactured
28 in the state by him such distributor, during the preceding calendar
135 12026-02-1
1 month. For moist snuff, such return shall also include the weight in
2 ounces. Every distributor authorized by the commissioner to make returns
3 and pay the tax on tobacco products sold, shipped or delivered by him
4 such distributor to any person in the state shall file a return showing
5 the quantity and wholesale price of all tobacco products so sold,
6 shipped or delivered during the preceding calendar month. For moist
7 snuff, such return shall also include the weight in ounces. Provided,
8 however, the commissioner may, if he the commissioner deems it neces-
9 sary in order to insure the payment of the taxes imposed by this arti-
10 cle, require returns to be made at such times and covering such periods
11 as he the commissioner may deem necessary, and, by regulation, may
12 permit the filing of returns on a quarterly, semi-annual or annual
13 basis, or may waive the filing of returns by a distributor for such time
14 and upon such terms as he may deem proper if satisfied that no tax
15 imposed by this article is or will be payable by him such distributor
16 during the time for which returns are waived. Such returns shall contain
17 such further information as the commissioner may require.
18 § 5. Subdivisions 2, 3 and 4 of section 474 of the tax law, subdivi-
19 sions 2 and 3 as added and subdivision 4 as amended by chapter 61 of the
20 laws of 1989, are amended to read as follows:
21 2. Every person who shall possess or transport more than two hundred
22 fifty cigars or more than five pounds of tobacco upon the public high-
23 ways, roads or streets of the state, shall be required to have in his
24 such person's actual possession invoices or delivery tickets for such
25 tobacco products. Such invoices or delivery tickets shall show the name
26 and address of the consignor or seller, the name and address of the
27 consignee or purchaser, the quantity and brands of the tobacco products
28 transported, and the name and address of the person who has or shall
136 12026-02-1
1 assume the payment of the tax and the wholesale price or the tax paid or
2 payable. For moist snuff such invoice or delivery ticket shall also show
3 weight in ounces. The absence of such invoices or delivery tickets shall
4 be prima facie evidence that such person is a dealer in tobacco products
5 in this state and subject to the requirements of this article.
6 3. Every dealer or distributor or employee thereof, or other person
7 acting on behalf of a dealer or distributor, who shall possess or trans-
8 port more than fifty cigars or more than one pound of tobacco upon the
9 public highways, roads or streets of the state, shall be required to
10 have in his such persons' actual possession invoices or delivery tick-
11 ets for such tobacco products. Such invoices or delivery tickets shall
12 show the name and address of the consignor or seller, the name and
13 address of the consignee or purchaser, the quantity and brands of the
14 tobacco products transported, and the name and address of the person who
15 has or shall assume the payment of the tax and the wholesale price or
16 the tax paid or payable. For moist snuff such invoice or delivery ticket
17 shall also show weight in ounces. The absence of such invoices or deliv-
18 ery tickets shall be prima facie evidence that the tax imposed by this
19 article on tobacco products has not been paid and is due and owing.
20 4. At the time of delivering cigarettes to any person each agent or
21 wholesale dealer, and at the time of delivering tobacco products to any
22 person each distributor or wholesale dealer of tobacco products, shall
23 make a true duplicate invoice showing the date of delivery, the number
24 of packages and number of cigarettes contained therein, in each shipment
25 of cigarettes delivered, and the items and quantity and wholesale price
26 of each item in each shipment of tobacco products delivered, and the
27 name of the purchaser to whom delivery is made, and shall retain the
28 same for a period of three years subject to the use and inspection of
137 12026-02-1
1 the commissioner of taxation and finance . For moist snuff such invoice
2 shall also show weight in ounces. Each dealer shall procure and retain
3 invoices showing the number of packages and number of cigarettes
4 contained therein, in each shipment of cigarettes received by him such
5 dealer, and the items and quantity and wholesale price of each item in
6 each shipment of tobacco products received by him such dealer, the
7 date thereof, and the name of the shipper, and shall retain the same for
8 a period of three years subject to the use and inspection of the commis-
9 sioner of taxation and finance . For moist snuff such invoice shall
10 also show weight in ounces. The commissioner of taxation and finance
11 by regulation may provide that whenever cigarettes or tobacco products
12 are shipped into the state, the railroad company, express company,
13 trucking company or other public carrier transporting any shipment ther-
14 eof shall file with the commissioner of taxation and finance a copy of
15 the freight bill within ten days after the delivery in the state of each
16 shipment. All dealers shall maintain and keep for a period of three
17 years such other records of cigarettes or tobacco products received,
18 sold or delivered within the state as may be required by the commission-
19 er of taxation and finance . The commissioner of taxation and finance
20 is hereby authorized to examine the books, papers, invoices and other
21 records of any person in possession, control or occupancy of any prem-
22 ises where cigarettes or tobacco products are placed, stored, sold or
23 offered for sale, and the equipment of any such person pertaining to the
24 stamping of cigarettes or the sale and delivery of cigarettes or tobacco
25 products taxable under this article, as well as the stock of cigarettes
26 or tobacco products in any such premises or vehicle. To verify the accu-
27 racy of the tax imposed and assessed by this article, each such person
28 is hereby directed and required to give to the commissioner of taxation
138 12026-02-1
1 and finance or his duly authorized representatives, the means, facili-
2 ties and opportunity for such examinations as are herein provided for
3 and required.
4 § 6. This act shall take effect on the first day of the month next
5 succeeding 90 days after the date on which this act shall have become a
6 law, and shall apply to moist snuff which first becomes subject to taxa-
7 tion under article 20 of the tax law on or after such date, provided,
8 however, that any rules or regulations necessary to implement the
9 provisions of this act may be promulgated and any procedures, forms, or
10 instructions necessary for such implementation may be adopted and issued
11 on and after the date this act shall have become a law.
12 § 2. Severability clause. If any clause, sentence, paragraph, subdivi-
13 sion, section or part of this act shall be adjudged by any court of
14 competent jurisdiction to be invalid, such judgment shall not affect,
15 impair, or invalidate the remainder thereof, but shall be confined in
16 its operation to the clause, sentence, paragraph, subdivision, section
17 or part thereof directly involved in the controversy in which such judg-
18 ment shall have been rendered. It is hereby declared to be the intent of
19 the legislature that this act would have been enacted even if such
20 invalid provisions had not been included herein.
21 § 3. This act shall take effect immediately provided, however, that
22 the applicable effective date of Parts A through O of this act shall be
23 as specifically set forth in the last section of such Parts.