2000-01 Article VII Revenue Bill

                STATE OF NEW YORK
       ________________________________________________________________________

           S. 6295                                                  A. 9295

                SENATE - ASSEMBLY

                                   January 13, 2000
                                      ___________

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

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

       AN ACT to amend the tax law, the general city law and the public author-
         ities law, in relation to providing  transition  rules  for  taxpayers
         removed  from  taxation  under section 186 of the tax law by reason of
         this act, reducing  the  rate  and  measure  of  certain  taxes  under
         sections  186-a  and  189 of the tax law; and in relation to sales and
         compensating use taxes on certain utility services imposed by  article
         28 of such law and pursuant to the authority of article 29 thereof and
         repealing sections 186, 186-b, 189, 189-a and subdivision 3 of section
         192  of  the tax law relating thereto; and providing for the repeal of
         certain provisions upon expiration thereof (A); to  amend  the  public
         authorities  law,  the  economic  development  law and the tax law, in
         relation to providing additional low cost power for  upstate  economic
         development  purposes and providing a tax credit and providing for the
         repeal of certain provisions upon expiration thereof (B); to amend the
         tax law, in relation to providing credits under articles  9-A  and  22
         for  research  activities  in upstate high technology enterprise zones
         (C); to amend the tax law, in  relation  to  enhancing  the  qualified
         emerging  technology  company  employment  tax  credit and capital tax
         credit under articles 9-A and 22 thereof for taxpayers which are qual-
         ified new technology companies (D); to amend the tax law, in  relation
         to  providing  a credit under articles 9-A and 22 for interest paid on
         loans for acquisition of qualified property used in  an  upstate  high
         technology  enterprise  zone (E); to amend the tax law, in relation to
         providing a credit under articles 9-A and 22 for taxes paid on  energy
         sources  consumed  in upstate high technology enterprise zones (F); to
         amend the tax law, in relation to reducing the article 9-A corporation
         franchise tax rate on small business taxpayers and repealing the  tax,
         except  for  the fixed dollar minimum, on New York S corporations (G);
         to amend the tax law, in relation to establishing a credit,  in  arti-
         cles  9,  9-A,  22,  32 and 33 thereof, for increased urban employment

        EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD12335-02-0

       S. 6295                             2                            A. 9295

         outside of the metropolitan commuter transportation district  (H);  to
         amend  chapter  407 of the laws of 1999 amending the tax law and other
         laws relating to tax reductions and other provisions to implement  the
         1999-2000  state  fiscal plan, in relation to the effective dates of a
         provision thereof with respect to the alcoholic beverage tax  on  beer
         (I);  to  amend  the  tax law, in relation to exempting from sales and
         compensating use tax certain tangible personal property  and  services
         relating  to  services  provided by operators of internet data centers
         (J); to amend the public housing law and the tax law, in  relation  to
         providing  a  credit against the articles 9-A, 22, 32 and 33 franchise
         and income taxes for  construction  or  rehabilitation  of  low-income
         housing  (K);  to amend the tax law, in relation to allowing taxpayers
         which are biotechnology companies to claim a refund of  their  invest-
         ment  tax  credits claimed under article 9-A thereof (L); to amend the
         tax law and the education law, in relation to creating  a  tax  credit
         under the franchise and income taxes to enhance the supply of environ-
         mentally sound buildings (M); to amend the tax law and the transporta-
         tion  law,  in relation to a tax credit for transportation improvement
         contributions (N); to amend the tax  law,  in  relation  to  exempting
         certain  property  and  services  used  in farm production and certain
         horse boarding from sales and compensating use taxes imposed by  arti-
         cle  28 of such law and pursuant to the authority of article 29 there-
         of; and to repeal certain provisions of the tax law  containing  defi-
         nitions  made  obsolete  by other amendments in this act (O); to amend
         the tax law, in relation to eliminating the fixed dollar  minimum  tax
         under article 9-A of such law for certain homeowners associations (P);
         to  amend  the  tax  law,  in  relation to eliminating the minimum tax
         imposed under article 13-A of such law (Q); 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 (R);  to
         amend  the  tax  law  and  the vehicle and traffic law, in relation to
         modifying the distribution of funds from the motor  fuel  excise  tax,
         the petroleum business tax and certain motor vehicle fees to the dedi-
         cated highway and bridge trust fund and the dedicated mass transporta-
         tion  trust  fund; to amend the state finance law, the highway law and
         the vehicle and traffic law, in relation to  the  deposit  of  certain
         fees  in  the  dedicated  highway and bridge trust fund; and to repeal
         sections 89 and 89-a of the state finance law,  establishing,  respec-
         tively, the emergency highway reconditioning and preservation fund and
         the emergency highway construction and reconstruction fund (S)

         The  People of the State of New York, represented in Senate and Assembly, do enact as follows:

    1    Section 1. This act enacts into law major  components  of  legislation
    2  which are necessary to implement the state fiscal plan for the 2000-2001
    3  state  fiscal  year.  Each  component  is wholly contained within a Part
    4  identified as Parts A through S. 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.

       S. 6295                             3                            A. 9295

    1                                   PART A

    2    Section  1.  Paragraph  (b) of subdivision 1 of section 183 of the tax
    3  law, as amended by chapter 309 of the laws of 1996, is amended  to  read
    4  as follows:
    5    (b)  For  the  privilege  of exercising its corporate franchise, or of
    6  doing business, or of employing capital, or of owning or leasing proper-
    7  ty in this state in a corporate or organized capacity, or of maintaining
    8  an office in this state, every domestic corporation, joint-stock company
    9  or association formed for or  principally  engaged  in  the  conduct  of
   10  canal, steamboat, ferry (except a ferry company operating between any of
   11  the boroughs of the city of New York under a lease granted by the city),
   12  express,  navigation,  pipe  line,  transfer,  baggage express, omnibus,
   13  taxicab, telegraph, or telephone business, or formed for or  principally
   14  engaged  in  the  conduct  of  two or more of such businesses, and every
   15  domestic corporation, joint-stock company or association formed  for  or
   16  principally  engaged  in the conduct of a railroad, palace car, sleeping
   17  car or trucking business or formed for or  principally  engaged  in  the
   18  conduct of two or more of such businesses and which has made an election
   19  pursuant  to  subdivision  ten of this section, and every other domestic
   20  corporation, joint-stock company or association principally  engaged  in
   21  the  conduct  of  a  transportation  or  transmission business, except a
   22  corporation, joint-stock company or association formed for or principal-
   23  ly engaged in the conduct of a railroad, palace  car,  sleeping  car  or
   24  trucking business or formed for or principally engaged in the conduct of
   25  two  or  more  of  such  businesses  and which has not made the election
   26  provided for in subdivision ten of this section,  and  except  a  corpo-
   27  ration,  joint-stock  company  or association principally engaged in the
   28  conduct of aviation (including air freight forwarders acting as  princi-
   29  pal and like indirect air carriers) and except a corporation principally
   30  engaged  in  providing  telecommunication  services between aircraft and
   31  dispatcher, aircraft and air  traffic  control  or  ground  station  and
   32  ground  station  (or  any combination of the foregoing), at least ninety
   33  percent of the voting stock of which corporation is owned,  directly  or
   34  indirectly,  by  air carriers and which corporation's principal function
   35  is to fulfill the requirements of  (i)  the  federal  aviation  adminis-
   36  tration  (or  the  successor  thereto)  or  (ii) the international civil
   37  aviation organization (or the successor thereto), relating to the exist-
   38  ence of a communication system between aircraft and dispatcher, aircraft
   39  and air traffic control or ground station and  ground  station  (or  any
   40  combination of the foregoing) for the purposes of air safety and naviga-
   41  tion  and  except  a  corporation,  joint-stock  company  or association
   42  subject to taxation under [section one hundred  eighty-six  or]  article
   43  thirty-two  of  this chapter, shall pay, in advance, an annual tax to be
   44  computed upon the basis of the amount of its capital stock  within  this
   45  state  during  the  preceding year, and upon each dollar of such amount.
   46  Provided, however, a corporation,  joint-stock  company  or  association
   47  formed for or principally engaged in the transportation, transmission or
   48  distribution  of  gas,  electricity or steam shall not be subject to tax
   49  under this section or section one hundred eighty-four of this article.
   50    § 2. Subdivision 1 of section 184  of  the  tax  law,  as  amended  by
   51  section  119 of part A of chapter 389 of the laws of 1997, is amended to
   52  read as follows:
   53    1. The term "corporation" as used in this  section  shall  include  an
   54  association,  within the meaning of paragraph three of subsection (a) of
   55  section seventy-seven hundred one of the internal revenue code  (includ-

       S. 6295                             4                            A. 9295

    1  ing  a limited liability company), a publicly traded partnership treated
    2  as a corporation for purposes of the internal revenue code  pursuant  to
    3  section seventy-seven hundred four thereof.
    4    Every  corporation,  joint-stock  company or association formed for or
    5  principally engaged in the conduct of canal, steamboat, ferry (except  a
    6  ferry  company  operating between any of the boroughs of the city of New
    7  York under a lease granted by the city), express, navigation, pipe line,
    8  transfer, baggage express, omnibus, taxicab, telegraph  or  local  tele-
    9  phone  business,  or formed for or principally engaged in the conduct of
   10  two or more of  such  businesses,  and  every  corporation,  joint-stock
   11  company  or association formed for or principally engaged in the conduct
   12  of surface railroad, whether or not operated by steam, subway  railroad,
   13  elevated  railroad,  palace  car,  sleeping  car or trucking business or
   14  formed for or principally engaged in the conduct of  two  or  more  such
   15  businesses and which has made an election pursuant to subdivision ten of
   16  section one hundred eighty-three of this article, and every other corpo-
   17  ration,  joint-stock  company  or  association formed for or principally
   18  engaged in the conduct of  a  transportation  or  transmission  business
   19  (other  than  a  telephone  business), except a corporation, joint-stock
   20  company or association formed for or principally engaged in the  conduct
   21  of  a  surface  railroad, whether or not operated by steam, subway rail-
   22  road, elevated railroad, palace car, sleeping car or  trucking  business
   23  or  formed  for  or principally engaged in the conduct of two or more of
   24  such businesses and which has not made  the  election  provided  for  in
   25  subdivision  ten  of  section  one hundred eighty-three of this article,
   26  and, except a corporation, joint-stock company or association principal-
   27  ly engaged in the conduct of aviation (including air freight  forwarders
   28  acting  as principal and like indirect air carriers) and except a corpo-
   29  ration  principally  engaged  in  providing  telecommunication  services
   30  between  aircraft  and  dispatcher,  aircraft and air traffic control or
   31  ground station and ground station (or any combination of the foregoing),
   32  at least ninety percent of the voting  stock  of  which  corporation  is
   33  owned,  directly  or indirectly, by air carriers and which corporation's
   34  principal function is to fulfill the requirements  of  (i)  the  federal
   35  aviation  administration (or the successor thereto) or (ii) the interna-
   36  tional civil aviation organization (or the successor thereto),  relating
   37  to  the  existence  of  a  communication  system  between  aircraft  and
   38  dispatcher, aircraft and air  traffic  control  or  ground  station  and
   39  ground station (or any combination of the foregoing) for the purposes of
   40  air  safety and navigation and except a corporation, joint-stock company
   41  or association which is liable to taxation under  [section  one  hundred
   42  eighty-six  or] article thirty-two of this chapter, for the privilege of
   43  exercising its corporate franchise, or of doing business, or of  employ-
   44  ing  capital, or of owning or leasing property in this state in a corpo-
   45  rate or organized capacity, or maintaining  an  office  in  this  state,
   46  shall  pay a franchise tax which shall be equal to (i) three-quarters of
   47  one percent for taxable years ending before two thousand  one,  provided
   48  that for a taxable year ending in two thousand the rate shall be reduced
   49  to  three-eighths of one percent effective July first, two thousand with
   50  the result that for purposes of implementation of such  change  in  rate
   51  the  applicable  rate  for  such  a year shall be nine-sixteenths of one
   52  percent, and  (ii)  three-eighths  of  one  percent  for  taxable  years
   53  commencing  after two thousand, upon its gross earnings from all sources
   54  within this state; except that, for taxable years commencing on or after
   55  January first, nineteen hundred eighty-five  and  ending  on  or  before
   56  December  thirty-first, nineteen hundred eighty-nine, every corporation,

       S. 6295                             5                            A. 9295

    1  joint-stock company or association formed for or principally engaged  in
    2  the conduct of telephone or telegraph business shall pay a franchise tax
    3  which  shall  be  equal to three-tenths of one per centum upon its gross
    4  earnings  from  all  sources  within  this  state and, for taxable years
    5  commencing on or after January first,  nineteen  hundred  ninety,  every
    6  corporation, joint-stock company or association formed for or principal-
    7  ly  engaged  in  the  conduct  of local telephone business, or telegraph
    8  business shall pay a franchise tax which shall be equal  to  (i)  three-
    9  quarters  of  one  percent  for taxable years ending before two thousand
   10  one, provided that for a taxable year ending in two  thousand  the  rate
   11  shall  be  reduced to three-eighths of one percent effective July first,
   12  two thousand with the result that for purposes of implementation of such
   13  change in rate the applicable rate for such a year  shall  be  nine-six-
   14  teenths  of one percent, and (ii) three-eighths of one percent for taxa-
   15  ble years commencing after two thousand, upon its  gross  earnings  from
   16  all  sources  within  this state, except that a corporation, joint-stock
   17  company or association formed for or principally engaged in the  conduct
   18  of  a local telephone business shall exclude the following earnings (but
   19  not in any event earnings derived by such taxpayer from the provision of
   20  carrier access services) derived by such taxpayer from sales  for  ulti-
   21  mate  consumption  of  telecommunications  service  to its customers (i)
   22  thirty percent of separately  charged  intra-LATA  toll  service  (which
   23  shall  also  include interregion regional calling plan service) and (ii)
   24  one hundred percent of  separately  charged  inter-LATA,  interstate  or
   25  international  telecommunications service; and except that corporations,
   26  joint-stock companies or associations formed for or principally  engaged
   27  in  the  conduct  of surface railroad, whether or not operated by steam,
   28  subway railroad, elevated railroad, palace car or sleeping car, business
   29  or any other corporation  formed  for  or  principally  engaged  in  the
   30  conduct  of  a  railroad  business,  for taxable years prior to nineteen
   31  hundred ninety-seven, and corporations, joint-stock companies or associ-
   32  ations formed for or principally engaged in the conduct of canal, steam-
   33  boat, ferry (except  a  ferry  company  operating  between  any  of  the
   34  boroughs  of  the  city  of New York under a lease granted by the city),
   35  navigation or any corporation formed for or principally engaged  in  the
   36  operation  of vessels, shall pay a franchise tax which shall be equal to
   37  three-quarters of one per centum upon its gross earnings from all sourc-
   38  es within this state, excluding earnings derived  from  business  of  an
   39  interstate or foreign character; except that for taxable years beginning
   40  in  nineteen hundred ninety-seven or thereafter, in the case of a corpo-
   41  ration, joint-stock company or association which, with respect to  taxa-
   42  ble  years  beginning  after  nineteen hundred ninety-seven, has made an
   43  election pursuant to subdivision ten of section one hundred eighty-three
   44  of this article and which is formed for or principally  engaged  in  the
   45  conduct  of  surface  railroad, whether or not operated by steam, subway
   46  railroad, elevated railroad, palace car, sleeping car or trucking  busi-
   47  ness  or formed for or principally engaged in the conduct of two or more
   48  of such businesses, such corporation, joint-stock company or association
   49  shall pay a franchise tax which shall be equal to (i) six-tenths of  one
   50  percent  for taxable years ending before two thousand one, provided that
   51  for a taxable year ending in two thousand the rate shall be  reduced  to
   52  three-eighths of one percent effective July first, two thousand with the
   53  result  that  for  purposes of implementation of such change in rate the
   54  applicable rate for such a year shall be thirty-nine eightieths  of  one
   55  percent,  and  (ii)  three-eighths  of  one  percent  for  taxable years
   56  commencing after two thousand, upon its gross earnings from all  sources

       S. 6295                             6                            A. 9295

    1  within  this  state,  provided that in the case of a corporation, joint-
    2  stock company or association formed for or principally  engaged  in  the
    3  conduct  of  surface  railroad, whether or not operated by steam, subway
    4  railroad,  elevated  railroad,  palace  car or sleeping car business, or
    5  formed for or principally engaged in the conduct of two or more of  such
    6  businesses,  such gross earnings shall not include earnings derived from
    7  business of an interstate or foreign character.
    8    Provided, however, with respect to railroad, elevated railroad, palace
    9  car or sleeping car business or any  other  corporation  formed  for  or
   10  principally  engaged  in  the  conduct of a railroad business and canal,
   11  steamboat, ferry (except a ferry company operating between  any  of  the
   12  boroughs  of  the  city  of New York under a lease granted by the city),
   13  navigation or any corporation formed for or principally engaged  in  the
   14  operation  of  vessels where the gross earnings from such transportation
   15  business both originating and terminating within this state and travers-
   16  ing both this state and another state or  states  or  country  shall  be
   17  subject  to the franchise tax imposed by this section (except where such
   18  corporation, joint-stock company or association is formed for or princi-
   19  pally engaged in the conduct of a railroad (including surface  railroad,
   20  whether or not operated by steam, subway railroad or elevated railroad),
   21  palace car or sleeping car business or formed for or principally engaged
   22  in  the  conduct of two or more of such businesses, and has not made the
   23  election provided for under  subdivision  ten  of  section  one  hundred
   24  eighty-three  of  this  article) and such earnings shall be allocated to
   25  this state in the same ratio that the mileage within the state bears  to
   26  the  total  mileage of such business.  Provided, further, a corporation,
   27  joint-stock company or association formed for or principally engaged  in
   28  the  transportation, transmission or distribution of gas, electricity or
   29  steam shall not be subject to tax under  this  section  or  section  one
   30  hundred eighty-three of this article.
   31    The  term "local telephone business" means the provision or furnishing
   32  of telecommunication services for hire wherein the service furnished  by
   33  the  provider  thereof consists of carrier access service or the service
   34  originates and terminates within the same  local  access  and  transport
   35  area  ("LATA"),  a local access and transport area being that geographic
   36  area as established and approved, and as so set and in existence on July
   37  first, nineteen hundred ninety-four, pursuant  to  the  modification  of
   38  final  judgment  in  United  States  v.  Western Electric Company (civil
   39  action no. 82-0192) in the United States district court for the District
   40  of Columbia or within the LATA-like Rochester non-associated independent
   41  area.
   42    The term "telecommunication services" shall have the meaning  ascribed
   43  to such term in section one hundred eighty-six-e of this article.
   44    § 3. Sections 186 and 186-b of the tax law are REPEALED.
   45    §  4.  Subdivision 1, paragraphs (b), (c) and (d) of subdivision 2 and
   46  subdivision 6 of section 186-a of the tax law, subdivision 1 as  amended
   47  by  section 121 of part A of chapter 389 of the laws of 1997, paragraphs
   48  (b), (c) and (d) of subdivision 2 as amended by chapter 536 of the  laws
   49  of  1998  and  subdivision 6 as added by chapter 321 of the laws of 1937
   50  and as renumbered by chapter 103 of the laws of  1981,  are  amended  to
   51  read as follows:
   52    1.  Notwithstanding  any  other  provision  of this chapter, or of any
   53  other law, (a) a tax equal to [three and one-half percent prior to Octo-
   54  ber first, nineteen hundred ninety-eight,] three and one-quarter percent
   55  [from October first, nineteen  hundred  ninety-eight]  through  December
   56  thirty-first, nineteen hundred ninety-nine, and two and one-half percent

       S. 6295                             7                            A. 9295

    1  on  and  after January first, two thousand of its gross income is hereby
    2  imposed upon every provider of telecommunication services doing business
    3  in this state which is subject to the supervision of the  state  depart-
    4  ment  of  public  service  which  has a gross income for the year ending
    5  December thirty-first in excess of five hundred dollars;
    6    (b) a tax equal to (1) two and one-half percent on and  after  January
    7  first, two thousand of that portion of its gross income derived from the
    8  transportation,  transmission  or  distribution of gas or electricity by
    9  means of conduits, mains, pipes, wires, lines or the like  and  (2)  two
   10  and  one-tenth percent from January first, two thousand through December
   11  thirty-first, two thousand,  two  and  one-tenth  percent  from  January
   12  first, two thousand one through December thirty-first, two thousand one,
   13  one  and  seven-tenths  percent  from  January  first,  two thousand two
   14  through December thirty-first, two thousand  two,  eight-tenths  of  one
   15  percent  from January first, two thousand three through December thirty-
   16  first, two thousand three,  four-tenths  of  one  percent  from  January
   17  first,  two  thousand  four  through December thirty-first, two thousand
   18  four and zero percent commencing January first, two thousand five of all
   19  of its other gross income, is hereby  imposed  upon  every  utility  not
   20  taxed  under  paragraph  (a)  of this subdivision doing business in this
   21  state which is subject to the supervision of  the  state  department  of
   22  public  service  which  has  a gross income for the year ending December
   23  thirty-first in excess of five hundred dollars, except motor carriers or
   24  brokers subject to such  supervision  under  [article  three-b  of]  the
   25  public service law; and
   26    (c) a tax equal to [three and one-half percent prior to October first,
   27  nineteen  hundred  ninety-eight,]  three  and  one-quarter percent [from
   28  October first, nineteen hundred ninety-eight] through  December  thirty-
   29  first,  nineteen hundred ninety-nine, [and] two and [one-half] one-tenth
   30  percent [on and after]  from  January  first,  two  thousand[,]  through
   31  December  thirty-first,  two  thousand,  two  and one-tenth percent from
   32  January first, two thousand one through December thirty-first, two thou-
   33  sand one, one and seven-tenths percent from January first, two  thousand
   34  two through December thirty-first, two thousand two, eight-tenths of one
   35  percent  from January first, two thousand three through December thirty-
   36  first, two thousand three,  four-tenths  of  one  percent  from  January
   37  first,  two  thousand  four  through December thirty-first, two thousand
   38  four and zero percent commencing January first, two thousand five of its
   39  gross operating income is hereby imposed upon every other utility  doing
   40  business  in  this state which has a gross operating income for the year
   41  ending December thirty-first in excess of five  hundred  dollars,  which
   42  taxes  shall  be in addition to any and all other taxes and fees imposed
   43  by any other provision of law for the same period.
   44    (b) the word "person" means persons, corporations, companies,  associ-
   45  ations,  joint-stock companies or associations, partnerships and limited
   46  liability companies, estates, assignee of rents, any person acting in  a
   47  fiduciary  capacity,  or any other entity, and persons, their assignees,
   48  lessees, trustees or receivers, appointed by any court whatsoever, or by
   49  any other means, except  the  state[,];  municipalities,  political  and
   50  civil  subdivisions of the state or municipality[,] and public districts
   51  [and] (provided, however, that with respect to gas, electricity and  gas
   52  or  electric  service,  including the sale of the transportation, trans-
   53  mission or distribution of  gas  or  electricity,  such  municipalities,
   54  political  and civil subdivisions and public districts shall be excluded
   55  from the definition of "person" if they own and operate facilities which
   56  are used to generate or distribute electricity  or  distribute  gas  and

       S. 6295                             8                            A. 9295

    1  they distribute and sell such gas or electricity solely at retail, sole-
    2  ly  within  their  respective  jurisdiction;  or provided, further, with
    3  respect to the sale of electricity or the  transportation,  transmission
    4  or  distribution  of  electricity, a municipality shall be excluded from
    5  the definition of "person" if it sells electricity at retail  where  all
    6  such  electricity (excluding temporary substitution power during outages
    7  or periods of reduced output) has been generated solely by and purchased
    8  solely from the state or a public authority of the state);  corporations
    9  and  associations which are organized and operated exclusively for reli-
   10  gious, charitable or educational purposes, no part of the  net  earnings
   11  of which inures to the benefit of any private shareholder or individual,
   12  and  which are described in paragraph four of subdivision (a) of section
   13  eleven hundred sixteen of this chapter where such  organization  resells
   14  such  gas  or  electricity or gas or electric service as landlord to its
   15  tenants in buildings owned by such organization; and excepting a  corpo-
   16  ration  organized  and  operated  exclusively for the purpose of leasing
   17  from a city in this state a water-works system designed to supply  water
   18  at  cost  to  users thereof for discharge, either before or after indus-
   19  trial use, into a river within such city in order to  improve  the  flow
   20  and  condition  of  such river and thereby to provide a means to relieve
   21  such river from pollution;
   22    (c) the words "gross income" mean and include receipts received in  or
   23  by  reason  of any sale, conditional or otherwise, (except sales herein-
   24  after referred to with respect to which it is provided that profits from
   25  the sale shall be included in gross income) made or service rendered for
   26  ultimate consumption or use by the purchaser in  this  state,  including
   27  cash,  credits  and  property of any kind or nature (whether or not such
   28  sale is made or such  service  is  rendered  for  profit),  without  any
   29  deduction  therefrom  on  account  of the cost of the property sold, the
   30  cost of materials used, labor or services or other  costs,  interest  or
   31  discount paid, or any other expense whatsoever.
   32    (1) Provided, however, that all receipts from sales of the transporta-
   33  tion,  transmission  or  distribution  of gas or electricity by means of
   34  conduits, mains, pipes, wires, lines or the like, rendered or  performed
   35  in  this  state,  shall be included in gross income except receipts from
   36  (i) sales of the transportation, transmission or distribution of gas  or
   37  electricity  to  (A)  a  utility (excluding a public authority) which is
   38  supervised by this state or another jurisdiction (where  an  element  of
   39  such  supervision includes rate regulation and, for a utility supervised
   40  by another jurisdiction, such supervision includes rate  regulation  and
   41  such  gas  or  electricity  is delivered for ultimate consumption or use
   42  outside this state), (B) a municipality which owns and operates  facili-
   43  ties  which are used to generate or distribute electricity or distribute
   44  gas and which distributes and sells such electricity or  gas  solely  at
   45  retail,  solely  within  its  respective  jurisdiction,  or (C) a public
   46  authority of this state where such public authority is primarily engaged
   47  in the generation and transmission or distribution of electricity or the
   48  distribution of electricity or gas and at least ninety-five  percent  of
   49  the  assets of which are so devoted, provided, that, if the service area
   50  or district of the authority is less than the entire state, the excluded
   51  receipt shall be limited to receipts derived from the sale of  transpor-
   52  tation,  transmission or distribution of gas or electricity, which elec-
   53  tricity or gas will be sold by  such  authority  at  retail  within  its
   54  service  area  or  district;  where, as the case may be, such utility or
   55  authority purchasing such transportation, transmission  or  distribution
   56  sells  the  gas  or  electricity  being  so  transported, transmitted or

       S. 6295                             9                            A. 9295

    1  distributed, (ii) sales of the transportation, transmission or  distrib-
    2  ution  of  electricity  to  a  municipality  where the electricity being
    3  transported has been purchased by such municipality and has been  gener-
    4  ated solely by and purchased solely from the state or a public authority
    5  of the state (except where the electricity being transported constitutes
    6  temporary substitution power being supplied during outages or periods of
    7  reduced  output) and where such municipality purchasing such transporta-
    8  tion, transmission or distribution, sells solely at retail, solely with-
    9  in its respective jurisdiction, the electricity  being  so  transported,
   10  transmitted or distributed, or (iii) sales of the transportation, trans-
   11  mission  or distribution of gas or electricity to corporations and asso-
   12  ciations which are organized and  operated  exclusively  for  religious,
   13  charitable or educational purposes, no part of the net earnings of which
   14  inures  to  the  benefit  of  any private shareholder or individual, and
   15  which are described in paragraph four  of  subdivision  (a)  of  section
   16  eleven  hundred  sixteen of this chapter where such organization resells
   17  such transportation, transmission or distribution as part of  a  bundled
   18  gas or electric service as landlord to its tenants in buildings owned by
   19  such organization.
   20    (2)  Provided,  further, receipts received from the sale of the trans-
   21  portation, transmission or distribution of gas or electricity shall mean
   22  the receipts  received  from  customers  representing  the  noncommodity
   23  charges for gas or electric service.
   24    (3)  Provided,  further,  gross  income  with respect to a provider of
   25  telecommunication services shall not include receipts from the  sale  of
   26  telecommunication  services  as such services are defined in section one
   27  hundred eighty-six-e of this article.
   28    (4) Provided, further, sales of  gas,  electricity,  steam,  water  or
   29  refrigeration  or gas, electric, steam, water or refrigerator service to
   30  a landlord that is a person as defined in this subdivision for resale by
   31  such landlord to a tenant, for consumption by such tenant as an incident
   32  to such landlord's activity of renting premises to such tenant, shall be
   33  subject to the tax imposed under this section even though such sales are
   34  not for  ultimate  consumption  by  such  landlord.  Provided,  further,
   35  receipts  derived  by a landlord from the resale for such gas, electric-
   36  ity, steam, water or refrigeration or furnishing gas,  electric,  steam,
   37  water  or  refrigerator  service  to  such  tenant shall be conclusively
   38  presumed to be equal to such landlord's cost of the same,  and,  if  the
   39  tax  under  this  section  was  imposed on the sale to such landlord, no
   40  additional tax under this section shall be owing on  the  sale  by  such
   41  landlord to such tenant. If, however, the tax under this section was not
   42  imposed  on such sale to the landlord, then such landlord on the sale to
   43  its tenant shall file a return hereunder based on such  landlord's  cost
   44  (including any associated transportation cost) of such gas, electricity,
   45  steam,  water  or refrigeration or gas, electric, steam, water or refri-
   46  gerator service.
   47    (5) "Gross income" also includes profits from the sale of  securities;
   48  also profits from the sale of real property growing out of the ownership
   49  or  use  of  or  interest in such property; also profit from the sale of
   50  personal property (other than property of a kind which would properly be
   51  included in the inventory of the taxpayer if on hand at the close of the
   52  period for which a return is made); also receipts from  interest,  divi-
   53  dends,  and royalties, derived from sources within this state other than
   54  such as are received from a corporation a majority of whose voting stock
   55  is owned by the taxpaying utility, without any deduction  therefrom  for
   56  any expenses whatsoever incurred in connection with the receipt thereof,

       S. 6295                            10                            A. 9295

    1  also  profits from any transaction (except sales for resale and rentals)
    2  within this state whatsoever;
    3    (d)  the  words  "gross  operating  income"  mean and include receipts
    4  received in or by reason of any sale, conditional or otherwise, made for
    5  ultimate consumption or use by the purchaser of gas, electricity, steam,
    6  water or refrigeration, or in or by reason of the  furnishing  for  such
    7  consumption  or  use  of  gas,  electric,  steam,  water or refrigerator
    8  service in this state, including cash, credits and property of any  kind
    9  or nature, without any deduction therefrom on account of the cost of the
   10  property  sold,  the  cost of materials used, labor or services or other
   11  costs, interest or discount paid,  or  any  other  expenses  whatsoever.
   12  Provided,  however,  there shall be excluded from gross operating income
   13  receipts representing the amount received from the resale of the  trans-
   14  portation,  transmission  or  distribution of gas or electricity in this
   15  state where such  transportation,  transmission  or  distribution  being
   16  resold  is  provided  by a utility subject to tax under paragraph (b) of
   17  subdivision one of this section; the receipts  representing  the  amount
   18  received  from  resale  of such transportation, transmission or distrib-
   19  ution shall be the amount received for such transportation, transmission
   20  or distribution by such utility which initially provided such  transpor-
   21  tation,  transmission  or distribution. Provided, further, sales of gas,
   22  electricity, steam, water or  refrigeration  or  gas,  electric,  steam,
   23  water  or refrigerator service to a landlord that is a person as defined
   24  in this subdivision for  resale  by  such  landlord  to  a  tenant,  for
   25  consumption by such tenant as an incident to such landlord's activity of
   26  renting  premises  to  such  tenant, shall be subject to the tax imposed
   27  under this section even though such sales are not for ultimate  consump-
   28  tion by such landlord. Provided, further, receipts derived by a landlord
   29  from  the resale of such gas, electricity, steam, water or refrigeration
   30  or furnishing gas, electric, steam, water  or  refrigerator  service  to
   31  such  tenant  shall  be  conclusively presumed to be equal to such land-
   32  lord's cost of the same, and, if the tax under this section was  imposed
   33  on the sale to such landlord, no additional tax under this section shall
   34  be  owing  on the sale by such landlord to such tenant. If the tax under
   35  this section was not imposed on such sale to  the  landlord,  then  such
   36  landlord  on  the sale to its tenant shall file a return hereunder based
   37  on such landlord's cost (including any associated  transportation  cost)
   38  of  such  gas,  electricity, steam, water or refrigeration or gas, elec-
   39  tric, steam, water or refrigerator service;
   40    [6. The tax imposed by this section shall be charged  against  and  be
   41  paid  by  the utility and shall not be added as a separate item to bills
   42  rendered by the utility to customers or others but  shall  constitute  a
   43  part of the operating costs of such utility.]
   44    §  5.  Subdivisions  1,  2,  4 and 10 of section 186-a of the tax law,
   45  subdivision 1 and paragraphs (b),  (c)  and  (d)  of  subdivision  2  as
   46  amended  by section four of this act, subdivisions 2 and 4 as amended by
   47  chapter 536 of the laws of 1998 and subdivision 10 as amended by chapter
   48  757 of the laws of 1989 and as renumbered by chapter 316 of the laws  of
   49  1997, are amended to read as follows:
   50    1.  Notwithstanding  any  other  provision  of this chapter, or of any
   51  other law, (a) a tax equal to [three  and  one-quarter  percent  through
   52  December  thirty-first,  nineteen hundred ninety-nine, and] two and one-
   53  half percent on and after January  first,  two  thousand  of  its  gross
   54  income  is  hereby  imposed  upon  every  provider  of telecommunication
   55  services doing business in this state which is  subject  to  the  super-
   56  vision  of  the  state  department  of  public service which has a gross

       S. 6295                            11                            A. 9295

    1  income for the year ending  December  thirty-first  in  excess  of  five
    2  hundred  dollars;  and (b) a tax equal to [(1)] two and one-half percent
    3  [on and after January first, two thousand] of that portion of its  gross
    4  income  derived from the transportation, transmission or distribution of
    5  gas or electricity by means of conduits, mains, pipes, wires,  lines  or
    6  the  like  [and  (2)  two  and one-tenth percent from January first, two
    7  thousand through December thirty-first, two thousand, two and  one-tenth
    8  percent  from  January  first, two thousand one through December thirty-
    9  first, two thousand one,  one  and  seven-tenths  percent  from  January
   10  first, two thousand two through December thirty-first, two thousand two,
   11  eight-tenths  of  one  percent  from  January  first, two thousand three
   12  through December thirty-first, two thousand three,  four-tenths  of  one
   13  percent  from  January first, two thousand four through December thirty-
   14  first, two thousand four and zero percent commencing January first,  two
   15  thousand  five of all of its other gross income,] is hereby imposed upon
   16  every utility not taxed under paragraph (a) of  this  subdivision  doing
   17  business  in this state which is subject to the supervision of the state
   18  department of public service which has  a  gross  income  for  the  year
   19  ending  December  thirty-first in excess of five hundred dollars, except
   20  motor carriers or brokers subject to such supervision under  the  public
   21  service  law[;  and  (c)  a  tax  equal to three and one-quarter percent
   22  through December thirty-first, nineteen  hundred  ninety-nine,  two  and
   23  one-tenth  percent  from  January  first,  two thousand through December
   24  thirty-first, two thousand,  two  and  one-tenth  percent  from  January
   25  first, two thousand one through December thirty-first, two thousand one,
   26  one  and  seven-tenths  percent  from  January  first,  two thousand two
   27  through December thirty-first, two thousand  two,  eight-tenths  of  one
   28  percent  from January first, two thousand three through December thirty-
   29  first, two thousand three,  four-tenths  of  one  percent  from  January
   30  first,  two  thousand  four  through December thirty-first, two thousand
   31  four and zero percent commencing January first, two thousand five of its
   32  gross operating income is hereby imposed upon every other utility  doing
   33  business  in  this state which has a gross operating income for the year
   34  ending December thirty-first in excess of five hundred  dollars],  which
   35  taxes  shall  be in addition to any and all other taxes and fees imposed
   36  by any other provision of law for the same period.
   37    2. As used in this section, (a)  the  word  "utility"  includes  every
   38  person  (including every provider of telecommunication services) subject
   39  to the supervision of the state department  of  public  service,  except
   40  persons  engaged  in the business of operating on the public highways of
   41  this state one or more omnibuses, having a seating capacity of more than
   42  seven persons, and persons engaged in the business of operating or leas-
   43  ing sleeping and parlor railroad cars or of  operating  railroads  other
   44  than  street surface, rapid transit, subway and elevated railroads[, and
   45  also includes every person (whether or not such  person  is  subject  to
   46  such  supervision) who sells gas, electricity, steam, water or refriger-
   47  ation, delivered through mains, pipes or wires, or furnishes gas,  elec-
   48  tric, steam, water or refrigerator service, by means of mains, pipes, or
   49  wires;  regardless  of  whether such activities are the main business of
   50  such person or are only incidental thereto, or of whether use is made of
   51  the public streets]; (b) the word "person" means persons,  corporations,
   52  companies, associations, joint-stock companies or associations, partner-
   53  ships  and  limited liability companies, estates, assignee of rents, any
   54  person acting in a fiduciary capacity, or any other entity, and persons,
   55  their assignees, lessees, trustees or receivers, appointed by any  court
   56  whatsoever,  or  by  any  other means, except the state; municipalities,

       S. 6295                            12                            A. 9295

    1  political and civil subdivisions of the state or municipality and public
    2  districts (provided, however, that with respect to gas, electricity  and
    3  gas or electric service, including the sale of the transportation, tran-
    4  smission  or  distribution  of  gas or electricity, such municipalities,
    5  political and civil subdivisions and public districts shall be  excluded
    6  from the definition of "person" if they own and operate facilities which
    7  are  used  to  generate  or distribute electricity or distribute gas and
    8  they distribute and sell such gas or electricity solely at retail, sole-
    9  ly within their respective  jurisdiction;  or  provided,  further,  with
   10  respect  to  the sale of electricity or the transportation, transmission
   11  or distribution of electricity, a municipality shall  be  excluded  from
   12  the  definition  of "person" if it sells electricity at retail where all
   13  such electricity (excluding temporary substitution power during  outages
   14  or periods of reduced output) has been generated solely by and purchased
   15  solely  from the state or a public authority of the state); corporations
   16  and associations which are organized and operated exclusively for  reli-
   17  gious,  charitable  or educational purposes, no part of the net earnings
   18  of which inures to the benefit of any private shareholder or individual,
   19  and which are described in paragraph four of subdivision (a) of  section
   20  eleven  hundred  sixteen of this chapter where such organization resells
   21  such gas or electricity or gas or electric service as  landlord  to  its
   22  tenants in buildings owned by such organization[; and excepting a corpo-
   23  ration  organized  and  operated  exclusively for the purpose of leasing
   24  from a city in this state a water-works system designed to supply  water
   25  at  cost  to  users thereof for discharge, either before or after indus-
   26  trial use, into a river within such city in order to  improve  the  flow
   27  and  condition  of  such river and thereby to provide a means to relieve
   28  such river from pollution]; (c) the words "gross income":
   29    (1) When used in reference to persons described in  paragraph  (a)  of
   30  subdivision  one  of this section, mean and include receipts received in
   31  or by reason of any sale, conditional or otherwise, (except sales  here-
   32  inafter  referred  to  with respect to which it is provided that profits
   33  from the sale shall  be  included  in  gross  income)  made  or  service
   34  rendered for ultimate consumption or use by the purchaser in this state,
   35  including  cash,  credits and property of any kind or nature (whether or
   36  not such sale is made or such service is rendered for  profit),  without
   37  any deduction therefrom on account of the cost of the property sold, the
   38  cost  of  materials  used, labor or services or other costs, interest or
   39  discount paid, or any other expense whatsoever.
   40    [(1)] (2) Provided, however, [that all  receipts  from  sales  of  the
   41  transportation,  transmission  or  distribution of gas or electricity by
   42  means of conduits, mains, pipes, wires, lines or the like,  rendered  or
   43  performed  in  this  state,  shall  be  included  in gross income except
   44  receipts from (i) sales of the transportation, transmission or  distrib-
   45  ution of gas or electricity to (A) a utility (excluding a public author-
   46  ity) which is supervised by this state or another jurisdiction (where an
   47  element  of such supervision includes rate regulation and, for a utility
   48  supervised by another jurisdiction, such supervision includes rate regu-
   49  lation and such gas or electricity is delivered for ultimate consumption
   50  or use outside this state), (B) a municipality which owns  and  operates
   51  facilities  which  are  used  to  generate  or distribute electricity or
   52  distribute gas and which distributes and sells such electricity  or  gas
   53  solely  at  retail,  solely within its respective jurisdiction, or (C) a
   54  public authority of this state where such public authority is  primarily
   55  engaged  in the generation and transmission or distribution of electric-
   56  ity or the distribution of electricity or gas and at  least  ninety-five

       S. 6295                            13                            A. 9295

    1  percent  of  the  assets of which are so devoted, provided, that, if the
    2  service area or district of the authority is less than the entire state,
    3  the excluded receipt shall be limited to receipts derived from the  sale
    4  of  transportation,  transmission or distribution of gas or electricity,
    5  which electricity or gas will be sold by such authority at retail within
    6  its service area or district; where, as the case may be, such utility or
    7  authority purchasing such transportation, transmission  or  distribution
    8  sells  the  gas  or  electricity  being  so  transported, transmitted or
    9  distributed, (ii) sales of the transportation, transmission or  distrib-
   10  ution  of  electricity  to  a  municipality  where the electricity being
   11  transported has been purchased by such municipality and has been  gener-
   12  ated solely by and purchased solely from the state or a public authority
   13  of the state (except where the electricity being transported constitutes
   14  temporary substitution power being supplied during outages or periods of
   15  reduced  output) and where such municipality purchasing such transporta-
   16  tion, transmission or distribution, sells solely at retail, solely with-
   17  in its respective jurisdiction, the electricity  being  so  transported,
   18  transmitted or distributed, or (iii) sales of the transportation, trans-
   19  mission  or distribution of gas or electricity to corporations and asso-
   20  ciations which are organized and  operated  exclusively  for  religious,
   21  charitable or educational purposes, no part of the net earnings of which
   22  inures  to  the  benefit  of  any private shareholder or individual, and
   23  which are described in paragraph four  of  subdivision  (a)  of  section
   24  eleven  hundred  sixteen of this chapter where such organization resells
   25  such transportation, transmission or distribution as part of  a  bundled
   26  gas or electric service as landlord to its tenants in buildings owned by
   27  such organization.
   28    (2)  Provided,  further, receipts received from the sale of the trans-
   29  portation, transmission or distribution of gas or electricity shall mean
   30  the receipts  received  from  customers  representing  the  noncommodity
   31  charges for gas or electric service.
   32    (3)  Provided,  further,]  gross  income with respect to a provider of
   33  telecommunication services shall not include receipts from the  sale  of
   34  telecommunication  services  as such services are defined in section one
   35  hundred eighty-six-e of this article.
   36    [(4) Provided, further, sales of gas,  electricity,  steam,  water  or
   37  refrigeration  or gas, electric, steam, water or refrigerator service to
   38  a landlord that is a person as defined in this subdivision for resale by
   39  such landlord to a tenant, for consumption by such tenant as an incident
   40  to such landlord's activity of renting premises to such tenant, shall be
   41  subject to the tax imposed under this section even though such sales are
   42  not for  ultimate  consumption  by  such  landlord.  Provided,  further,
   43  receipts  derived  by a landlord from the resale for such gas, electric-
   44  ity, steam, water or refrigeration or furnishing gas,  electric,  steam,
   45  water  or  refrigerator  service  to  such  tenant shall be conclusively
   46  presumed to be equal to such landlord's cost of the same,  and,  if  the
   47  tax  under  this  section  was  imposed on the sale to such landlord, no
   48  additional tax under this section shall be owing on  the  sale  by  such
   49  landlord to such tenant. If, however, the tax under this section was not
   50  imposed  on such sale to the landlord, then such landlord on the sale to
   51  its tenant shall file a return hereunder based on such  landlord's  cost
   52  (including any associated transportation cost) of such gas, electricity,
   53  steam,  water  or refrigeration or gas, electric, steam, water or refri-
   54  gerator service.
   55    (5) "Gross income"] Provided further, "gross income" with  respect  to
   56  such  persons  described  in  paragraph  (a)  of  this  subdivision also

       S. 6295                            14                            A. 9295

    1  includes profits from the sale of securities; also profits from the sale
    2  of real property growing out of the ownership or use of or  interest  in
    3  such  property;  also  profit  from the sale of personal property (other
    4  than property of a kind which would properly be included in the invento-
    5  ry  of  the  taxpayer  if on hand at the close of the period for which a
    6  return is made); also receipts from interest, dividends, and  royalties,
    7  derived  from  sources within this state other than such as are received
    8  from a corporation a majority of whose voting  stock  is  owned  by  the
    9  taxpaying  utility,  without  any  deduction  therefrom for any expenses
   10  whatsoever incurred in connection with the receipt thereof, also profits
   11  from any transaction (except sales for resale and rentals)  within  this
   12  state whatsoever;
   13    (3)  When  used  in reference to persons described in paragraph (b) of
   14  subdivision one of this section,  the  words  "gross  income"  mean  and
   15  include  all  receipts received in or by reason of any sale, conditional
   16  or otherwise, made or services rendered, in this state of the  transpor-
   17  tation,  transmission  or distribution of gas or electricity by means of
   18  conduits, mains, pipes, wires, lines or the like, including cash,  cred-
   19  its and property of any kind or nature (whether or not such sale is made
   20  or such service is rendered for profit), without any deduction therefrom
   21  on  account  of  property  sold,  the  cost  of materials used, labor or
   22  services or other costs, interest or discount paid, or any other expense
   23  whatsoever. Provided, however, receipts from the following  sales  shall
   24  be excluded:
   25    (i)  sales  of the transportation, transmission or distribution of gas
   26  or electricity to (A) a utility (excluding a public authority) which  is
   27  supervised  by  this  state or another jurisdiction (where an element of
   28  such supervision includes rate regulation and, for a utility  supervised
   29  by  another  jurisdiction, such supervision includes rate regulation and
   30  such gas or electricity is delivered for  ultimate  consumption  or  use
   31  outside  this state), (B) a municipality which owns and operates facili-
   32  ties which are used to generate or distribute electricity or  distribute
   33  gas  and  which  distributes and sells such electricity or gas solely at
   34  retail, solely within its  respective  jurisdiction,  or  (C)  a  public
   35  authority of this state where such public authority is primarily engaged
   36  in the generation and transmission or distribution of electricity or the
   37  distribution  of  electricity or gas and at least ninety-five percent of
   38  the assets of which are so devoted, provided, that, if the service  area
   39  or district of the authority is less than the entire state, the excluded
   40  receipt  shall be limited to receipts derived from the sale of transpor-
   41  tation, transmission or distribution of gas or electricity, which gas or
   42  electricity will be sold by such authority at retail within its  service
   43  area  or  district; where, as the case may be, such utility or authority
   44  purchasing such transportation, transmission or distribution  sells  the
   45  gas or electricity being so transported, transmitted or distributed;
   46    (ii)  sales  of  the  transportation,  transmission or distribution of
   47  electricity to a municipality where the  electricity  being  transported
   48  has been purchased by such municipality and has been generated solely by
   49  and  purchased  solely from the state or a public authority of the state
   50  (except where the electricity being  transported  constitutes  temporary
   51  substitution  power  being supplied during outages or periods of reduced
   52  output) and where  such  municipality  purchasing  such  transportation,
   53  transmission  or  distribution sells solely at retail, solely within its
   54  respective jurisdiction, the electricity being so transported, transmit-
   55  ted or distributed; or

       S. 6295                            15                            A. 9295

    1    (iii) sales of the transportation, transmission or distribution of gas
    2  or electricity to corporations and associations which are organized  and
    3  operated  exclusively for religious, charitable or educational purposes,
    4  no part of the net earnings of  which  inures  to  the  benefit  of  any
    5  private  shareholder or individual, and which are described in paragraph
    6  four of subdivision (a) of section eleven hundred sixteen of this  chap-
    7  ter where such organization resells such transportation, transmission or
    8  distribution as part of a bundled gas or electric service as landlord to
    9  its tenants in buildings owned by such organization;
   10    (4)  Provided,  further, receipts received from the sale of the trans-
   11  portation, transmission or distribution of gas or electricity shall mean
   12  the receipts  received  from  customers  representing  the  noncommodity
   13  charges for gas or electric service; and
   14    (d)  [the  words  "gross  operating  income" mean and include receipts
   15  received in or by reason of any sale, conditional or otherwise, made for
   16  ultimate consumption or use by the purchaser of gas, electricity, steam,
   17  water or refrigeration, or in or by reason of the  furnishing  for  such
   18  consumption  or  use  of  gas,  electric,  steam,  water or refrigerator
   19  service in this state, including cash, credits and property of any  kind
   20  or nature, without any deduction therefrom on account of the cost of the
   21  property  sold,  the  cost of materials used, labor or services or other
   22  costs, interest or discount paid,  or  any  other  expenses  whatsoever.
   23  Provided,  however,  there shall be excluded from gross operating income
   24  receipts representing the amount received from the resale of the  trans-
   25  portation,  transmission  or  distribution of gas or electricity in this
   26  state where such  transportation,  transmission  or  distribution  being
   27  resold  is  provided  by a utility subject to tax under paragraph (b) of
   28  subdivision one of this section; the receipts  representing  the  amount
   29  received  from  resale  of such transportation, transmission or distrib-
   30  ution shall be the amount received for such transportation, transmission
   31  or distribution by such utility which initially provided such  transpor-
   32  tation,  transmission or distribution.  Provided, further, sales of gas,
   33  electricity, steam, water or  refrigeration  or  gas,  electric,  steam,
   34  water  or refrigerator service to a landlord that is a person as defined
   35  in this subdivision for  resale  by  such  landlord  to  a  tenant,  for
   36  consumption by such tenant as an incident to such landlord's activity of
   37  renting  premises  to  such  tenant, shall be subject to the tax imposed
   38  under this section even though such sales are not for ultimate  consump-
   39  tion by such landlord. Provided, further, receipts derived by a landlord
   40  from  the resale of such gas, electricity, steam, water or refrigeration
   41  or furnishing gas, electric, steam, water  or  refrigerator  service  to
   42  such  tenant  shall  be  conclusively presumed to be equal to such land-
   43  lord's cost of the same, and, if the tax under this section was  imposed
   44  on the sale to such landlord, no additional tax under this section shall
   45  be  owing  on the sale by such landlord to such tenant. If the tax under
   46  this section was not imposed on such sale to  the  landlord,  then  such
   47  landlord  on  the sale to its tenant shall file a return hereunder based
   48  on such landlord's cost (including any associated  transportation  cost)
   49  of  such  gas,  electricity, steam, water or refrigeration or gas, elec-
   50  tric, steam, water or refrigerator service; (e)] the term  "telecommuni-
   51  cation  services" shall have the same meaning as such term is defined in
   52  section one hundred eighty-six-e of this article[; (f) The  word  "prem-
   53  ises"  means  and  includes  any  real property or part thereof, and any
   54  structure thereon or space therein; and (g) the word "tenant" means  and
   55  includes  a  person  paying,  or required to pay, rent for premises as a
   56  lessee, sublessee, licensee or concessionaire].

       S. 6295                            16                            A. 9295

    1    4. Every utility subject to tax hereunder shall  file,  on  or  before
    2  March fifteenth of each year, a return for the year ended on the preced-
    3  ing December thirty-first, [except that the year ended on December thir-
    4  ty-first, nineteen hundred seventy-six shall be deemed, for the purposes
    5  of  this  subdivision, to have commenced on June first, nineteen hundred
    6  seventy-six, including any period for which the tax imposed hereby or by
    7  any amendment hereof is effective,] each of which returns  shall  state,
    8  as  the  case may be, the gross income or that part of gross [operating]
    9  income derived from the transportation, transmission or distribution  of
   10  gas  or  electricity for the period covered by each such return. Returns
   11  shall be filed with the commissioner [of taxation and finance] on a form
   12  to be furnished by the commissioner for such purpose and  shall  contain
   13  such  other  data, information or matter as the commissioner may require
   14  to be included therein. Notwithstanding the foregoing provisions of this
   15  subdivision, the commissioner may require any utility to file an  annual
   16  return,  which  shall  contain  any  data specified by the commissioner,
   17  regardless of whether the utility is subject to tax under this section[;
   18  and the commissioner may require a landlord selling  to  a  tenant  gas,
   19  electric,  steam,  water  or  refrigeration or furnishing gas, electric,
   20  steam, water or refrigerator service, where the same has been  subjected
   21  to  tax  under this section on the sale to such landlord, to file, on or
   22  before the fifteenth day of March of each year,  an  information  return
   23  for the year ended on the preceding December thirty-first, covering such
   24  year in such form and containing such data as the commissioner may spec-
   25  ify].  Every  return  shall  have annexed thereto a certification by the
   26  head of the utility making the same, or of the owner or of a  co-partner
   27  thereof,  or of a principal officer of the corporation, if such business
   28  be conducted by  a  corporation,  to  the  effect  that  the  statements
   29  contained therein are true.
   30    10.  Notwithstanding  any other provision contained in this chapter or
   31  any other  law,  any  surcharge  collected  or  any  administrative  fee
   32  retained  by  any telephone corporation acting as collection agent for a
   33  municipality pursuant to the provisions of article six of the county law
   34  shall not be considered as nor included in the  determination  of  gross
   35  income [or gross operating income] of or by such corporation.
   36    §  6.  Paragraph (a) of subdivision 1 of section 186-c of the tax law,
   37  as amended by section 123 of part A of chapter 389 of the laws of  1997,
   38  is amended to read as follows:
   39    (a)  (1)  Every  utility  doing  business in the metropolitan commuter
   40  transportation district shall pay a tax surcharge, in  addition  to  the
   41  tax imposed by section one hundred eighty-six-a of this article, for all
   42  or  any parts of its taxable years commencing on or after January first,
   43  nineteen hundred eighty-two but ending before December thirty-first, two
   44  thousand one, to be computed at the rate of eighteen per centum  of  the
   45  tax  imposed  under section one hundred eighty-six-a of this article for
   46  such taxable years or any part  of  such  taxable  years  ending  before
   47  December thirty-first, nineteen hundred eighty-three after the deduction
   48  of  any  credits otherwise allowable under this article, and at the rate
   49  of seventeen per centum of the tax imposed under such section  for  such
   50  taxable  years  or  any  part  of  such taxable years ending on or after
   51  December thirty-first, nineteen hundred eighty-three after the deduction
   52  of credits otherwise allowable under this  article  except  any  utility
   53  credit  provided  for  by  article thirteen-A of this chapter; provided,
   54  however, that such rates of tax surcharge shall be applied only to  that
   55  portion  of  the  tax  imposed under section one hundred eighty-six-a of
   56  this article after the deduction of credits  otherwise  allowable  under

       S. 6295                            17                            A. 9295

    1  this  article,  except  any utility credit provided for by article thir-
    2  teen-A of this chapter, which is attributable to  the  taxpayer's  gross
    3  income or gross operating income from business activity carried on with-
    4  in  the  metropolitan  commuter  transportation  district; and provided,
    5  further, that the tax surcharge imposed by this  section  shall  not  be
    6  imposed upon any taxpayer for more than two hundred twenty-eight months.
    7    (2)  Provided  however,  that  (A) commencing October first,  nineteen
    8  hundred ninety-eight such tax surcharge shall be calculated  as  if  the
    9  tax  imposed under section one hundred eighty-six-a of this article were
   10  imposed at a rate of three and  one-half  percent,  and  (B)  commencing
   11  January  first,  two  thousand, in the case of (i) the tax imposed under
   12  paragraph (a) of subdivision one of section one hundred eighty-six-a  of
   13  this  article (relating to providers of telecommunications services) and
   14  (ii) the tax imposed under paragraph (b) of subdivision one  of  section
   15  one  hundred  eighty-six-a  of this article on gross income derived from
   16  the transportation, transmission or distribution of gas or  electricity,
   17  such  tax  surcharge  shall  be  calculated  as if the tax imposed under
   18  section one hundred eighty-six-a of this article were imposed at a  rate
   19  of three and one-half percent.
   20    §  7. Paragraph (b) of subdivision 2 of section 189 of the tax law, as
   21  amended by chapter 410 of the laws  of  1991,  is  amended  to  read  as
   22  follows:
   23    (b)  [The]  Through  the  taxable  month of December, nineteen hundred
   24  ninety-nine, the tax shall be equal to four and one-quarter percent; for
   25  each of the taxable months during the calendar years  two  thousand  and
   26  two  thousand  one, the tax shall be equal to two and one-tenth percent;
   27  for each of the taxable months during the  calendar  year  two  thousand
   28  two, the tax shall be equal to one and seven-tenths percent; for each of
   29  the  taxable months during the calendar year two thousand three, the tax
   30  shall be equal to eight-tenths of one  percent;  for  each  the  taxable
   31  months  during  the  calendar  year  two thousand four, the tax shall be
   32  equal to four-tenths of one percent; and for each of the taxable  months
   33  during the calendar year two thousand five and thereafter, the tax shall
   34  be  equal to zero percent of the consideration given or contracted to be
   35  given by the gas importer for the gas services imported or caused to  be
   36  imported  into  this  state  by  such  gas  importer  for its own use or
   37  consumption in this state.
   38    § 7-a. Sections 189 and 189-a of the tax law are REPEALED.
   39    § 8. Subdivision 3 of section 192 of the tax law is REPEALED.
   40    § 9. Subdivision 1 of section 197-a of the  tax  law,  as  amended  by
   41  chapter 2 of the laws of 1995, is amended to read as follows:
   42    1.  Every  taxpayer  subject  to  the taxes imposed under sections one
   43  hundred eighty-two, one hundred eighty-two-a, former section one hundred
   44  eighty-two-b, one hundred eighty-four,  [one  hundred  eighty-six,]  one
   45  hundred  eighty-six-a  or one hundred eighty-six-e of this chapter shall
   46  make a declaration of its estimated tax for the  current  taxable  year,
   47  containing  such  information as the commissioner may prescribe by regu-
   48  lations or  instructions,  if  such  estimated  tax  can  reasonably  be
   49  expected to exceed one thousand dollars. If a taxpayer is subject to the
   50  tax  surcharge  imposed  under  section  one hundred eighty-four-a[, one
   51  hundred eighty-six-b] or one hundred eighty-six-c of  this  chapter  and
   52  such  taxpayer's  estimated  tax under section one hundred eighty-four[,
   53  one hundred eighty-six] or one hundred  eighty-six-a  of  this  chapter,
   54  respectively, can reasonably be expected to exceed one thousand dollars,
   55  such  taxpayer  shall  also  make  a  declaration  of  its estimated tax
   56  surcharge for the current taxable year.

       S. 6295                            18                            A. 9295

    1    § 10. Paragraph (a) of subdivision 1  and  subdivision  6  of  section
    2  197-b  of  the tax law, as amended by chapter 2 of the laws of 1995, are
    3  amended to read as follows:
    4    (a)  For  taxable  years beginning on or after January first, nineteen
    5  hundred seventy-seven, every taxpayer subject to tax under  section  one
    6  hundred eighty-two, one hundred eighty-two-a, former section one hundred
    7  eighty-two-b,  one  hundred  eighty-four,  [one hundred eighty-six,] one
    8  hundred eighty-six-a or one hundred eighty-six-e, shall pay in each such
    9  year an amount equal to twenty-five percent of  the  tax  imposed  under
   10  each  of such sections for the preceding taxable year, if such preceding
   11  year's tax exceeded one thousand dollars. If such preceding  year's  tax
   12  under  section  one  hundred  eighty-four, [one hundred eighty-six,] one
   13  hundred eighty-six-a or one hundred eighty-six-e exceeded  one  thousand
   14  dollars  and  such  taxpayer  is subject to the tax surcharge imposed by
   15  section one hundred eighty-four-a[, one  hundred  eighty-six-b]  or  one
   16  hundred eighty-six-c, respectively, such taxpayer shall also pay in each
   17  such  year  an  amount equal to twenty-five percent of the tax surcharge
   18  imposed under such section for the preceding taxable year.  Such  amount
   19  or  amounts shall be paid with the return or report required to be filed
   20  with respect to such tax or tax surcharge  for  such  preceding  taxable
   21  year  or  with  an application for extension of the time for filing such
   22  return or report.
   23    6. As used in this section, "the preceding year's tax" means  the  tax
   24  imposed  upon  the  taxpayer  by  section one hundred eighty-two, former
   25  section one hundred eighty-two-b, one hundred eighty-four, [one  hundred
   26  eighty-six,]  one  hundred  eighty-six-a or one hundred eighty-six-e for
   27  the preceding taxable year.
   28    § 11. Subdivision 9 of section 208 of the tax law is amended by adding
   29  two new paragraphs (c-2) and (c-3) to read as follows:
   30    (c-2) Adjustments by qualified public utilities. (1) In the case of  a
   31  taxpayer which is a qualified public utility, entire net income shall be
   32  computed with the adjustments set forth in this paragraph.
   33    (2)  Definitions.  (A)  Qualified  public utility. The term "qualified
   34  public utility" means a taxpayer which:
   35    (i)  on  December  thirty-first,  nineteen  hundred  ninety-nine,  was
   36  subject  to the ratemaking supervision of the state department of public
   37  service, and
   38    (ii) for the year ending on December  thirty-first,  nineteen  hundred
   39  ninety-nine,  was subject to tax under former section one hundred eight-
   40  y-six of this chapter.
   41    (B) Transition property. The term "transition property" means property
   42  placed in service by the taxpayer before January  first,  two  thousand,
   43  for  which a depreciation deduction is allowed under section one hundred
   44  sixty-seven of the internal revenue code.
   45    (3) Federal depreciation disallowed. With respect to transition  prop-
   46  erty,  the  deduction  for  federal income tax purposes for depreciation
   47  shall not be allowed.
   48    (4) New York depreciation. With  respect  to  transition  property,  a
   49  deduction  shall  be  allowed  for the depreciation expense shown on the
   50  books and records of the taxpayer for the taxable year and determined in
   51  accordance with generally accepted accounting principles.
   52    (5) Regulatory assets. A deduction shall be allowed for amounts recog-
   53  nized as expense on the books and records of the taxpayer for the  taxa-
   54  ble  year,  which  amounts were recognized as expense for federal income
   55  tax purposes in a taxable year ending  on  or  before  December  thirty-
   56  first, nineteen hundred ninety-nine, where:

       S. 6295                            19                            A. 9295

    1    (A) such amounts represent expenditures which, when made, were charged
    2  to  a  deferred  debit account or similar asset account on the books and
    3  records of the taxpayer, and where
    4    (B) the recognition of expense on the books and records of the taxpay-
    5  er  is matched by revenue stemming from a procedure or adjustment allow-
    6  ing the recovery of such expenditures, and where
    7    (C) such revenue is recognized for federal income tax purposes in  the
    8  taxable year.
    9    (6) Basis for gain or loss. (A) Recognition transactions.  (i) General
   10  rule  - book basis. Except as provided in subclause (ii) of this clause,
   11  where transition property is sold or otherwise disposed of in the  taxa-
   12  ble  year  in a transaction of the type requiring recognition of gain or
   13  loss for federal income tax purposes,  the  basis  for  determining  the
   14  amount  of such gain or loss under this article shall be the cost of the
   15  property less the accumulated depreciation on the property determined on
   16  the books and records of  the  taxpayer  in  accordance  with  generally
   17  accepted accounting principles.
   18    (ii)  Qualified  gain  -  New  York basis. Where a sale or disposition
   19  described in subclause (i) of this clause results in recognition of gain
   20  for federal income tax purposes, and where either (I)  such  recognition
   21  occurs  in  a taxable year ending after nineteen hundred ninety-nine and
   22  before two thousand ten, or (II) such recognition is with respect  to  a
   23  nuclear  electric  generating  facility,  the  basis for determining the
   24  amount of such gain under this article shall be the cost of the property
   25  less the aggregate of the New York depreciation deductions on the  prop-
   26  erty determined under subparagraph four of this paragraph.
   27    (iii)  No  conversion  of  gain  to  loss. In the event that the basis
   28  determined under subclause (ii) of this clause results in  determination
   29  of  a  loss  on the sale or disposition of the property, no gain or loss
   30  shall be recognized under this article with  respect  to  such  sale  or
   31  disposition.
   32    (B)  Nonrecognition transactions. (i) Carryover basis. (I) where tran-
   33  sition property is disposed of ("original disposition") in a transaction
   34  of a type requiring deferral of recognition of gain or loss for  federal
   35  income tax purposes, and where
   36    (II)  there  is  a  subsequent recognition of gain or loss for federal
   37  income tax purposes ("clause B gain or loss"), the amount  of  which  is
   38  determined by reference, in whole or in part, to the basis of such tran-
   39  sition property ("underlying transition property"), then
   40    (III)  the  amount  of  such  clause B gain or loss under this article
   41  shall be adjusted as provided in subclause (ii) or (iii) of this clause.
   42    (ii) General rule - book  basis  adjustment.  Except  as  provided  in
   43  subclause  (iii)  of  this  clause, the amount of clause B gain shall be
   44  reduced, or the amount of clause B loss  increased,  by  the  amount  by
   45  which  the  book basis of the underlying transition property on the date
   46  of original disposition (determined using the  provisions  of  subclause
   47  (i)  of  clause (A) of this subparagraph) exceeds the federal income tax
   48  basis of such property on such date.
   49    (iii) Qualified gain - New York basis adjustment. Where clause B  gain
   50  either  (I) occurs in a taxable year ending after nineteen hundred nine-
   51  ty-nine and before two thousand ten, or (II) is with respect to a nucle-
   52  ar electric generating facility, the amount  of  such  gain  under  this
   53  article shall be reduced, but not below zero, by the amount by which the
   54  New  York  basis  of  the  underlying transition property on the date of
   55  original disposition (determined using the provisions of subclause  (ii)

       S. 6295                            20                            A. 9295

    1  of clause (A) of this subparagraph) exceeds the federal income tax basis
    2  of such property on such date.
    3    (iv)  Application  to  replacement  property and transferee taxpayers.
    4  This clause shall apply whether the clause B gain or loss:
    5    (I) is with respect to either transition property or depreciable prop-
    6  erty the basis of which is determined by reference to transition proper-
    7  ty, or
    8    (II) is recognized by either  a  qualified  public  utility  or  by  a
    9  taxpayer  which  is  a transferee of transition property (whether or not
   10  such transferee is a qualified public utility, notwithstanding  subpara-
   11  graph one of this paragraph).
   12    (c-3)  Depreciation adjustments by qualified power producers and pipe-
   13  line companies. (1) In the case of  a  qualified  taxpayer,  entire  net
   14  income  shall be computed with the depreciation adjustments set forth in
   15  this paragraph.
   16    (2) Definitions. (A) Qualified taxpayer. The term "qualified taxpayer"
   17  means a qualified power producer or a qualified interstate pipeline.
   18    (B) Qualified power producer.  The  term  "qualified  power  producer"
   19  means a taxpayer which:
   20    (i)  on  December  thirty-first, nineteen hundred ninety-nine, was not
   21  subject to the ratemaking supervision of the state department of  public
   22  service, and
   23    (ii)  for  the  year ending on December thirty-first, nineteen hundred
   24  ninety-nine, was subject to tax under former section one hundred  eight-
   25  y-six of this chapter on account of its being principally engaged in the
   26  business of supplying electricity.
   27    (C)  Qualified  interstate  pipeline.  The  term "qualified interstate
   28  pipeline" means a taxpayer which:
   29    (i)  on  December  thirty-first,  nineteen  hundred  ninety-nine,  was
   30  subject  to  the ratemaking supervision of the federal energy regulatory
   31  commission, and
   32    (ii) for the year ending on December  thirty-first,  nineteen  hundred
   33  ninety-nine,  was subject to tax under sections one hundred eighty-three
   34  and one hundred eighty-four of this chapter  on  account  of  its  being
   35  principally engaged in the business of interstate pipeline transmission.
   36    (D) Transition property. The term "transition property" means property
   37  placed  in  service  by  a  qualified taxpayer before January first, two
   38  thousand, for which a depreciation deduction is  allowed  under  section
   39  one hundred sixty-seven of the internal revenue code.
   40    (3)  Federal depreciation disallowed. With respect to transition prop-
   41  erty, the deduction for federal income  tax  purposes  for  depreciation
   42  shall not be allowed.
   43    (4)  New  York  depreciation.  With  respect to transition property, a
   44  deduction shall be allowed for  the  depreciation  expense  computed  as
   45  provided in this subparagraph.
   46    (A)  All  transition  property  shown  on the books and records of the
   47  taxpayer on January first, two thousand shall be  treated  as  a  single
   48  asset placed in service on such date. The New York basis for purposes of
   49  computing  the  depreciation deduction on such single asset shall be the
   50  net book value of such transition property determined on the  first  day
   51  of  the  federal taxable year ending in two thousand (or on the date any
   52  such property is placed in service, if later) adjusted  as  provided  in
   53  clause (B) of this subparagraph.
   54    (B)  If  transition property is sold or otherwise disposed of, the New
   55  York basis of the single asset shall be reduced on the date of such sale

       S. 6295                            21                            A. 9295

    1  or disposition by the amount of the adjusted federal tax basis  of  such
    2  property on such date.
    3    (C)  The  New York depreciation deduction allowed for any taxable year
    4  with respect to such single asset shall be computed using the  straight-
    5  line method, a twenty-year life, and a salvage value of zero.
    6    (D) For purposes of this subparagraph, the term "net book value" means
    7  cost  reduced by accumulated depreciation shown on the books and records
    8  of the taxpayer and determined, in the case of a qualified power produc-
    9  er, in accordance with generally accepted accounting principles; and  in
   10  the  case  of  a  qualified  interstate pipeline, in accordance with the
   11  taxpayer's regulatory reports filed with the federal  energy  regulatory
   12  commission.
   13    § 12. Subdivision 4 of section 209 of the tax law, as amended by chap-
   14  ter 659 of the laws of 1993, is amended to read as follows:
   15    4.  Corporations liable to tax under sections one hundred eighty-three
   16  to one hundred [eighty-six] eighty-five, inclusive, corporations taxable
   17  under articles thirty-two and thirty-three of this  chapter,  any  trust
   18  company organized under a law of this state all of the stock of which is
   19  owned  by  not  less  than twenty savings banks organized under a law of
   20  this state, bank holding companies filing a combined return  in  accord-
   21  ance  with subdivision (f) of section fourteen hundred sixty-two of this
   22  chapter and housing companies organized and operating  pursuant  to  the
   23  provisions of article two or article five of the private housing finance
   24  law  and  housing  development  fund companies organized pursuant to the
   25  provisions of article eleven of the private housing  finance  law  shall
   26  not be subject to tax under this article.
   27    §  13. Paragraph (b) of subdivision 1-c of section 210 of the tax law,
   28  as amended by chapter 760 of the laws of 1992, is  amended  to  read  as
   29  follows:
   30    (b) is not a corporation over fifty percent of the number of shares of
   31  stock of which entitling the holders thereof to vote for the election of
   32  directors or trustees is owned by a taxpayer which (1) is subject to tax
   33  under this article; section one hundred eighty-three, one hundred eight-
   34  y-four[,]  or  one  hundred  eighty-five  [or one hundred eighty-six] of
   35  article nine; article thirty-two or thirty-three of  this  chapter,  and
   36  (2) does not qualify as a small business corporation as defined in para-
   37  graph  three  of  subsection (c) of section twelve hundred forty-four of
   38  the internal revenue code (without regard  to  the  second  sentence  of
   39  subparagraph  (A) thereof) as of the last day of its taxable year ending
   40  within or with the taxable year of the taxpayer,
   41    § 14. Clause (B) of subparagraph 2 of paragraph (a) of  subdivision  3
   42  of  section 210 of the tax law, as amended by chapter 760 of the laws of
   43  1992, is amended to read as follows:
   44    (B) services performed within the state, provided, however,  that  (i)
   45  in  the case of a taxpayer engaged in the business of publishing newspa-
   46  pers  or  periodicals,  receipts  arising  from  sales  of   advertising
   47  contained  in  such  newspapers and periodicals shall be deemed to arise
   48  from services performed within the state to the extent that such newspa-
   49  pers and periodicals are delivered to  points  within  the  state,  (ii)
   50  receipts from an investment company arising from the sale of management,
   51  administration or distribution services to such investment company shall
   52  be  deemed  to  arise  from  services  performed within the state to the
   53  extent set forth in subparagraph six of this paragraph [and],  (iii)  in
   54  the case of taxpayers principally engaged in the activity of air freight
   55  forwarding  acting  as principal and like indirect air carriage receipts
   56  arising from such activity shall arise from  services  performed  within

       S. 6295                            22                            A. 9295

    1  the  state  as follows: one hundred percent of such receipts if both the
    2  pickup and delivery associated with such receipts are made in this state
    3  and fifty percent of such receipts if  either  the  pickup  or  delivery
    4  associated  with  such  receipts  is made in this state, and (iv) in the
    5  case of receipts arising from the transportation or transmission of  gas
    6  through  pipes,  the  portion of such receipts which constitute receipts
    7  from services performed within the state shall be the product of (I) the
    8  total of such receipts and (II) a fraction, the numerator  of  which  is
    9  the taxpayer's transportation units within the state and the denominator
   10  of  which  is the taxpayer's transportation units within and without the
   11  state. A transportation unit is the transportation of one cubic foot  of
   12  gas over a distance of one mile,
   13    § 15. Subparagraph 1 of paragraph (j) of subdivision 12 of section 210
   14  of the tax law, as amended by chapter 61 of the laws of 1989, is amended
   15  to read as follows:
   16    (1)  over fifty percent of the number of shares of stock entitling the
   17  holders thereof to vote for the election of  directors  or  trustees  is
   18  owned  or  controlled,  either  directly  or  indirectly,  by a taxpayer
   19  subject to tax under this article; section one hundred eighty-three, one
   20  hundred eighty-four[,] or one hundred eighty-five [or one hundred eight-
   21  y-six] of article nine; article thirty-two or thirty-three of this chap-
   22  ter; or
   23    § 16. Paragraph 3 of subsection (c) of section 1085 of the tax law, as
   24  added by chapter 166 of the laws of 1991, is amended to read as follows:
   25    (3) The provisions of this subsection and subsections (d) and  (e)  of
   26  this section shall apply to the failure of a taxpayer to file a declara-
   27  tion of estimated tax surcharge or the failure to pay all or any part of
   28  an  amount which is applied as an installment against such estimated tax
   29  surcharge pursuant to sections one hundred ninety-seven-a,  one  hundred
   30  ninety-seven-b, two hundred thirteen-a, two hundred thirteen-b, fourteen
   31  hundred  sixty, fourteen hundred sixty-one, fifteen hundred thirteen and
   32  fifteen hundred fourteen of this chapter. For purposes of applying  this
   33  section and subsections (d) and (e) of this section to the estimated tax
   34  surcharge,  where  appropriate the term "tax" shall be read to mean "tax
   35  surcharge," and the terms "amount required to be  paid,"  "amount  which
   36  would  be  required  to  be  paid,"  and  "amount  which would have been
   37  required to be paid" shall be computed as the product of (1) such amount
   38  computed without regard to the tax surcharges imposed under sections one
   39  hundred eighty-four-a, [one hundred eighty-six-b,] one  hundred  eighty-
   40  six-c, one hundred eighty-eight, two hundred nine-A, two hundred nine-B,
   41  fourteen  hundred  fifty-five-A,  fourteen hundred fifty-five-B, fifteen
   42  hundred five-a, and fifteen hundred twenty, and (2) the MTA  percentage.
   43  The  term  "MTA  percentage"  shall mean the product of (A) the tax rate
   44  applicable under such sections imposing  such  surcharges  and  (B)  the
   45  percentage  utilized  in determining the portion of the taxpayer's busi-
   46  ness activity carried on within the metropolitan commuter transportation
   47  district under such sections.
   48    § 17. Paragraph 9 of subsection (a) of section 1452 of the tax law, as
   49  amended by chapter 298 of the laws  of  1985,  is  amended  to  read  as
   50  follows:
   51    (9)  any  corporation sixty-five percent or more of whose voting stock
   52  is owned or controlled, directly or  indirectly,  by  a  corporation  or
   53  corporations  subject  to  article three-a of the banking law, or regis-
   54  tered under the federal bank holding company  act  of  nineteen  hundred
   55  fifty-six,  as  amended,  or  registered  as  a savings and loan holding
   56  company (but excluding a diversified savings and loan  holding  company)

       S. 6295                            23                            A. 9295

    1  under  the federal national housing act, as amended, or by a corporation
    2  or corporations described in any of the  foregoing  paragraphs  of  this
    3  subsection,  provided  the corporation whose voting stock is so owned or
    4  controlled  is  principally  engaged  in a business, regardless of where
    5  conducted, which (i)  might  be  lawfully  conducted  by  a  corporation
    6  subject  to  article  three  of the banking law or by a national banking
    7  association or (ii) is so closely related  to  banking  or  managing  or
    8  controlling  banks  as  to be a proper incident thereto, as set forth in
    9  paragraph eight of subsection (c) of section four of  the  federal  bank
   10  holding  company  act  of  nineteen  hundred  fifty-six, as amended; and
   11  provided, further, that in no  event  shall  a  corporation  principally
   12  engaged  in  a business described in section one hundred eighty-three[,]
   13  or one hundred eighty-four, or section one hundred eighty-six as it  was
   14  in  effect  on  December  thirty-first, nineteen hundred ninety-nine, of
   15  this chapter be subject to the tax imposed under this article if any  of
   16  its business receipts from such principally engaged in business are from
   17  other  than  a corporation (A) which owns or controls, directly or indi-
   18  rectly, sixty-five percent or more of its voting stock,  or  (B)  sixty-
   19  five  percent  or  more  of  whose  voting stock is owned or controlled,
   20  directly or indirectly, by the corporation engaged in such business,  or
   21  (C)  sixty-five  percent  or  more  of  whose  voting  stock is owned or
   22  controlled, directly or indirectly, by the same interest.
   23    § 18. Section 25-u of the general city law, as added by chapter 551 of
   24  the laws of 1985, is amended to read as follows:
   25    § 25-u. Construction. Nothing  contained  in  this  article  shall  be
   26  construed  as  reducing  the  amount of a receipt for sales tax purposes
   27  under any of the sales taxes imposed or authorized  by  article  twenty-
   28  eight  or twenty-nine of the tax law; or as reducing the gross receipts,
   29  the gross income or the gross operating income subject to  tax  pursuant
   30  to  section  [one hundred eighty-six or] one hundred eighty-six-a of the
   31  tax law or authorized to be subjected to tax by section  twelve  hundred
   32  one  of the tax law. The burden of establishing eligibility to claim the
   33  benefits of this article shall rest with the party claiming  such  bene-
   34  fits.
   35    § 19. Section 25-x of the general city law, as added by chapter 331 of
   36  the laws of 1987, is amended to read as follows:
   37    § 25-x. Construction.  Nothing  contained  in  this  article  shall be
   38  construed as reducing the amount of a receipt  for  sales  tax  purposes
   39  under  any  of  the sales taxes imposed or authorized by article twenty-
   40  eight or twenty-nine of the tax law; or as reducing the gross  receipts,
   41  the  gross  income or the gross operating income subject to tax pursuant
   42  to section [one hundred eighty-six or] one hundred eighty-six-a  of  the
   43  tax  law  or authorized to be subjected to tax by section twelve hundred
   44  one of the tax law. The burden of establishing eligibility to claim  the
   45  benefits of this article shall rest with party claiming such benefits.
   46    §  20.  Subdivision 2 of section 1020-q of the public authorities law,
   47  as added by chapter 517 of the laws of  1986,  is  amended  to  read  as
   48  follows:
   49    2.  The  authority shall also make payments in lieu of taxes for those
   50  taxes which would otherwise be imposed upon  LILCO,  if  LILCO  were  to
   51  continue  in  operation,  pursuant to sections [one hundred eighty-six,]
   52  one hundred eighty-six-a[,] and one hundred eighty-six-c of the tax law,
   53  and to former sections one hundred eighty-six and  one  hundred  eighty-
   54  six-b  [and  one  hundred eighty-six-c of the tax law] of the tax law as
   55  such sections one hundred eighty-six and one hundred  eighty-six-b  were
   56  in  effect on December thirty-first, nineteen hundred ninety-nine, para-

       S. 6295                            24                            A. 9295

    1  graph (b) of subdivision four of section one hundred seventy-four of the
    2  navigation law, and any taxes imposed by a city pursuant to the authori-
    3  zation granted by section twenty-b of the general city law.
    4    §  21.  Transition  provisions  for  former section 186 taxpayers. (a)
    5  Previous year's tax. In the case of a taxpayer subject to section 186 of
    6  the tax law, for a taxable year ending on December 31,  1999,  which  is
    7  subject to tax under article 9-A or 32 of the tax law for a taxable year
    8  beginning  on  January  1,  2000, by reason of this act, with respect to
    9  such taxable year under such article 9-A or 32 the  term  "tax"  in  the
   10  phrase  "tax shown on the return of the taxpayer for the preceding taxa-
   11  ble year" in paragraph 1 of subsection (d) of section 1085  of  the  tax
   12  law,  and  in  the  phrase  "tax  shown on the taxpayer's report for the
   13  preceding taxable year" in paragraph a of subdivision 2 of  section  213
   14  of  the  tax  law, and in the phrase "tax shown on the taxpayer's return
   15  for the preceding taxable year" in paragraph  1  of  subsection  (b)  of
   16  section  1463 of the tax law, shall be read to refer to the tax shown on
   17  such taxpayer's return under such former section 186 of the tax law  for
   18  such taxable year ending on December 31, 1999.
   19    (b)  Overpayments.  In  the  case  of a taxpayer subject to the former
   20  section 186 of the tax law for a taxable year  ending  on  December  31,
   21  1999, which is subject to tax under article 9-A or 32 of the tax law for
   22  a  taxable year beginning on January 1, 2000, by reason of this act, any
   23  amount of overpayment of tax claimed on  such  taxpayer's  report  under
   24  such  section  186  for  such  taxable year ending on December 31, 1999,
   25  shall be subject to the provisions of  section  1086  of  the  tax  law,
   26  except  that  the  references to credits of such overpayment against tax
   27  liability or estimated tax shall be  deemed  to  be  references  to  tax
   28  liability and estimated tax under such article 9-A or 32 of the tax law,
   29  as applicable.
   30    (c) Mandatory first installments. Every taxpayer which (1) was subject
   31  to tax under former section 186 of the tax law for a taxable year ending
   32  on December 31, 1999,
   33    (2)  which  had  a  tax  liability under such section for such year in
   34  excess of one thousand dollars, and
   35    (3) which is subject to tax under article 9-A or 32 of the tax law for
   36  a taxable year beginning on January 1, 2000,  by  reason  of  this  act,
   37  shall  make  a payment to the commissioner of taxation and finance on or
   38  before March 15, 2000. Such payment shall be made in an amount equal  to
   39  25  percent of the taxpayer's liability for tax under former section 186
   40  of the tax law for such taxable year ending on December 31, 1999,  plus,
   41  if  the  taxpayer  is subject to the tax surcharge imposed under section
   42  209-b of the tax law for the taxable year beginning on January 1,  2000,
   43  25  percent  of the taxpayer's liability for tax surcharge under section
   44  186-b of the tax law for the taxable year ending on December  31,  1999.
   45  Such  payment  shall be made pursuant to a procedure established by such
   46  commissioner. Such commissioner may treat a  payment  made  pursuant  to
   47  subdivision  1 of section 197-b of the tax law computed based on tax due
   48  under former section 186 of the tax law for the taxable year  ending  on
   49  December  31,  1999,  as the payment required to be made pursuant to the
   50  first sentence of this subdivision.  Such  payment  shall  constitute  a
   51  payment of estimated tax with respect to such taxpayer's liability under
   52  such  article  9-A or 32 of the tax law for such taxable year, and shall
   53  be deemed to constitute a payment made pursuant to  subdivision  (a)  of
   54  section  213-b  or  subsection (a) of section 1461, respectively, of the
   55  tax law. In addition, other payments of estimated tax made  pursuant  to
   56  subdivision  2  of  section  197-b  of the tax law in respect of the tax

       S. 6295                            25                            A. 9295

    1  imposed under former section 186 of the tax law or the surcharge imposed
    2  under former section 186-b of the tax law, for the taxable  year  ending
    3  December  31,  2000, shall be deemed to constitute payments of estimated
    4  tax  pursuant  to  subdivision (b) of section 213-b or subsection (b) of
    5  section 1461 of the tax law.
    6    (d) Credits. In the case of a taxpayer subject  to  tax  under  former
    7  section  186 of the tax law, for the taxable year ending on December 31,
    8  1999, which by reason of sections one through forty-seven of this act is
    9  subject to article 9-A or 32 of the tax law for a taxable year beginning
   10  on January 1, 2000, any portion of credit  allowed  under  section  187,
   11  187-a  or  187-b  of  the  tax  law for a taxable year under such former
   12  section 186 of the tax law ending before January 1, 2000, which may  not
   13  be  deducted  from tax due under such former section 186 for any taxable
   14  year under such article ending before January 1, 2000, shall be treated,
   15  for purposes of article 9-A or 32 of the tax law,  respectively,  as  an
   16  amount  of  credit allowed under subdivision 17, 23 or 24 of section 210
   17  of the tax law or subsection (c) or (f) of section 1456 of the tax  law,
   18  as  applicable, with respect to a taxable year under such article 9-A or
   19  32 of the tax law ending before January 1, 2000, but not deductible from
   20  tax due under such article 9-A or 32 of the tax law for  any  such  year
   21  ending before January 1, 2000.
   22    (e)  EIC  and Economic Development Zone EIC. In the case of a taxpayer
   23  subject to tax under former section 186 of the tax law for  the  taxable
   24  year  ending  December 31, 1999, which by reason of sections one through
   25  forty-seven of this act is subject to article 9-A of the tax law  for  a
   26  taxable  year  beginning  on  January 1, 2000, and which claims a credit
   27  under subdivision 12-C or 12-D of  section  210  of  the  tax  law  with
   28  respect  to its taxable year under such article 9-A of the tax law imme-
   29  diately succeeding such taxable year under article 9-A of  the  tax  law
   30  beginning  on January 1, 2000, the phrases "the taxable year immediately
   31  preceding the taxable year for which the credit under  such  subdivision
   32  twelve-B  is  allowed"  and  "the taxable year immediately preceding the
   33  taxable year for which the  credit  under  such  subdivision  twelve  is
   34  allowed"  shall  be deemed to refer to the taxpayer's taxable year under
   35  such former section 186 of the tax law which ends on December 31, 1999.
   36    (f) General savings provision. Notwithstanding the repeal of  sections
   37  186  and  186-b  of  the  tax law made by section three of this act, the
   38  repeal of sections 189 and 189-a of the tax law made by section  seven-a
   39  of  this  act, and the repeal of subdivision 3 of section 192 of the tax
   40  law made by section eight of this act, all provisions of the tax law and
   41  of any regulations adopted thereunder, with respect to  the  assessment,
   42  payment  or  payment over, determination, collection and refund of taxes
   43  or surcharges, imposed by such sections, and related interest and penal-
   44  ties, the filing of forms and reports and the  preservation  of  records
   45  for the purpose of the taxes or surcharges imposed by such sections, the
   46  civil  and  criminal  penalties  applicable  to  the  violation  of  the
   47  provisions of such sections, the secrecy of reports, and the disposition
   48  of revenues, shall continue in effect with regard to all liabilities for
   49  such taxes or surcharges (including any  penalty  and  interest  related
   50  thereto) incurred prior to such repeal or prior to the effective date of
   51  such amendment, as applicable.
   52    §  22.  Subdivision  (b)  of section 1101 of the tax law is amended by
   53  adding a new paragraph 22 to read as follows:
   54    (22) Gas and  electric  services.  Gas  service  means  "gas  and  gas
   55  service," and electric service means "electricity and electric service,"
   56  as  such  terms have customarily been used, and such gas and electricity

       S. 6295                            26                            A. 9295

    1  and such services have customarily been subject to tax,  under  subdivi-
    2  sion  (b) of section eleven hundred five of this article, and such terms
    3  shall also include, respectively,  gas  or  electricity,  itself,  as  a
    4  commodity,  or  as  part  of  an  integrated (bundled) service including
    5  delivery to the purchaser and other  components  of  such  service,  the
    6  service of transporting, transmitting, or distributing such gas or elec-
    7  tricity  by  means  of  conduits, mains, pipes, wires, lines or the like
    8  (whether or not such service is provided by the seller  of  the  gas  or
    9  electricity being transported, transmitted or distributed and whether or
   10  not such service is provided by one or more persons), itself, or as part
   11  of  an  integrated  (bundled)  service including the commodity and other
   12  components of such service, and also including any other  components  of
   13  gas  or  gas  service,  or of electricity or electric service, which are
   14  currently provided or furnished with such service and  included  in  the
   15  rates or charges authorized by the New York state public service commis-
   16  sion  or  comparable  federal agency, but which may become unbundled and
   17  furnished separately (whether or not by the same seller of other  compo-
   18  nents of such gas, electricity or service), such as metering services or
   19  billing  or collection services or the services represented by capacity,
   20  demand or the like charges. In addition, gas and electric services shall
   21  include any ancillary services furnished in conjunction with gas or  gas
   22  service or electricity or electric service, which ancillary services are
   23  currently included in rates or charges or the like authorized by the New
   24  York  state  public  service commission or comparable federal agency but
   25  which may be separately charged for in the future.
   26    § 23. Paragraph 7 of subdivision (b) of section 1101 of the  tax  law,
   27  as  amended  by  chapter  61  of the laws of 1989, is amended to read as
   28  follows:
   29    (7) Use. The exercise of any right or  power  over  tangible  personal
   30  property or services, including gas or electric service, by the purchas-
   31  er  thereof  and includes, but is not limited to, the receiving, storage
   32  or any keeping or retention for any  length  of  time,  withdrawal  from
   33  storage,  any installation, any affixation to real or personal property,
   34  or any consumption of such property.   Without limiting  the  foregoing,
   35  use  also shall include the distribution of only tangible personal prop-
   36  erty, such as promotional materials.
   37    § 24. Subdivision (b) of section 1105 of the tax law,  as  amended  by
   38  chapter 166 of the laws of 1991, is amended to read as follows:
   39    (b)  The  receipts  from  every  sale, other than sales for resale, of
   40  [gas, electricity,] refrigeration and steam, and gas, electric,  refrig-
   41  eration and steam service of whatever nature, and from every sale, other
   42  than  sales  for  resale,  of telephony and telegraphy and telephone and
   43  telegraph service of whatever nature except interstate and international
   44  telephony and telegraphy and telephone and telegraph  service  and  from
   45  every  sale,  other  than  sales  for  resale,  of a telephone answering
   46  service.
   47    § 25. Subdivisions (b) and (d) of  section  1105-A  of  the  tax  law,
   48  subdivision (b) as amended by chapter 747 of the laws of 1979 and subdi-
   49  vision  (d)  as  added by chapter 70 of the laws of 1978, are amended to
   50  read as follows:
   51    (b) Notwithstanding any other provision of this article, but  not  for
   52  purposes  of the taxes imposed by section eleven hundred seven or eleven
   53  hundred eight or pursuant to the authority  of  article  twenty-nine  of
   54  this  chapter,  for purposes of [clause] clauses (A) and (G) of subdivi-
   55  sion (a) of section eleven hundred ten, the compensating use tax imposed
   56  by such section on the use of the property  and  services  described  in

       S. 6295                            27                            A. 9295

    1  [subsection]  subdivision  (a)  of  this section shall be at the rate of
    2  [three percent for the period commencing January first, nineteen hundred
    3  seventy-nine and ending December thirty-first, nineteen  hundred  seven-
    4  ty-nine; at the rate of two and one-half percent for the period commenc-
    5  ing  January first, nineteen hundred eighty and ending September thirti-
    6  eth, nineteen hundred eighty and at the rate of] zero  percent  [on  and
    7  after  October first, nineteen hundred eighty of the consideration given
    8  or contracted to be given for the  property  or  services  described  in
    9  subsection  (a) of this section or for use of such property or services,
   10  plus the cost of transportation except where  such  cost  is  separately
   11  stated  in the written contract, if any, and on the bill rendered to the
   12  purchaser].
   13    (d) Where a residence is a part of a multiple dwelling or other  prem-
   14  ises  consisting  of  residential  and non-residential units, or where a
   15  portion of a residence is used for non-dwelling purposes  including  the
   16  conduct  of  a  trade or business, the [tax commission] commissioner may
   17  establish such rules and regulations as may be  necessary  in  order  to
   18  allocate  to  such  residence  the  portion of the sale or use of energy
   19  sources or services attributable to the residential portion.
   20    § 26. Clause 3 of subdivision (b) of section 1107 of the tax  law,  as
   21  amended  by  chapter  376  of  the  laws  of 1989, is amended to read as
   22  follows:
   23    (3) Where a sale of tangible personal property or services,  including
   24  gas  or  electric service, including an agreement therefor, is made in a
   25  city in which the taxes imposed  by  subdivision  (a)  of  this  section
   26  apply,  but the property sold [or], the property upon which the services
   27  were performed or such service, including gas or electric service is  or
   28  will  be  delivered  to  the  purchaser elsewhere, such sale will not be
   29  subject to taxes imposed by such subdivision (a). However,  if  delivery
   30  occurs  or will occur in any city where the tax imposed by such subdivi-
   31  sion (a) applies, a vendor will be required to collect from the purchas-
   32  er the sales or compensating use taxes imposed by this section.  For the
   33  purposes of this section delivery shall be deemed to include transfer of
   34  possession to the purchaser and the receiving of the property or of  the
   35  service, including gas or electric service by the purchaser.
   36    §  27.  Paragraph 3 of subdivision (b) of section 1108 of the tax law,
   37  as added by chapter 168 of the laws of  1975,  is  amended  to  read  as
   38  follows:
   39    (3)  Where a sale of tangible personal property or services, including
   40  gas or electric service, including an agreement therefor, is made  in  a
   41  city  in  which  the  taxes  imposed  by subdivision (a) of this section
   42  apply, but the property sold [or], the property upon which the  services
   43  were  performed or such service, including gas or electric service is or
   44  will be delivered to the purchaser elsewhere,  such  sale  will  not  be
   45  subject  to  taxes imposed by such subdivision (a). However, if delivery
   46  occurs or will occur in any city where the tax imposed by such  subdivi-
   47  sion (a) applies, a vendor will be required to collect from the purchas-
   48  er[,]  the  sales or compensating use taxes imposed by this section. For
   49  the purposes of this section delivery shall be deemed to include  trans-
   50  fer  of possession to the purchaser and the receiving of the property or
   51  of the service, including gas or electric service by the purchaser.
   52    § 28. Subdivision (c) of section 1109 of the  tax  law,  as  added  by
   53  chapter 485 of the laws of 1981, is amended to read as follows:
   54    (c) Deliveries outside the district; deliveries within the district of
   55  property  sold  or serviced elsewhere. Where a sale of tangible personal
   56  property or services, including gas or electric  service,  including  an

       S. 6295                            28                            A. 9295

    1  agreement  therefor,  is made in the district in which the taxes imposed
    2  by this section apply, but the property sold  [or],  the  property  upon
    3  which  the  services  were  performed  or such service, including gas or
    4  electric  service  is  or  will be delivered to the purchaser elsewhere,
    5  such sale will not be subject to taxes imposed by this section. However,
    6  if delivery occurs or will occur in the district where the  tax  imposed
    7  by  this  section applies, a vendor will be required to collect from the
    8  purchaser the sales or compensating use taxes imposed by  this  section.
    9  For  the  purposes  of this section, delivery shall be deemed to include
   10  transfer of possession to the purchaser and the receiving of the proper-
   11  ty or of the service, including gas or electric service by the  purchas-
   12  er.  The  provisions  of section twelve hundred fourteen of this chapter
   13  shall be applicable to this section, but any reference in  that  section
   14  to a local sales or use tax imposed by a city, county or school district
   15  shall mean the additional taxes imposed by this section.
   16    §  29.  Subdivision  (a) of section 1110 of the tax law, as separately
   17  amended by sections 19, 158 and 161 of chapter 166 of the laws of  1991,
   18  is amended to read as follows:
   19    (a)  Except  to the extent that property or services have already been
   20  or will be subject to the sales tax under this article, there is  hereby
   21  imposed  on  every person a use tax for the use within this state on and
   22  after June first,  nineteen  hundred  seventy-one  except  as  otherwise
   23  exempted  under  this  article,  (A)  of  any tangible personal property
   24  purchased at retail, (B) of any tangible personal property  (other  than
   25  computer  software  used  by  the author or other creator) manufactured,
   26  processed or assembled by the user, (i) if items of  the  same  kind  of
   27  tangible  personal  property  are offered for sale by him in the regular
   28  course of business or (ii) if items are used  as  such  or  incorporated
   29  into a structure, building or real property by a contractor, subcontrac-
   30  tor or repairman in erecting structures or buildings, or building on, or
   31  otherwise  adding  to,  altering,  improving,  maintaining, servicing or
   32  repairing real property, property or land, as the terms  real  property,
   33  property  or  land are defined in the real property tax law, if items of
   34  the same kind are not offered for  sale  as  such  by  such  contractor,
   35  subcontractor  or repairman or other user in the regular course of busi-
   36  ness, (C) of any of the services described in paragraphs  (1),  (7)  and
   37  (8) of subdivision (c) of section eleven hundred five, (D) of any tangi-
   38  ble personal property, however acquired, where not acquired for purposes
   39  of  resale,  upon which any of the services described in paragraphs (2),
   40  (3) and (7) of subdivision (c) of section eleven hundred five have  been
   41  performed  [and],  (E)  of  any telephone answering service described in
   42  subdivision (b) of section eleven hundred five [and], (F) of any comput-
   43  er software written or otherwise created by the user if the user  offers
   44  software  of  a  similar kind for sale as such or as a component part of
   45  other property in the regular course of business and (G) of any  gas  or
   46  electric  service described in subdivision (b) of section eleven hundred
   47  five of this article.
   48    § 30. Section 1110 of the tax law is amended by adding a new  subdivi-
   49  sion (h) to read as follows:
   50    (h) For purposes of clause (G) of subdivision (a) of this section, the
   51  tax  shall  be at the rate of four percent of the consideration given or
   52  contracted to be given for the gas or electric service, or for  the  use
   53  of  such  service, including the consideration for any tangible personal
   54  property transferred in conjunction with the performance of the  service
   55  and also including any charges for shipping and delivery of the property
   56  so transferred, and also including any charge, whether or not separately

       S. 6295                            29                            A. 9295

    1  stated  and whether or not made by the vendor or other seller of the gas
    2  or electric service,  for  shipping,  delivery,  transportation,  trans-
    3  mission,  distribution  or  the like, and for any unbundled component of
    4  such  service,  as described in paragraph nineteen of subdivision (b) of
    5  section eleven hundred one of this article.
    6    § 31. Paragraph (ii) of subdivision (b) of section  1115  of  the  tax
    7  law,  as added by chapter 575 of the laws of 1965, is amended to read as
    8  follows:
    9    (ii) [Gas, electricity, refrigeration] Refrigeration  and  steam,  and
   10  gas,  electric,  refrigeration  and steam service of whatever nature for
   11  use or consumption directly and exclusively in research and  development
   12  in  the  experimental  or  laboratory sense shall be exempt from the tax
   13  imposed under subdivision (b) of section eleven  hundred  five  and  the
   14  compensating  use  tax  imposed under section eleven hundred ten of this
   15  article.  Such research and development shall not be deemed  to  include
   16  the  ordinary testing or inspection of materials or products for quality
   17  control,  efficiency  surveys,  management  studies,  consumer  surveys,
   18  advertising, promotions or research in connection with literary, histor-
   19  ical or similar projects.
   20    §  32.  Subdivision  (c)  of  section 1115 of the tax law, as added by
   21  chapter 93 of the laws of 1965, is amended to read as follows:
   22    (c) Fuel, [gas, electricity,] refrigeration and steam, and gas,  elec-
   23  tric,  refrigeration  and  steam  service  of whatever nature for use or
   24  consumption directly and  exclusively  in  the  production  of  tangible
   25  personal  property,  gas, electricity, refrigeration or steam, for sale,
   26  by manufacturing, processing, assembling, generating, refining,  mining,
   27  extracting, farming, agriculture, horticulture or floriculture, shall be
   28  exempt  from the taxes imposed under subdivisions (a) and (b) of section
   29  eleven hundred five and the compensating use tax imposed  under  section
   30  eleven hundred ten.
   31    §  33. Section 1115 of the tax law is amended by adding a new subdivi-
   32  sion (w) to read as follows:
   33    (w) Receipts from the sale of gas or electric  service  and  consider-
   34  ation  given  or  contracted  to be given for, or for the use of, gas or
   35  electric service purchased for use or consumption  directly  and  exclu-
   36  sively to operate a gas pipeline or gas distribution line or an electric
   37  transmission  or distribution line and to ensure necessary working pres-
   38  sure in an underground gas storage facility shall be exempt  from  sales
   39  and  compensating  use taxes imposed by this article. Such exempt gas or
   40  electric service shall include,  but  shall  not  be  limited  to,  such
   41  service  used  or consumed directly and exclusively to (1) ensure neces-
   42  sary working pressure in a gas pipeline used to transport,  transmit  or
   43  distribute gas service, (2) operate compressors used to transport, tran-
   44  smit  or distribute gas through such a gas pipeline or distribution line
   45  or used to ensure necessary working pressure in such a storage facility,
   46  (3) operate heaters to prevent gas in such a  pipeline  or  distribution
   47  line  from  freezing, (4) operate equipment which removes impurities and
   48  moisture from gas in such a pipeline or distribution line,  (5)  operate
   49  substations  and equipment related to electric transmission and distrib-
   50  ution lines such as transformers, capacitors, meters, switches, communi-
   51  cation devices and heating and cooling equipment,  and  (6)  ensure  the
   52  reliability  of electric service transmitted or distributed through such
   53  lines, for example, by operating reserve capacity machinery  and  equip-
   54  ment.
   55    § 34. The opening paragraph, subdivision 2 and paragraph (a) of subdi-
   56  vision  7  of  section  1118  of  the tax law, the opening paragraph and

       S. 6295                            30                            A. 9295

    1  subdivision 2 as added by chapter 93 of the laws of 1965  and  paragraph
    2  (a)  of subdivision 7 as amended by chapter 300 of the laws of 1967, are
    3  amended to read as follows:
    4    The  following  uses  of property and services shall not be subject to
    5  the compensating use tax imposed under this article:
    6    (2) In respect to the use of property or services,  including  gas  or
    7  electric  service,  purchased  by  the  user while a nonresident of this
    8  state, except in the case of  tangible  personal  property  or  services
    9  which the user, in the performance of a contract, incorporates into real
   10  property  located  in the state. A person while engaged in any manner in
   11  carrying on in this state any employment, trade, business or profession,
   12  shall not be deemed a nonresident with respect to the use in this  state
   13  of  property  or  services,  including  gas or electric service, in such
   14  employment, trade, business or profession.
   15    (a) In respect to the use of property or services,  including  gas  or
   16  electric  service,  to  the  extent  that  a retail sales or use tax was
   17  legally due and paid thereon, without any right to a  refund  or  credit
   18  thereof,  to  any other state or jurisdiction within any other state but
   19  only when it is shown that such other state  or  jurisdiction  allows  a
   20  corresponding  exemption  with  respect  to  the sale or use of tangible
   21  personal property or services, including gas or electric  service,  upon
   22  which  such  a sales tax or compensating use tax was paid to this state.
   23  To the extent that the tax imposed by this article is at a  higher  rate
   24  than  the  rate  of tax in the first taxing jurisdiction, this exemption
   25  shall be inapplicable and the tax imposed by section eleven hundred  ten
   26  of  this  chapter  shall  apply  to the extent of the difference in such
   27  rates, except as provided in paragraph (b) of this subdivision.
   28    § 35. Subdivision 4 of section 1131 of the  tax  law,  as  amended  by
   29  chapter 166 of the laws of 1991, is amended to read as follows:
   30    (4)  "Property  and services the use of which is subject to tax" shall
   31  include: (a) all property sold to a person within the state, whether  or
   32  not  the  sale  is  made  within the state, the use of which property is
   33  subject to tax under section eleven hundred ten or will  become  subject
   34  to tax when such property is received by or comes into the possession or
   35  control  of  such person within the state; (b) all information services,
   36  protective and detective services and  interior  decorating  and  design
   37  services  as  such  services are described in subdivision (c) of section
   38  eleven hundred five, rendered to a person within the state,  whether  or
   39  not  such  services are rendered from or at a location within the state;
   40  (c) all services rendered to a person within the state, whether  or  not
   41  such  services  are  performed  within the state, upon tangible personal
   42  property the use of which is subject to tax under section eleven hundred
   43  ten or will become subject to tax when such property is received  by  or
   44  comes  into  possession  or control of such person within the state; (d)
   45  all property sold by a person making sales described in  clause  (F)  of
   46  subparagraph (i) of paragraph eight of subdivision (b) of section eleven
   47  hundred one of this article to a person described in such clause (F) who
   48  purchases such property at retail, whether or not the sale is made with-
   49  in  the  state;  [and] (e) all telephone answering service rendered to a
   50  person within the state, whether or  not  such  services  are  performed
   51  within the state, the use of which is subject to tax under section elev-
   52  en  hundred  ten  or  will  become  subject  to tax when such service is
   53  received by or comes into possession or control of  such  person  within
   54  the state; and (f) all gas and electric services sold to a person within
   55  the  state, whether or not the sale is made within the state, the use of
   56  which services are subject to tax under section eleven  hundred  ten  of

       S. 6295                            31                            A. 9295

    1  this  article  or  will  become  subject  to  tax when such services are
    2  received by or come into the possession or control of such person within
    3  the state, and whether or not such services are rendered from  or  at  a
    4  location within the state.
    5    §  36.  Subparagraph  (i) of paragraph 3 of subdivision (a) of section
    6  1210 of the tax law, as amended by chapter 261 of the laws of  1988,  is
    7  amended to read as follows:
    8    (i) Notwithstanding any other provision of law to the contrary but not
    9  with  respect  to  cities  subject  to  the provisions of section eleven
   10  hundred seven or section eleven  hundred  eight,  any  city  or  county,
   11  except  a  county  wholly  contained within a city, may provide that the
   12  taxes imposed, pursuant to this subdivision, by such city or  county  on
   13  the  retail  sale  or  use  of  fuel  oil  and coal used for residential
   14  purposes, the retail sale or use of wood used  for  residential  heating
   15  purposes [and], the sale, other than for resale, of propane (except when
   16  sold  in containers of less than one hundred pounds), natural gas, elec-
   17  tricity, steam and gas, electric and steam services used for residential
   18  purposes and the use of gas or electric  service  used  for  residential
   19  purposes  may  be  imposed  at  a lower rate than the uniform local rate
   20  imposed pursuant to the opening paragraph of this section,  as  long  as
   21  such  rate is one of the rates authorized by such paragraph or such sale
   22  or use may be exempted from such taxes.  Provided, however,  such  lower
   23  rate  must apply to all such energy sources and services and at the same
   24  rate and no such exemption may be enacted unless such exemption  applies
   25  to all such energy sources and services.  The provisions of this subpar-
   26  agraph  shall  not apply to a sale or use of (i) diesel motor fuel which
   27  involves a delivery at a filling station or into a repository  which  is
   28  equipped  with  a  hose  or  other  apparatus  by which such fuel can be
   29  dispensed into the fuel tank of a motor vehicle and (ii) enhanced diesel
   30  motor fuel except in the case of a sale or use of such  enhanced  diesel
   31  motor  fuel used exclusively for residential purposes which is delivered
   32  into a storage tank which is not equipped with a hose or other apparatus
   33  by which such fuel can be dispensed into the fuel tank of a motor  vehi-
   34  cle  and  such storage tank is attached to the heating unit burning such
   35  fuel, provided that each delivery of such fuel  of  over  four  thousand
   36  five  hundred  gallons shall be evidenced by a certificate signed by the
   37  purchaser stating that the product will be used exclusively for residen-
   38  tial purposes.
   39    § 37. Paragraphs 1 and 2 and subparagraph (i) of paragraph 3 of subdi-
   40  vision (b) and subdivision (c) of section 1210 of the tax law, paragraph
   41  1 of subdivision (b) as amended by chapter 166  of  the  laws  of  1991,
   42  paragraph  2  and  subparagraph (i) of paragraph 3 of subdivision (b) as
   43  amended by chapter 746 of the laws of 1979 and subdivision (c) as  added
   44  by chapter 93 of the laws of 1965, are amended to read as follows:
   45    (1)  Or,  one or more of the taxes described in subdivisions (b), (d),
   46  (e) and (f) of section eleven hundred five, at the  same  uniform  rate,
   47  including  the  transitional  provisions  in  section eleven hundred six
   48  covering such taxes, but not the taxes described in subdivisions (a) and
   49  (c) of section eleven hundred five. Provided, further,  that  where  the
   50  tax  [on  telephone  answering  service] described in subdivision (b) of
   51  section eleven hundred five is imposed, the compensating use [tax] taxes
   52  described in [clause] clauses (E) and (G) of subdivision (a) of  section
   53  eleven hundred ten shall also be imposed.
   54    (2)  In  respect to the taxes described in such subdivisions (b), (d),
   55  (e) and (f) of section eleven hundred five and in such clauses  (E)  and
   56  (G)  of  subdivision  (a)  of section eleven hundred ten and the transi-

       S. 6295                            32                            A. 9295

    1  tional provisions in such section  eleven  hundred  six  covering  those
    2  taxes, all provisions of a local law imposing any such tax, except as to
    3  rate  and  except  as otherwise provided herein, shall be identical with
    4  the corresponding provisions in such article twenty-eight, including the
    5  definition  and  exemption  provisions  of  such  article, so far as the
    6  provisions of such article twenty-eight can be made  applicable  to  the
    7  taxes  imposed  by  such  city  or  county and with such limitations and
    8  special provisions as are set forth in this article; provided,  however,
    9  that  any local law enacted by any city of one million or more, imposing
   10  the taxes authorized by  this  subdivision,  shall  omit  the  exemption
   11  provided  in  subdivision  (c) of section eleven hundred fifteen and may
   12  omit the exception provided in  paragraph  (1)  of  subdivision  (f)  of
   13  section eleven hundred five for charges to a patron for admission to, or
   14  use of, facilities for sporting activities in which such patron is to be
   15  a  participant,  such  as bowling alleys and swimming pools. The transi-
   16  tional provisions contained in subdivision (d) of section eleven hundred
   17  six shall apply in the same manner and to  the  same  extent  to  a  tax
   18  imposed by omitting the exception in paragraph (1) of subdivision (f) of
   19  section  eleven  hundred  five,  as described in the preceding sentence,
   20  except that an equivalent date shall be substituted to accord  with  the
   21  date when the tax so imposed becomes effective. The tax described in any
   22  one of such subdivisions (b), (d), (e) and (f) of section eleven hundred
   23  five,  including  the  related  transitional  provisions in such section
   24  eleven hundred six, and the taxes described in clauses (E)  and  (G)  of
   25  subdivision (a) of section eleven hundred ten where the tax described in
   26  such  subdivision (b) of section eleven hundred five is imposed, may not
   27  be imposed by a city or county unless the local law, ordinance or resol-
   28  ution imposes such tax so as to include all portions and  all  types  of
   29  receipts,  charges  or  rents,  as the case may be, subject to state tax
   30  under the applicable subdivision of section eleven hundred five and uses
   31  subject to tax under the applicable provisions of section eleven hundred
   32  ten where the tax described in subdivision (b) of section eleven hundred
   33  five is imposed.
   34    (i) Notwithstanding any other provision of law to the contrary but not
   35  with respect to cities subject  to  the  provisions  of  section  eleven
   36  hundred  seven  or  section  eleven  hundred  eight, any city or county,
   37  except a county wholly contained within a city, may provide that the tax
   38  imposed, pursuant to this subdivision, by such city  or  county  on  the
   39  sale,  other than for resale, of propane (except when sold in containers
   40  of less than one hundred pounds), natural gas,  electricity,  steam  and
   41  gas,  electric  and  steam services used for residential purposes and on
   42  the use of gas and electric services used for residential  purposes  may
   43  be  imposed at a lower rate than the uniform local rate imposed pursuant
   44  to the opening paragraph of this section, as long as such rate is one of
   45  the rates authorized by such paragraph  or  such  sale  or  use  may  be
   46  exempted  from such taxes. Provided, however, such lower rate must apply
   47  to all such energy sources and services and at the same rate and no such
   48  exemption may be enacted unless such exemption applies to all such ener-
   49  gy sources and services.
   50    (c) Notwithstanding the prior provisions of this section, where a city
   51  has, pursuant to section  twelve  hundred  twenty-four,  pre-empted  the
   52  right to impose any of the taxes described in subdivisions (b), (d), (e)
   53  and  (f)  of section eleven hundred five by imposing one or more of such
   54  taxes, and, if the taxes described in such subdivision  (b)  of  section
   55  eleven hundred five are imposed, the compensating use taxes described in
   56  clauses (E) and (G) of subdivision (a) of section eleven hundred ten, as

       S. 6295                            33                            A. 9295

    1  provided  for  in  subdivision  (b) of this section, the county in which
    2  such city is located may  still  impose  those  taxes  authorized  under
    3  subdivision  (a)  or  (b)  of  this section not pre-empted by such city.
    4  Within  areas  in such county but outside of such city, the county shall
    5  continue to be authorized and empowered to impose the taxes  as  author-
    6  ized in subdivisions (a) and (b) of this section, without any diminution
    7  in the county's right to impose such taxes in areas outside such city.
    8    §  38.  Subdivision  (a) of section 1212 of the tax law, as amended by
    9  chapter 300 of the laws of 1968, is amended to read as follows:
   10    (a) Any school district which is coterminous with,  partly  within  or
   11  wholly  within a city having a population of less than one hundred twen-
   12  ty-five thousand, is hereby authorized and empowered, by  majority  vote
   13  of  the  whole  number  of  its school authorities, to impose for school
   14  district purposes, within the territorial limits of such school district
   15  and without discrimination between residents and  nonresidents  thereof,
   16  the  tax described in subdivision (b) of section eleven hundred five and
   17  the taxes described in clauses (E) and (G) of subdivision (a) of section
   18  eleven hundred ten, including the transitional provisions in subdivision
   19  (b) of section eleven hundred six, so far as such provisions can be made
   20  applicable to the [tax] taxes imposed by such school district  and  with
   21  such  limitations  and special provisions as are set forth in this arti-
   22  cle, such [tax] taxes to be imposed at the rate of  one-half,  one,  one
   23  and one-half, two, two and one-half or three percent which rate shall be
   24  uniform  for  all portions and all types of receipts and uses subject to
   25  such [tax] taxes.  In respect to such [tax] taxes, all provisions of the
   26  resolution imposing [it] them, except as to rate and except as otherwise
   27  provided herein, shall be identical with the corresponding provisions in
   28  such article  twenty-eight,  including  the  applicable  definition  and
   29  exemption  provisions  of such article, so far as the provisions of such
   30  article twenty-eight can be made applicable to the [tax]  taxes  imposed
   31  by such school district and with such limitations and special provisions
   32  as  are  set  forth in this article. The [tax] taxes described in [such]
   33  subdivision (b) of section eleven hundred five and clauses (E)  and  (G)
   34  of  subdivision (a) of section eleven hundred ten, including the transi-
   35  tional provision in subdivision (b) of such section eleven hundred  six,
   36  may not be imposed by such school district unless the resolution imposes
   37  [the  tax described in such subdivision] such taxes so as to include all
   38  portions and all types of receipts and uses subject to  tax  under  such
   39  subdivision and clauses.
   40    §  39.  Section  1213 of the tax law, as amended by chapter 575 of the
   41  laws of 1965, is amended to read as follows:
   42    § 1213. Deliveries outside the jurisdiction where sale is made.  Where
   43  a sale of tangible personal property or services, including  gas,  elec-
   44  tric  and  telephone  answering  services, but not including other [than
   45  those] services described in subdivision (b) of section  eleven  hundred
   46  five,  including  an  agreement therefor, is made in any city, county or
   47  school district, but the property sold [or], the property upon which the
   48  services were performed or the gas,  electric,  telephone  answering  or
   49  other  service  is or will be delivered to the purchaser elsewhere, such
   50  sale shall not be  subject  to  tax  by  such  city,  county  or  school
   51  district. However, if delivery occurs or will occur in a city, county or
   52  school  district  imposing  a tax on the sale or use of such property or
   53  such gas, electric, telephone answering or other  services,  the  vendor
   54  shall  be required to collect from the purchaser, as provided in section
   55  twelve hundred fifty-four, the aggregate sales or compensating use taxes
   56  imposed by the city, if any, county and school district in which  deliv-

       S. 6295                            34                            A. 9295

    1  ery occurs or will occur, for distribution by the [state tax commission]
    2  commissioner  to  such  taxing  jurisdiction  or  jurisdictions. For the
    3  purposes of this section delivery shall be deemed to include transfer of
    4  possession  to the purchaser and the receiving of the property or of the
    5  service, including gas, electric or telephone answering service, by  the
    6  purchaser.
    7    §  40. Section 1220 of the tax law, as added by chapter 93 of the laws
    8  of 1965, is amended to read as follows:
    9    § 1220. Territorial limitations. Any tax imposed under  the  authority
   10  of  this  article  shall apply only within the territorial limits of the
   11  city, county or school district imposing the tax, except that  where  [a
   12  tax]  the  taxes described in subdivision (b) [or (e)] of section eleven
   13  hundred five, and clauses (E) and (G)  of  subdivision  (a)  of  section
   14  eleven  hundred  ten  or the tax described in subdivision (e) of section
   15  eleven hundred five is imposed by a  city,  as  provided  in  [sections]
   16  section  twelve  hundred ten or twelve hundred eleven, any establishment
   17  located partially within such city and partially within a town or  towns
   18  and  receiving  or  using any services or utilities provided by the city
   19  shall be deemed to be wholly within such city for the purposes  of  such
   20  taxes.
   21    §  41.  Paragraph 1 of subdivision (b) of section 1224 of the tax law,
   22  as amended by chapter 426 of the laws of 1968, is  amended  to  read  as
   23  follows:
   24    (1)  any  or  all of the taxes described in subdivisions (b), (d), (e)
   25  and (f) of section eleven hundred five, and, where the tax described  in
   26  subdivision  (b)  of  section eleven hundred five is imposed, all of the
   27  taxes described in clauses (E) and (G) of  subdivision  (a)  of  section
   28  eleven  hundred  ten, as authorized by subdivision (b) of section twelve
   29  hundred ten.
   30    § 42. Paragraph 2 of subdivision (s) of section 1224 of the  tax  law,
   31  as  added  by  chapter  718  of  the laws of 1996, is amended to read as
   32  follows:
   33    (2) any or all of the taxes described in subdivisions  (b),  (d),  (e)
   34  and  (f)  of section eleven hundred five of this chapter, and, where the
   35  tax described in such subdivision (b) of section eleven hundred five  is
   36  imposed,  all  of the taxes described in clauses (E) and (G) of subdivi-
   37  sion (a) of section eleven hundred ten, as authorized by subdivision (b)
   38  of section twelve hundred ten of this article.
   39    § 43. Movable machinery and equipment other than boilers,  ventilating
   40  apparatus,  elevators,  plumbing, heating, lighting and power generating
   41  apparatus, shafting other than counter-shafting and  equipment  for  the
   42  distribution of heat, light, power, gases and liquids, which was subject
   43  to  taxation  on  a  final  assessment roll completed in 2000, and which
   44  would otherwise become wholly exempt from taxation by  virtue  of  para-
   45  graph  (f) of subdivision 12 of section 102 of the real property tax law
   46  due to either a change in ownership or the amendment to article 9 of the
   47  tax law effectuated by section four of this act, shall be taxable to the
   48  extent provided herein  for  purposes  of  the  final  assessment  rolls
   49  completed in 2001 through 2010, inclusive, notwithstanding any provision
   50  in  paragraph  (f) of subdivision 12 of section 102 of the real property
   51  tax law or in any other law to the contrary.
   52    (a) On the final assessment roll  completed  in  2001,  such  property
   53  shall be fully taxable.
   54    (b)  On the final assessment roll completed in 2002, 10 percent of the
   55  total assessed valuation of such property shall be exempt from taxation.

       S. 6295                            35                            A. 9295

    1    (c) On the final assessment roll completed in 2003, 20 percent of  the
    2  total assessed valuation of such property shall be exempt from taxation.
    3    (d)  On the final assessment roll completed in 2004, 30 percent of the
    4  total assessed valuation of such property shall be exempt from taxation.
    5    (e) On the final assessment roll completed in 2005, 40 percent of  the
    6  total assessed valuation of such property shall be exempt from taxation.
    7    (f)  On the final assessment roll completed in 2006, 50 percent of the
    8  total assessed valuation of such property shall be exempt from taxation.
    9    (g) On the final assessment roll completed in 2007, 60 percent of  the
   10  total assessed valuation of such property shall be exempt from taxation.
   11    (h)  On the final assessment roll completed in 2008, 70 percent of the
   12  total assessed valuation of such property shall be exempt from taxation.
   13    (i) On the final assessment roll completed in 2009, 80 percent of  the
   14  total assessed valuation of such property shall be exempt from taxation.
   15    (j)  On the final assessment roll completed in 2010, 90 percent of the
   16  total assessed valuation of such property shall be exempt from taxation.
   17    § 44. Tax Reduction credit under tax law, former section 189.    There
   18  shall be allowed a credit against the taxes imposed under former section
   19  189  of  the  tax  law  to account for the rate reduction under tax law,
   20  section 186-a for the period October 1, 1998 through December 31,  1999.
   21  The  appropriate credit shall commence for the taxable month which coin-
   22  cides with such October 1, 1998, rate reduction. The former section  189
   23  of  the  tax  law credit shall apply as if the rate of tax imposed under
   24  former section 189 of the tax law had been reduced by one-quarter of one
   25  percent on October 1, 1998 through December 31, 1999. The amount of  the
   26  credit shall first be offset against any liability owing by the taxpayer
   27  under  former section 189 or 189-a of the tax law.  Such offset shall be
   28  made by a public utility required to collect the  tax  imposed  by  such
   29  sections against any tax liability under such sections collected by such
   30  utility  from  its then current customers on and after the date this act
   31  shall have become a law.  Such utility shall provide information to each
   32  such taxpayer regarding the amount offset with respect to such  taxpayer
   33  and  the  amount of the excess credit, if any, due such taxpayer so that
   34  each such taxpayer can file a claim for refund with the commissioner  of
   35  taxation  and  finance  for any such excess credit.  Any electric corpo-
   36  ration which reimbursed a person pursuant to section  149-b  of  chapter
   37  166 of the laws of 1991 shall be considered the taxpayer with respect to
   38  the  amount  so  reimbursed  for  purposes of the credit allowed by this
   39  section. Any credit or excess credit allowed under this section shall be
   40  treated as an overpayment by a taxpayer for  purposes  of  administering
   41  such  credit  or  excess credit in accordance with article 27 of the tax
   42  law and other laws applicable to credits or excess credits allowed under
   43  article 9 of the tax law.
   44    § 45. Continued application of tax law former section 186.  (a)  Defi-
   45  nitions.  (i)  For  purposes  of this section, a "continuing section 186
   46  taxpayer" is a taxpayer which (A) is primarily engaged in  the  business
   47  of  co-generation  with respect to a taxable year ending on December 31,
   48  1999 (either directly or by reason of membership in a partnership  which
   49  is so engaged) determined without regard to the megawatt capacity of any
   50  of  its  facilities,  (B) was subject to tax under former section 186 of
   51  the tax law, but not under section 186-a of the tax law, with respect to
   52  a taxable year ending on December 31, 1999, and (C)  as  of  January  1,
   53  2000,  was  a party to a total output contract or contracts with respect
   54  to all electricity produced for sale by such taxpayer and  all  partner-
   55  ships of which it is a member. However, a taxpayer which otherwise qual-
   56  ifies  as  a  continuing  section  186  taxpayer may make an irrevocable

       S. 6295                            36                            A. 9295

    1  election not to be treated as a continuing section  186  taxpayer.  Such
    2  election shall be made at the time and in the form and manner prescribed
    3  by the commissioner of taxation and finance.
    4    (ii)  For  purposes  of  this  section, a "total output contract" is a
    5  contract, binding on its parties as of January 1, 2000,  which  provides
    6  for  the sale of all electricity produced for sale by the taxpayer or by
    7  a partnership of which the taxpayer is a member.  A  taxpayer  shall  be
    8  deemed  to be a party to such a contract if a partnership of which it is
    9  a member, and which produces electricity for sale, is a party to such  a
   10  contract.
   11    (iii)  For  purposes of this section, a "contract termination year" is
   12  the calendar year containing the  termination  date  of  the  taxpayer's
   13  total  output  contract  as it was in effect on January 1, 2000, without
   14  regard to any extensions thereof agreed to or  otherwise  created  after
   15  January  1, 2000. If the taxpayer is, on such date, a party to more than
   16  one such total output contract, the reference in the  previous  sentence
   17  to  its contract shall be deemed to refer to the last of its such exist-
   18  ing contracts to terminate.
   19    (iv) For purposes of this section, the  term  "partnership"  shall  be
   20  deemed  to include reference to a limited liability company treated as a
   21  partnership for federal income tax purposes.
   22    (b) Sections three,  eight,  nine,  ten,  twelve,  thirteen,  fifteen,
   23  sixteen,  eighteen, nineteen and subdivision (a) of section forty-six of
   24  this act notwithstanding, a taxpayer which is a continuing  section  186
   25  taxpayer  shall  be subject to the provisions of law amended or repealed
   26  by such sections of this act as they were  in  effect  on  December  31,
   27  1999, and shall remain subject thereto through and including December 31
   28  of  the  contract  termination  year.  References in sections eleven and
   29  twenty-one of this act to 1999 and 2000 shall be deemed, in the case  of
   30  a  continuing section 186 taxpayer, to refer to the contract termination
   31  year, and to the year immediately following, respectively.
   32    (c) Any provision of this act to the contrary notwithstanding, in  the
   33  case of a continuing section 186 taxpayer, in the application of section
   34  forty-three and subdivision (f) of section forty-six of this act, refer-
   35  ences  to  1999  shall be deemed to be references to the contract termi-
   36  nation year, and references in such sections to years subsequent to 1999
   37  shall be deemed increased by the number of years by which  the  contract
   38  termination year follows 1999.
   39    § 46. This act shall take effect immediately; provided that:
   40    (a)  Sections  one,  two, three, four, six and eight through twenty of
   41  this act shall apply to taxable years ending after January 1, 2000.
   42    (b) Section five of this act shall take effect January  1,  2005,  and
   43  shall  apply to taxable years beginning on or after such date, provided,
   44  however, that the amendment to subdivision 10 of section  186-a  of  the
   45  tax  law made by section five of this act shall not affect the reversion
   46  of such subdivision pursuant to section 9 of chapter 316 of the laws  of
   47  1997.
   48    (c) Section seven-a of this act shall take effect January 1, 2005, and
   49  shall apply to taxable months beginning on and after such date.
   50    (d)  Sections  twenty-two  through twenty-eight and thirty-one through
   51  forty-two of this act shall take effect April 1, 2000, and  shall  apply
   52  to property or services sold on or after such date although made under a
   53  prior contract. Where property or service is sold on a monthly, quarter-
   54  ly  or  other  term basis and the bills for such property or service are
   55  based on meter readings, the amount received on each bill for such prop-
   56  erty or service for a month or other term shall be a receipt subject  to

       S. 6295                            37                            A. 9295

    1  the  tax,  but  such  sections shall be applicable to all bills based on
    2  meters read on or after April 1, 2000, only where more than one-half  of
    3  the number of days included in the month or other period billed are days
    4  subsequent  to March 31, 2000, provided, however, any provisions of such
    5  sections relating to the compensating use tax imposed by  section  twen-
    6  ty-nine  of  this act shall take effect at the same time as such section
    7  takes effect.
    8    (e) Sections twenty-nine and thirty of  this  act  shall  take  effect
    9  April  1, 2000, and shall apply to property or services sold on or after
   10  such date although made under a  prior  contract.    Where  property  or
   11  service  is  sold  on  a  monthly, quarterly or other term basis and the
   12  bills for such property or service are  based  on  meter  readings,  the
   13  amount received on each bill for such property or service for a month or
   14  other  term  shall be a receipt or consideration subject to the tax, but
   15  such sections shall be applicable to all bills based on meters  read  on
   16  or  after  April 1, 2000, only where more than one-half of the number of
   17  days included in the month or other period billed are days subsequent to
   18  March 31, 2000.
   19    (f) Section forty-three of this act shall apply and be in  full  force
   20  and  effect  with  respect  to  final assessment rolls completed between
   21  January 1, 2000 and December 31, 2009, inclusive, and shall  expire  and
   22  be deemed repealed December 31, 2009.

   23                                   PART B

   24    Section  1.  The  ninth  undesignated paragraph of section 1005 of the
   25  public authorities law, as amended by chapter 316 of the laws  of  1997,
   26  and  paragraph  b  as  amended  by  chapter  386 of the laws of 1998, is
   27  amended to read as follows:
   28    a.   Notwithstanding any inconsistent provision  of  this  title,  the
   29  authority  shall make available all economic development power for allo-
   30  cation to or for businesses and whose allocation of such power is recom-
   31  mended by the New York state economic development power allocation board
   32  pursuant to section one hundred eighty-seven of the economic development
   33  law. "Economic development power" shall mean any power from the  Fitzpa-
   34  trick  nuclear  project  that is voluntarily relinquished by businesses,
   35  except that it shall not include any power  under  the  power  for  jobs
   36  program  and the upstate economic revitalization power program which may
   37  be voluntarily relinquished by businesses, small businesses and not-for-
   38  profit corporations.
   39    b.   Notwithstanding any inconsistent provision  of  this  title,  the
   40  authority  shall  make  available  all  power  under  the power for jobs
   41  program for allocation to or for businesses, small businesses  and  not-
   42  for-profit  corporations  and all power under the upstate economic revi-
   43  talization power program to or for businesses and small  businesses  and
   44  whose allocation of such power [is] are recommended by such board pursu-
   45  ant to [section] sections one hundred eighty-nine and one hundred eight-
   46  y-nine-a  of  the  economic development law.   Power under the power for
   47  jobs program shall mean four hundred fifty megawatts of power and  power
   48  under  the  upstate economic revitalization power program shall mean two
   49  hundred megawatts of power, consisting of  power  from  the  Fitzpatrick
   50  nuclear  project  and not less than two hundred twenty-five megawatts of
   51  power acquired through a competitive procurement process established  by
   52  the  economic  development  power allocation board, in consultation with
   53  the department of public service,  and  implemented  by  the  authority;
   54  provided,  however  that  the  power  available  through the competitive

       S. 6295                            38                            A. 9295

    1  procurement process would be  acquired  and  transmitted  to  the  local
    2  distributor  of  electric  service at a price not in excess of the price
    3  that power from the Fitzpatrick nuclear project would be transmitted  to
    4  such distributor.
    5    c.    If  the  authority  declines to make power available to or for a
    6  business whose allocation has been so recommended, the  authority  shall
    7  decline  within  the period specified by the board in its recommendation
    8  and shall issue in writing a statement of reasons for such denial.
    9    d.  The authority shall report quarterly to the New York state econom-
   10  ic development power allocation board on the anticipated availability of
   11  economic development  power  [and],  power  under  the  power  for  jobs
   12  program,  and  power  under  the  upstate  economic revitalization power
   13  program for the subsequent twelve-month period.
   14    e.   When the authority determines  that  economic  development  power
   15  [or],  power under the power for jobs program or power under the upstate
   16  economic revitalization power program is available, the authority  shall
   17  notify the New York state economic development power allocation board.
   18    f.  The authority shall provide for the sale of power generated at the
   19  Fitzpatrick nuclear project to its industrial,  business,  and  economic
   20  development  power  customers  at a uniform non-discriminatory rate. The
   21  authority shall provide for the  sale  of  power  from  the  Fitzpatrick
   22  nuclear  project and of power acquired through a competitive procurement
   23  process established by the New York  state  economic  development  power
   24  allocation  board  to  local  distributors of electric service for busi-
   25  nesses and not-for-profit corporations receiving  allocations  of  power
   26  under the power for jobs program and the upstate economic revitalization
   27  power  program  at a rate that shall combine the rate set for power from
   28  the Fitzpatrick nuclear project and the actual cost  of  power  obtained
   29  through  the  competitive procurement process, with no mark-up; provided
   30  however, that prior to the time when  power  is  available  through  the
   31  competitive bidding process, the authority shall provide power under the
   32  power  for  jobs  program at the rate set for power from the Fitzpatrick
   33  nuclear project.
   34    g.  The authority is authorized, as deemed feasible and  advisable  by
   35  the  trustees,  to  use revenues from the sale of power from the Fitzpa-
   36  trick nuclear project under the power for jobs program and  the  upstate
   37  economic  revitalization  power  program,  to  the  extent such revenues
   38  exceed revenues from the sale of such power in the calendar  year  prior
   39  to  the  effective  date  of  this  paragraph  [g],  to make a voluntary
   40  contribution no later than sixty days after the end of the state  fiscal
   41  year  into  the  state treasury to the credit of the general fund. Other
   42  power authority customers shall not incur any costs in  the  implementa-
   43  tion  of the power for jobs program and the upstate economic revitaliza-
   44  tion power program.
   45    § 2. Subdivision 14 of section 1005 of the public authorities law,  as
   46  amended  by  chapter  316  of  the  laws  of 1997, is amended to read as
   47  follows:
   48    14.  To provide to the governor, to the speaker of the  assembly,  and
   49  to  the  temporary  president of the senate, on or before April first of
   50  each year, an economic development report including projections for  the
   51  next  succeeding  twelve  months  of  the amount of economic development
   52  power [and], power under the power for jobs program, and power under the
   53  upstate economic revitalization  power  program  which  will  be  or  is
   54  expected  to  be  available  with a listing of the current recipients of
   55  economic development power and of power under the power for jobs program
   56  and under the upstate economic revitalization power program, and data on

       S. 6295                            39                            A. 9295

    1  the number and types of  jobs  resulting  from  allocation  of  economic
    2  development  power  and  of  power  under the power for jobs program and
    3  under the upstate economic revitalization power program.    Such  report
    4  shall  also  include  the  amount  of revenues collected and used in the
    5  previous calendar year pursuant to the eighth  unnumbered  paragraph  of
    6  this  section. Prior to the dates of expiration of the initial contracts
    7  executed pursuant to the power for jobs  program  and  pursuant  to  the
    8  upstate  economic  revitalization  power program, such report shall also
    9  include an evaluation with  regard  to  the  need  for  continuation  of
   10  economic  development programs, including the power for jobs program and
   11  the upstate economic revitalization power program.
   12    § 3. Subdivisions (b), (d) and (g) of  section  183  of  the  economic
   13  development  law,  as  amended  by  chapter 316 of the laws of 1997, are
   14  amended to read as follows:
   15    (b) To evaluate applications for allocations of  economic  development
   16  power  [and],  of  power  under the power for jobs program, and of power
   17  under the upstate economic revitalization  power  program  and  to  make
   18  recommendations with respect to such proposed allocations.
   19    (d) To provide advice and assistance when appropriate to applicants on
   20  state  economic  development  programs  and  services in addition to the
   21  economic development power [and], power under the power for jobs program
   22  [and], power under the upstate economic revitalization power program and
   23  industrial incentive awards specifically provided for in this section.
   24    (g) The board shall  solicit  applications  for  economic  development
   25  power  and  for  power  under  the power for jobs program, and for power
   26  under the  upstate  economic  revitalization  power  program  by  public
   27  notice.  Such  notice  shall be in the form of newspaper advertisements,
   28  press releases, and by such other means as the board finds  appropriate.
   29  Solicitations  of preliminary applications for power under the power for
   30  jobs program shall begin promptly after the effective date of the  chap-
   31  ter  of  the  laws  of  nineteen  hundred ninety-seven establishing such
   32  program.  Solicitations of preliminary applications for power under  the
   33  upstate economic revitalization power program shall begin promptly after
   34  the effective date of the chapter of the laws of two thousand establish-
   35  ing such program.
   36    §  4.  The  section  heading and subdivision (f) of section 187 of the
   37  economic development law, as amended by chapter 316 of the laws of 1997,
   38  are amended to read as follows:
   39    [Economic] Allocations of economic development power [and], power  for
   40  jobs [allocations] power, and upstate economic revitalization power.
   41    (f)  Upon  approval or denial of any application for economic develop-
   42  ment power [or], power under the power for jobs program, or power  under
   43  the upstate economic revitalization power program, the board shall issue
   44  in  writing  a statement of its findings and conclusions with respect to
   45  such application and the reasons for its approval or denial.
   46    § 5. The economic development law is amended by adding a  new  section
   47  189-a to read as follows:
   48    §  189-a.  Upstate  economic revitalization power program.   (a) Defi-
   49  nitions. For the purposes of this section,  the  following  terms  shall
   50  have the following meanings:
   51    1.  "Local  distributor  of  electric  service" shall mean an electric
   52  corporation as defined in subdivision thirteen of  section  two  of  the
   53  public service law that was a member of the New York power pool on Janu-
   54  ary first, nineteen hundred ninety-five, or its successor in interest.
   55    2.  "Small business" shall include a corporation, partnership, limited
   56  liability company,  sole  proprietorship  or  individual  that  normally

       S. 6295                            40                            A. 9295

    1  utilizes  a  minimum  peak  electric demand of four hundred kilowatts or
    2  less.
    3    3.  "Upstate applications" shall mean applications submitted by appli-
    4  cants, including businesses and small businesses, located  within  coun-
    5  ties  in the state, other than New York, Bronx, Kings, Queens, Richmond,
    6  Dutchess, Nassau, Orange, Putnam, Rockland, Suffolk and Westchester.
    7    (b) Source of power. Power under the upstate  economic  revitalization
    8  program shall be in addition to economic development power and power for
    9  jobs  power and shall mean two hundred megawatts of power, consisting of
   10  power from the Fitzpatrick nuclear project and  power  acquired  by  the
   11  power  authority  of  the  state  of  New  York  through the competitive
   12  procurement process established by the board;  provided,  however,  that
   13  power  available  through  the  competitive procurement process shall be
   14  acquired and transmitted to the local distributor of electric service at
   15  a price not in excess of the  price  that  power  from  the  Fitzpatrick
   16  nuclear project would be transmitted to such distributor.
   17    (c)  Criteria.  The  board may recommend an upstate application for an
   18  allocation of power under the upstate  economic  revitalization  program
   19  for a business or small business for the purpose of job retention and/or
   20  job  creation under criteria established in sections one hundred eighty-
   21  four and subdivision (d) of section  one  hundred  eighty-nine  of  this
   22  article.  In recommending an allocation under the upstate economic revi-
   23  talization  program,  the  board  shall consider whether the locality in
   24  which the business is or plans to locate has offered to provide economic
   25  incentives to the business to supplement the  incentive  provided  under
   26  such program.
   27    (d) Timing of allocations and classification into blocks. 1. The board
   28  shall  recommend  upstate  applications  for  allocations of two hundred
   29  megawatts of power  under  the  upstate  economic  revitalization  power
   30  program  and  the power authority of the state of New York shall approve
   31  such applications on or before December thirty-first, two thousand.
   32    2. For the purpose of determining the timing of the tax credits avail-
   33  able under paragraph (b) of subdivision  nine  of  section  one  hundred
   34  eighty-six-a  of  the tax law, the power delivered pursuant to all allo-
   35  cations of power during the two years of the program shall  be  assigned
   36  to particular blocks: block I shall consist of seventy-four megawatts of
   37  power;  block  II  shall  consist of one hundred forty-four megawatts of
   38  power; block III shall consist of one hundred  twenty-six  megawatts  of
   39  power; and block IV shall consist of fifty-six megawatts of power.  Each
   40  utility  delivering  power under the program shall be assigned a propor-
   41  tion of the total megawatts in each block. The power delivered  by  each
   42  utility  participating  in  the program shall be proportionately divided
   43  among each of the four blocks according to the ratio between the  amount
   44  of power delivered by such utility at the time of credit calculation and
   45  the  total  of all power delivered by all utilities under the program at
   46  such time.
   47    (e) Eligibility. The board shall recommend  upstate  applications  for
   48  allocations  of  power under the upstate economic revitalization program
   49  to or for businesses which normally  utilize  a  minimum  peak  electric
   50  demand  in  excess of four hundred kilowatts; provided, however, that up
   51  to fifty megawatts of power under this program may  be  recommended  for
   52  allocations  to small businesses. The board may require small businesses
   53  that normally utilize a minimum peak electric demand of  less  than  one
   54  hundred kilowatts to aggregate their electric demand for the purposes of
   55  applying to the board for an allocation of power.

       S. 6295                            41                            A. 9295

    1    (f)  Upstate  applications.  Upstate  applications  of power under the
    2  upstate economic revitalization program shall be in the form and contain
    3  such  information,  exhibits  and  supporting  data  as  the  board  may
    4  prescribe.  Each  member  of  the board shall be provided a copy of each
    5  upstate application submitted for such power. Subject to confidentiality
    6  requirements,  a copy of each upstate application shall be sent promptly
    7  to the governor, the speaker of the assembly, the minority leader of the
    8  assembly, the chairman of the assembly ways  and  means  committee,  the
    9  temporary  president  of  the senate, the minority leader of the senate,
   10  the chairman of the senate finance committee and to each member  of  the
   11  state legislature in whose district any portion of the facility owned or
   12  operated by the applicant is located. Any official entitled to receive a
   13  copy  of each upstate application shall also receive five days notice of
   14  the board's intent to evaluate and make a decision on  such  application
   15  and the date of the meeting at which such evaluation and decision making
   16  is scheduled to take place.
   17    (g) Terms of contracts. The board shall recommend allocations of power
   18  under  this program under contracts with an effective term not in excess
   19  of two years with such terms and conditions  as  it  deems  appropriate.
   20  Such  terms and conditions shall include reasonable provisions providing
   21  for the partial or complete withdrawal of the power under the program in
   22  the event that the recipient fails  to  maintain  mutually  agreed  upon
   23  levels of employment and power utilization.
   24    (h)  Contracts.  Recommendation  for  an allocation of power under the
   25  upstate economic revitalization program shall qualify an applicant  that
   26  submits  an upstate application to enter into a contract for purchase of
   27  power from the power authority of the state of New York pursuant to  the
   28  terms  and  conditions  of  the recommendation. Such contracts and allo-
   29  cations shall provide that the local  distributor  of  electric  service
   30  shall  purchase  the  power  and deliver it at the then-current delivery
   31  rate or service charge  for  economic  development  power  or,  if  none
   32  exists, at a delivery rate set by the appropriate jurisdictional regula-
   33  tory body.
   34    (i)  Delivery  of  power.  If  a local distributor of electric service
   35  declines to purchase power offered under the upstate economic  revitali-
   36  zation  program, it shall nonetheless deliver the power to the customers
   37  selected by the board at the current delivery rate for economic develop-
   38  ment power or, if none exists, at a delivery rate set by the appropriate
   39  jurisdictional regulatory body. Revenue losses relating to  such  trans-
   40  actions  shall  not  give  rise  to  the tax credits available under the
   41  program when a utility has declined to purchase power allocated for sale
   42  under such program.
   43    § 6. Subdivision 9 of section 186-a of the tax law, as added by  chap-
   44  ter 316 of the laws of 1997, is amended to read as follows:
   45    9.  (a)  Power for jobs credit. Notwithstanding any other provision of
   46  this chapter or any other law to the contrary, for taxable periods nine-
   47  teen hundred ninety-seven through and including two thousand three,  any
   48  utility which delivers power under the power for jobs program, as estab-
   49  lished  by  section  one hundred eighty-nine of the economic development
   50  law, shall be allowed a  credit,  subject  to  the  limitations  thereon
   51  contained in this [subdivision] paragraph, against the tax imposed under
   52  this section equal to net lost revenues from the delivery of power under
   53  such  power for jobs program. Net lost revenues means the "net receipts"
   54  less "net utility revenue" from such delivery of power.  For purposes of
   55  this subdivision, "net receipts" shall mean the amount that the  utility
   56  would have otherwise received from customers receiving power pursuant to

       S. 6295                            42                            A. 9295

    1  allocations  by the New York state economic development power allocation
    2  board in accordance with section one hundred eighty-nine of the economic
    3  development law, pursuant to its tariff supervised by the public service
    4  commission  for substantially comparable service otherwise applicable to
    5  such customers in the absence of such designation,  less  the  utility's
    6  annual  average  incremental  short-term  variable and capacity costs of
    7  providing such power in the absence of such purchase.  For the  purposes
    8  of  this  subdivision, "net utility revenue" shall mean the revenues the
    9  utility actually receives in accordance with such  section  one  hundred
   10  eighty-nine  from  such  customers  so  designated by the New York state
   11  economic development power allocation board, less the utility's cost  of
   12  such  power under such program. Provided, however, that any credit under
   13  this [section] paragraph shall be used only with  respect  to  the  same
   14  taxable  year during which such credit arose and shall not be capable of
   15  being  carried  forward  or  backward  to  any  other  taxable   period.
   16  Provided,  further,  no  credit  shall  be  allowed in the case of power
   17  furnished to a customer of a utility which was not a  customer  of  such
   18  utility  on  the  effective  date of this [subdivision] paragraph.   Nor
   19  shall any credit be allowed to any  utility  for  the  total  amount  of
   20  power,  expressed  in kilowatt hours, purchased by the customers of such
   21  utility under such program during the taxable period  that  exceeds  the
   22  prorated "baseline energy use" by all customers of that utility purchas-
   23  ing power under such program during the taxable period.  "Baseline ener-
   24  gy  use"  with respect to each customer shall mean the largest amount of
   25  kilowatt hours of energy used by such customer during any twelve consec-
   26  utive month period occurring during the preceding  thirty  months  imme-
   27  diately  preceding  the  New York state economic development power allo-
   28  cation board's recommendation of such customer's  application,  prorated
   29  to  reflect  the  length of time of the customer's participation in such
   30  program during the taxable period.  Provided further, however,  that  in
   31  accordance  with  subdivision  (k) of section one hundred eighty-nine of
   32  the economic development law no tax credit shall be  available  for  any
   33  revenue  losses  when a utility has declined to purchase power allocated
   34  for sale under such program. No electric corporation  shall  be  allowed
   35  the  tax  credit  authorized  by  this subdivision until it shall file a
   36  certificate from the department of public service for the period covered
   37  by the return verifying that the calculation of such tax credit complies
   38  with this subdivision and the department of public service has  approved
   39  such  certificate  and  forwarded a copy of such approved certificate to
   40  the commissioner or any amended certificate resulting from the need  for
   41  correction.    Provided, further, no credit shall be allowed under para-
   42  graph (b) of this subdivision without a certification setting forth  the
   43  particular  block  designation  (I,  II,  III, IV) assigned to the power
   44  delivered under the upstate economic revitalization program. The  credit
   45  allowed  by  this subdivision shall not be applicable in calculating any
   46  other tax imposed or authorized to be imposed by  this  chapter  or  any
   47  other law, and the amount of the tax surcharge imposed under section one
   48  hundred  eighty-six-c of this article shall be calculated and payable as
   49  if the credit provided for by this subdivision were not allowed.
   50    (b) Upstate economic revitalization power credit. (i)  Notwithstanding
   51  any  provision of this chapter or any other law to the contrary, for the
   52  taxable periods two thousand one through two thousand four  any  utility
   53  which  delivers  power  under  the upstate economic revitalization power
   54  program, blocks I, II, III and IV  (as  such  program  is  described  in
   55  section one hundred eighty-nine-a of the economic development law and as
   56  such  blocks  are described in subdivision (d) of such section) shall be

       S. 6295                            43                            A. 9295

    1  allowed a credit, subject to the limitations  contained  in  this  para-
    2  graph,  against the tax imposed by this section equal to one-half of the
    3  net lost revenues from the delivery of power under such upstate economic
    4  revitalization power allocation, blocks I, II, III and IV through Decem-
    5  ber thirty-first, two thousand two. The credit shall be taken in accord-
    6  ance with the following eligibility schedule: (A) for the taxable period
    7  two  thousand  one,  power  assigned to block I of such upstate economic
    8  revitalization power program shall be eligible for the credit;  (B)  for
    9  the  taxable period two thousand two, power assigned to block II of such
   10  upstate economic revitalization power program shall be eligible for  the
   11  credit;  (C)  for the period two thousand three, power assigned to block
   12  III of such upstate economic revitalization program  shall  be  eligible
   13  for  the  credit;  (D)  for  the taxable period two thousand four, power
   14  assigned to block IV  of  such  upstate  economic  revitalization  power
   15  program shall be eligible for the credit.
   16    (ii)  The  term  "net  lost  revenues" shall have the same meaning and
   17  shall be calculated in the same manner as that set  forth  in  paragraph
   18  (a) of this subdivision.
   19    (iii) Provided, however, that any credit under this paragraph shall be
   20  used  only  with  respect to the taxable year for which it is allowed in
   21  accordance with the foregoing schedule and shall not be capable of being
   22  carried forward or backward to any other taxable period. No  tax  credit
   23  shall be available for any revenue losses when a utility has declined to
   24  purchase power allocated for sale under such program.
   25    § 7. This act shall take effect immediately and shall remain in effect
   26  through  December 31, 2004, after such date this act shall expire and be
   27  deemed repealed; provided, however, notwithstanding the  expiration  set
   28  forth in section 9 of chapter 316 of the laws of 1997, the provisions of
   29  this  act relating to the assessment, payment, determination, and refund
   30  of the tax imposed under tax law, section 186-a of the tax law, and  the
   31  audit  and  refund  of  the upstate economic revitalization power credit
   32  against such tax, as added by this act, shall continue  in  effect  with
   33  respect  to  taxable  years  under  such section 186-a of the tax law to
   34  which such credit was applicable.

   35                                   PART C

   36    Section 1. The tax law is amended by adding a new section 16  to  read
   37  as follows:
   38    §  16.  QNTC credit for research activities in upstate high technology
   39  enterprise zones. (a) Allowance of credit. A taxpayer which is a  quali-
   40  fied  new  technology  company  (QNTC) and which is subject to tax under
   41  article nine-A or twenty-two of this chapter shall be allowed  a  credit
   42  against  such  tax, pursuant to the provisions referenced in subdivision
   43  (c) of this section. The credit shall be equal to twenty percent of  the
   44  taxpayer's  in-house research expenses paid or incurred during the taxa-
   45  ble year with respect to services performed  and  supplies  used  in  an
   46  upstate high technology enterprise zone.
   47    (b) Definitions. (1) The term "qualified new technology company" means
   48  a company: (A) which is primarily engaged during the taxable year in any
   49  of  the activities referenced in subparagraph one, two, three or four of
   50  paragraph (b) of subdivision one of section three thousand  one  hundred
   51  two-e  of  the public authorities law; (B) which during the taxable year
   52  has gross sales less than one hundred million  dollars;  and  (C)  which
   53  during the taxable year has a ratio of research and development funds to
   54  net sales which equals or exceeds six percent.

       S. 6295                            44                            A. 9295

    1    (2)  An  "upstate  high  technology  enterprise  zone"  means a county
    2  outside the metropolitan commuter transportation district designated  by
    3  the  commissioner  of economic development, pursuant to an evaluation of
    4  economic criteria, including, but not limited to, the  relative  employ-
    5  ment performance of the county when compared to the state.
    6    (3)  The  term  "in-house  research  expenses"  shall have the meaning
    7  ascribed thereto by section 41(b)(2)(A)(i)  and  (ii)  of  the  internal
    8  revenue  code  (relating  to  wages and supplies used in connection with
    9  research activities).
   10    (c) Cross-references. For application of the credit  provided  for  in
   11  this section, see the following provisions of this chapter:
   12    (1) Article 9-A: Section 210, subdivision (28),
   13    (2) Article 22: Section 606, subsections (i) and (v).
   14    § 2. Section 210 of the tax law is amended by adding a new subdivision
   15  28 to read as follows:
   16    28.  QNTC  credit  for  research activities in upstate high technology
   17  enterprise zones. (a) Allowance of credit. A taxpayer which is a  quali-
   18  fied  new  technology  company  (QNTC)  shall  be  allowed  a credit for
   19  research activities in upstate high technology enterprise zones,  to  be
   20  computed as provided in section sixteen of this chapter, against the tax
   21  imposed by this article.
   22    (b)  Application  of credit. The credit allowed under this subdivision
   23  for any taxable year shall not reduce the tax due for such year to  less
   24  than  the  higher of the amounts prescribed in paragraphs (c) and (d) of
   25  subdivision one of this section.   However,  if  the  amount  of  credit
   26  allowed  under  this subdivision for any taxable year reduces the tax to
   27  such amount, any amount of credit thus not deductible  in  such  taxable
   28  year  shall  be  treated  as  an  overpayment  of  tax to be credited or
   29  refunded in accordance with the provisions of section ten hundred eight-
   30  y-six of this chapter. Provided, however, the provisions  of  subsection
   31  (c) of section ten hundred eighty-eight of this chapter notwithstanding,
   32  no interest shall be paid thereon.
   33    §  3.  Paragraph 1 of subsection (i) of section 606 of the tax law, as
   34  amended by section 2 of part J of chapter 407 of the laws  of  1999,  is
   35  amended to read as follows:
   36    (1)  For purposes of determining the application under this section of
   37  the credit provisions enumerated in the following table,  a  shareholder
   38  of a New York S corporation:
   39    (A)  shall  be  treated as the taxpayer with respect to his or her pro
   40  rata share of the corresponding credit base of such corporation,  deter-
   41  mined  for  the  corporation's  taxable  year  ending with or within the
   42  shareholder's taxable year and
   43    (B) shall be treated as the owner of a new business  with  respect  to
   44  such  share  if  the corporation qualifies as a new business pursuant to
   45  paragraph (j) of subdivision twelve of section two hundred ten  of  this
   46  chapter,  unless  the  shareholder  has  previously received a refund by
   47  reason of the application of this subparagraph, or this subsection as it
   48  was in effect for taxable years beginning before nineteen hundred  nine-
   49  ty-four.

   50  With respect to the                     The corporation's
   51  following credit                        credit base under
   52  under this section:                     section two hundred ten
   53                                          or section fourteen
   54                                          hundred fifty-six of this
   55                                          chapter is:

       S. 6295                            45                            A. 9295

    1  Investment tax credit                   Investment credit base
    2  under subsection (a)                    or qualified
    3                                          rehabilitation
    4                                          expenditures under
    5                                          subdivision twelve of
    6                                          section two hundred ten

    7  Economic development                    Cost or other basis
    8  zone investment tax credit              under subdivision
    9  under subsection (j)                    twelve-B
   10                                          of section two hundred
   11                                          ten

   12  Economic development                    Eligible wages under
   13  zone wage tax credit                    subdivision nineteen of
   14  under subsection (k)                    section two hundred ten
   15                                          or subsection (e) of
   16                                          section fourteen hundred
   17                                          fifty-six

   18  Economic development zone               Qualified investments
   19  capital tax credit                      and contributions under
   20  under subsection (1)                    subdivision twenty of
   21                                          section two hundred ten
   22                                          or subsection (d) of
   23                                          section fourteen hundred
   24                                          fifty-six

   25  Agricultural property tax               Allowable school
   26  credit under subsection (n)             district property taxes under
   27                                          subdivision twenty-two of
   28                                          section two hundred ten

   29  Credit for employment                   Qualified first-year wages or
   30  of persons with dis-                    qualified second-year wages
   31  abilities under                         under subdivision
   32  subsection (o)                          twenty-three of section
   33                                          two hundred ten
   34                                          or subsection (f)
   35                                          of section fourteen
   36                                          hundred fifty-six

   37  Employment incentive                    Applicable investment credit
   38  credit under subsec-                    base under subdivision
   39  tion (a-1)                              twelve-D

   40  Economic develop-                       Applicable investment
   41  ment zone employment                    credit under sub-
   42  incentive credit under                  division twelve-C
   43  subsection (j-1)

   44  Alternative fuels credit                Cost under subdivision
   45  under subsection (p)                    twenty-four

   46  Qualified emerging                      Applicable credit base
   47  technology company                      under subdivision twelve-E

       S. 6295                            46                            A. 9295

    1  employment credit                       of section two hundred ten
    2  under subsection (q)

    3  Qualified emerging                      Qualified investments under
    4  technology                              subdivision twelve-F of
    5  capital tax credit                      section two hundred ten
    6  under subsection (r)

    7  Credit for purchase of an               Cost of an automated
    8  automated external defibrillator        external defibrillator under
    9  under subsection (s)                    subdivision twenty-five of
   10                                          section two hundred ten
   11                                          or subsection (j) of section
   12                                          fourteen hundred fifty-six

   13  QNTC credit for research                Amount of credit under
   14  activities in upstate high              subdivision twenty-eight of
   15  technology enterprise zones             section two hundred ten
   16  under subsection (v)
   17    §  4. Section 606 of the tax law is amended by adding a new subsection
   18  (v) to read as follows:
   19    (v) QNTC credit for research activities  in  upstate  high  technology
   20  enterprise  zones. (1) Allowance of credit. A taxpayer which is a quali-
   21  fied new technology  company  (QNTC)  shall  be  allowed  a  credit  for
   22  research  activities  in upstate high technology enterprise zones, to be
   23  computed as provided in section sixteen of this chapter, against the tax
   24  imposed by this article.
   25    (2) Application of credit. If the amount of the credit  allowed  under
   26  this subsection for any taxable year shall exceed the taxpayer's tax for
   27  such  year,  the  excess shall be treated as an overpayment of tax to be
   28  credited or refunded in accordance with the provisions  of  section  six
   29  hundred  eighty-six of this article, provided, however, that no interest
   30  shall be paid thereon.
   31    § 5. This act shall take effect immediately and shall apply to taxable
   32  years beginning on or after January 1, 2002 and before January 1, 2012.

   33                                   PART D

   34    Section 1. Subdivision 12-E of section 210 of the tax law, as added by
   35  section 32 of part A of chapter 56 of the laws of 1998,  is  amended  to
   36  read as follows:
   37    12-E.  [Qualified  emerging  technology] Technology company employment
   38  [credit] credits.  (a) General. A taxpayer which is a qualified emerging
   39  technology company or a qualified new technology company and which meets
   40  the employment test specified in paragraph (c) of this subdivision shall
   41  be allowed a credit, to be computed as hereinafter provided, against the
   42  tax imposed by this article[, provided: (1) the taxpayer is a].
   43    (b) Definitions. (1) The term "qualified emerging technology  company"
   44  (QETC)  shall  have  the  meaning  ascribed  thereto by [pursuant to the
   45  provisions of] section thirty-one hundred two-e of the  public  authori-
   46  ties law[; and].
   47    (2)  The  terms "qualified new technology company" (QNTC) and "upstate
   48  high technology enterprise zone" (zone) shall have the meanings ascribed
   49  thereto in section sixteen of this chapter.
   50    (3) The term "small QNTC" shall mean a QNTC which during  the  taxable
   51  year has gross sales of less than ten million dollars.

       S. 6295                            47                            A. 9295

    1    (4)  The  term "large QNTC" shall mean a QNTC which during the taxable
    2  year has gross sales of at least ten  million  but  not  more  than  one
    3  hundred million dollars.
    4    (c)  Employment test. (1) In the case of a QETC, the average number of
    5  individuals employed full time by the taxpayer in New York state  during
    6  the  taxable  year is at least one hundred one percent of the taxpayer's
    7  base [year] period employment.
    8    (2) In the case of a small QNTC, (A) the average number of individuals
    9  employed full-time by the taxpayer in upstate high technology enterprise
   10  zones during the taxable year is greater than such number determined for
   11  the base period,
   12    (B) the increase described in clause (A) of this subparagraph is equal
   13  to or greater than one percent of the taxpayer's base period employment,
   14  and
   15    (C) the average number of individuals employed full-time in the  state
   16  during  the taxable year exceeds the base period employment by an amount
   17  which equals or exceeds the increase described in  clause  (A)  of  this
   18  subparagraph.
   19    (3) In the case of a large QNTC, (A) the average number of individuals
   20  employed full-time by the taxpayer in upstate high technology enterprise
   21  zones during the taxable year is greater than such number determined for
   22  the base period,
   23    (B) the increase described in clause (A) of this subparagraph is equal
   24  to or greater than ten percent of the taxpayer's base period employment,
   25  and
   26    (C)  the average number of individuals employed full-time in the state
   27  during the taxable year exceeds the base period employment by an  amount
   28  which  equals  or  exceeds  the increase described in clause (A) of this
   29  subparagraph.
   30    (d) Base period; base period employment. For [the]  purposes  of  this
   31  subdivision,  (1)  the  term "base period" means the three taxable years
   32  immediately preceding the first taxable year  in  which  the  credit  is
   33  claimed, and
   34    (2)  the term "base [year] period employment" means the average number
   35  of individuals employed full-time by the taxpayer in  the  state  during
   36  the [three taxable years immediately preceding the first taxable year in
   37  which the credit is claimed] base period.
   38    (3)  short  years.  Where  the  taxpayer provided full-time employment
   39  within the state (in the case of a QETC), or within any  zones  (in  the
   40  case  of  a QNTC), during only a portion of such three-year period, then
   41  [the first effective date for the company  to  take  advantage  of  this
   42  credit shall be the next year following the first full taxable year that
   43  the  company  had  full-time  employment in New York state. For the] for
   44  purposes of this [paragraph] subdivision the term "three years" shall be
   45  deemed to refer instead to [the prior year's full-time employment  after
   46  the first year and the average of the first eight quarters of employment
   47  after  the  first  two  taxable  years  in New York state] such portion,
   48  provided, however, the first taxable year for which the  credit  may  be
   49  taken  with  respect  to  such  company  shall  be the taxable year next
   50  following the first full taxable year  during  which  such  company  had
   51  full-time employment in New York state (in the case of a QETC) or in any
   52  zone (in the case of a QNTC).
   53    [(b)] (e) Allowance of credit. The credit under this subdivision shall
   54  be allowed only in the first taxable year in which the credit is claimed
   55  and  in each of the next two taxable years, provided that the conditions
   56  of paragraph (a) of this subdivision are satisfied in each taxable year.

       S. 6295                            48                            A. 9295

    1    [(c)] (f) Employee counts. For the purposes of this subdivision, aver-
    2  age number of individuals employed full-time shall be computed by adding
    3  the number of such individuals employed by the taxpayer at  the  end  of
    4  each  quarter  during  each  taxable year or other applicable period and
    5  dividing  the  sum  so obtained by the number of such quarters occurring
    6  within such taxable year or other applicable period;  provided  however,
    7  except  that  in computing base [year] period employment, there shall be
    8  excluded therefrom any employee with respect to whom a  credit  provided
    9  for  under subdivision nineteen of this section is claimed for the taxa-
   10  ble year.
   11    [(d) The] (g) Amount of credit. (1) In the case of a QETC, the  amount
   12  of  the  credit  shall equal the product of one thousand dollars [times]
   13  and the number of individuals employed full-time by the taxpayer in  the
   14  taxable  year  [that are] which is in excess of [one hundred percent of]
   15  the taxpayer's base [year] period employment.
   16    (2) In the case of a QNTC, the amount of the credit  shall  equal  the
   17  product  of  two thousand dollars and the number of individuals employed
   18  full-time by the taxpayer  within  upstate  high  technology  enterprise
   19  zones  during  the  taxable  year  which  is in excess of the taxpayer's
   20  employment within any such zones during the taxpayer's base period.
   21    [(e) The] (h) Application of credit. (1) QETC.  In the case of a QETC,
   22  the credit herein provided for and any carryover of  such  credit  shall
   23  not  be  allowed  in an amount which will reduce the tax payable to less
   24  than the higher of the amounts prescribed in paragraphs (c) and  (d)  of
   25  subdivision  one  of this section. Provided, however, that if the amount
   26  of credit allowable under this subdivision for any taxable year  reduces
   27  the  tax  to  such  amount,  any amount of credit not deductible in such
   28  taxable year may be carried over to the following year or years and  may
   29  be  deducted  from the taxpayer's tax for such year or years. In lieu of
   30  such carryover, [any such taxpayer] a QETC which: [(1)] (A) qualifies as
   31  a new business under [subparagraphs one and two  of]  paragraph  (j)  of
   32  subdivision  twelve of this section without regard to subparagraph three
   33  of such paragraph (j); and [(2)] (B) has not been subject to  tax  under
   34  this  article  for  more than six taxable years (excluding short taxable
   35  years) prior to the taxable year during which the taxpayer first becomes
   36  eligible for the credit herein provided for,  or  for  more  than  eight
   37  taxable  years  if  such taxpayer's primary business or product requires
   38  federal regulatory approval  or  involves  the  discovery  and  sale  of
   39  substances  requiring clinical trials as part of the federal drug admin-
   40  istration's required approval process for the use of such substances  by
   41  humans;  may  elect,  on its report for its taxable year with respect to
   42  which such credit is allowed, to treat the amount of such  carryover  as
   43  an  overpayment of tax to be credited or refunded in accordance with the
   44  provisions of section one thousand eighty-six of this chapter. Provided,
   45  however, the provisions of subsection (c) of section one thousand eight-
   46  y-eight of this chapter notwithstanding, no interest shall be paid ther-
   47  eon.
   48    (2) QNTC. In the case of a QNTC, the credit allowed under this  subdi-
   49  vision  for  any taxable year shall not reduce the tax due for such year
   50  to less than the higher of the amounts prescribed in paragraphs (c)  and
   51  (d) of subdivision one of this section. However, if the amount of credit
   52  allowed  under  this subdivision for any taxable year reduces the tax to
   53  such amount, any amount of credit thus not deductible  in  such  taxable
   54  year  shall  be  treated  as  an  overpayment  of  tax to be credited or
   55  refunded in accordance with  the  provisions  of  section  one  thousand
   56  eighty-six  of  this  chapter.  Provided,  however,  the  provisions  of

       S. 6295                            49                            A. 9295

    1  subsection (c) of section one  thousand  eighty-eight  of  this  chapter
    2  notwithstanding, no interest shall be paid thereon.
    3    §  2.  Subdivision  12-F  of  section  210 of the tax law, as added by
    4  section 32 of part A of chapter 56 of the laws of 1998,  is  amended  to
    5  read as follows:
    6    12-F.  [Qualified  emerging technology] Technology company capital tax
    7  [credit] credits.  (a) Allowance of credit. A taxpayer shall be  allowed
    8  a  credit  against  the  tax imposed by this article for investment in a
    9  qualified emerging technology company (QETC) or a small qualified emerg-
   10  ing technology company (QNTC).  The amount of the credit shall be  equal
   11  to  [one  of the following percentages, per] the allowable percentage of
   12  each qualified investment made during the taxable year in  a  [qualified
   13  emerging  technology  company  as  defined in section thirty-one hundred
   14  two-e of the public authorities law, made during the taxable  year,  and
   15  certified by the commissioner, either:
   16    (1)]  QETC,  or  a  small QNTC which has a location in an upstate high
   17  technology enterprise  zone,  provided,  however,  no  credit  shall  be
   18  allowed  under  this  subdivision  with respect to such a company unless
   19  such company is certified by the commissioner as a QETC, or as  a  small
   20  QNTC which has a location in an upstate high technology enterprise zone.
   21    (b)  Definitions. (1) The term "qualified emerging technology company"
   22  shall have the meaning ascribed thereto in  section  thirty-one  hundred
   23  two-e of the public authorities law.
   24    (2)  The  term  "qualified  new  technology company" and "upstate high
   25  technology enterprise zone" shall have the meaning ascribed  thereto  in
   26  section sixteen of this chapter.
   27    (3)  The  term "small QNTC" shall have the meaning ascribed thereto in
   28  subdivision twelve-E of this section.
   29    (4) The term "allowable percentage" means: (A) in the case of  invest-
   30  ment  in  a QETC, (i) ten percent of qualified investments [in qualified
   31  emerging technology companies, except for  investments  made  by  or  on
   32  behalf  of  an  owner  of the business, including, but not limited to, a
   33  stockholder, partner or sole  proprietor,  or  any  related  person,  as
   34  defined  in  subparagraph  (C)  of  paragraph three of subsection (b) of
   35  section four hundred  sixty-five  of  the  internal  revenue  code,  and
   36  provided,  however,  that] if the taxpayer certifies to the commissioner
   37  that the qualified investment will not be sold, transferred, traded,  or
   38  disposed of during the four years following the year in which the credit
   39  is first claimed; or
   40    [(2)]  (ii)  twenty  percent  of  qualified  investments [in qualified
   41  emerging technology companies, except for  investments  made  by  or  on
   42  behalf  of  an  owner  of the business, including, but not limited to, a
   43  stockholder, partner or sole  proprietor,  or  any  related  person,  as
   44  defined  in  subparagraph  (C)  of  paragraph three of subsection (b) of
   45  section four hundred  sixty-five  of  the  internal  revenue  code,  and
   46  provided,  however,  that] if the taxpayer certifies to the commissioner
   47  that the qualified investment will not be sold, transferred, traded,  or
   48  disposed of during the nine years following the year in which the credit
   49  is first claimed.
   50    (B)  in  the case of investment in a small ONTC, (i) twenty percent of
   51  qualified investments if the taxpayer certifies to the commissioner that
   52  the qualified investment will  not  be  sold,  transferred,  traded,  or
   53  disposed of during the four years following the year in which the credit
   54  is first claimed; or
   55    (ii)  forty percent of qualified investments if the taxpayer certifies
   56  to the commissioner that the qualified  investment  will  not  be  sold,

       S. 6295                            50                            A. 9295

    1  transferred,  traded, or disposed of during the nine years following the
    2  year in which the credit is first claimed.
    3    (5)  "Qualified  investment"  means  the contribution of property to a
    4  corporation in exchange for original issue capital stock or other owner-
    5  ship interest, the contribution of property to a partnership in exchange
    6  for an interest in the partnership, and  similar  contributions  in  the
    7  case  of  a  business  entity  not  in  corporate or partnership form in
    8  exchange for an ownership interest in such entity.  Provided, however, a
    9  qualified investment shall not include  an  investment  made  by  or  on
   10  behalf  of  an  owner  of the business, including, but not limited to, a
   11  stockholder, partner or sole  proprietor,  or  any  related  person,  as
   12  defined  in  subparagraph  (C)  of  paragraph three of subsection (b) of
   13  section four hundred sixty-five of the internal revenue code.
   14    (c) Aggregate credit limitation. The total amount of credit  allowable
   15  to a taxpayer under this [provision] subdivision for all years, taken in
   16  the aggregate, shall not exceed:
   17    (1)  in  the  case  of qualified investments in QETCs, (A) one hundred
   18  fifty thousand dollars in the case  of  investments  [made  pursuant  to
   19  subparagraph  one  of  this  paragraph  and  shall not exceed] where the
   20  allowable percentage is ten percent, and
   21    (B) three hundred thousand dollars in the case  of  investments  [made
   22  pursuant to subparagraph two of this paragraph.
   23    (b)  In  no event shall the credit and] where the allowable percentage
   24  is twenty percent, and
   25    (2) in the case of qualified investments in  small  QNTCs,  (A)  three
   26  hundred  thousand dollars in the case of investments where the allowable
   27  percentage is twenty percent, and
   28    (B) six hundred thousand dollars in the case of investments where  the
   29  allowable percentage is forty percent.
   30    (d)  Application  of  credit.  (1) QETC. In the case of investments in
   31  QETCs, the credit herein provided for and any carryover of  such  credit
   32  shall  not  be  allowed [under this subdivision for any taxable year, in
   33  the aggregate,] in an amount which will reduce the  tax  [due  for  such
   34  year] payable to less than the higher of the amounts prescribed in para-
   35  graphs  (c) and (d) of subdivision one of this section.  However, if the
   36  amount of credit or carryovers of such credit, or  both,  allowed  under
   37  this subdivision for any taxable year reduces the tax to such amount, or
   38  if  any  part  of  the  credit  or  carryovers of such credit may not be
   39  deducted from the tax otherwise due by reason of the final  sentence  of
   40  this  paragraph,  any amount of credit or carryovers of such credit thus
   41  not deductible in such taxable year may be carried over to the following
   42  year or years and may be deducted from the tax for such year  or  years.
   43  In addition, the amount of such credit, and carryovers of such credit to
   44  the  taxable  year,  deducted from the tax otherwise due may not, in the
   45  aggregate, exceed fifty percent of the tax  imposed  under  section  two
   46  hundred  nine  of  this  article  computed  without regard to any credit
   47  provided for by this section.
   48    [(c)] (2) QNTC. In the case of investments in small QNTCs, the  credit
   49  herein  provided  for  and  any  carryover  of  such credit shall not be
   50  allowed in an amount which will reduce the tax payable to less than  the
   51  higher  of  the amounts prescribed in paragraphs (c) and (d) of subdivi-
   52  sion one of this section. However, if the amount of credit allowed under
   53  this subdivision for any taxable year reduces the tax  to  such  amount,
   54  any  amount  of credit thus not deductible in such taxable year shall be
   55  treated as an overpayment of tax to be credited or refunded  in  accord-
   56  ance  with  the  provisions  of  section one thousand eighty-six of this

       S. 6295                            51                            A. 9295

    1  chapter. Provided, however, the provisions of subsection (c) of  section
    2  one  thousand  eighty-eight of this chapter notwithstanding, no interest
    3  shall be paid thereon.
    4    (e)  Credit recapture. (1) Where a taxpayer sells, transfers or other-
    5  wise disposes of corporate stock, a partnership interest or other owner-
    6  ship interest arising from the making of a  qualified  investment  which
    7  was  the basis, in whole or in part, for the allowance under this subdi-
    8  vision of [the credit provided for under subparagraph one  of  paragraph
    9  (a)  of  this  subdivision]  a  ten percent credit in the case of a QETC
   10  investment or a twenty percent credit in the case of a QNTC  investment,
   11  or  where  an  investment  which was the basis for such allowance is, in
   12  whole or in part, recovered by such taxpayer, and  such  disposition  or
   13  recovery  occurs  during  the  taxable year or within forty-eight months
   14  from the close of the taxable year with respect to which such credit  is
   15  allowed,  the  taxpayer shall add back, with respect to the taxable year
   16  in which the disposition  or  recovery  described  above  occurred,  the
   17  required portion of the credit originally allowed.
   18    (2)  Where a taxpayer sells, transfers or otherwise disposes of corpo-
   19  rate stock, a partnership interest or other ownership  interest  arising
   20  from  the making of a qualified investment which was the basis, in whole
   21  or in part, for the allowance under  this  subdivision  of  [the  credit
   22  provided  for  under  subparagraph two of paragraph (a) of this subdivi-
   23  sion] a twenty percent credit in the case of a QETC or a  forty  percent
   24  credit in the case of a QNTC, or where an investment which was the basis
   25  for  such  allowance is in any manner, in whole or in part, recovered by
   26  such taxpayer, and such disposition or recovery occurs during the  taxa-
   27  ble  year or within one hundred eight months from the close of the taxa-
   28  ble year with respect to which such  credit  is  allowed,  the  taxpayer
   29  shall  add  back, with respect to the taxable year in which the disposi-
   30  tion or recovery described [in subparagraph one of this paragraph] above
   31  occurred, the required portion of the credit originally allowed.
   32    (3) The required portion of the credit originally allowed shall be the
   33  product of (A) the portion of such credit attributable to  the  property
   34  disposed of and (B) the applicable percentage.
   35    (4) The applicable percentage shall be:
   36    (A) [for credits allowed pursuant to subparagraph one of paragraph (a)
   37  of this subdivision] in the case of a ten percent credit on QETC invest-
   38  ment or a twenty percent credit on a QNTC investment:
   39    (i)  one hundred percent, if the disposition or recovery occurs within
   40  the taxable year with respect to which the credit is allowed  or  within
   41  twelve months of the end of such taxable year,
   42    (ii)  seventy-five percent, if the disposition or recovery occurs more
   43  than twelve but not more than twenty-four months after the  end  of  the
   44  taxable year with respect to which the credit is allowed,
   45    (iii)  fifty  percent, if the disposition or recovery occurs more than
   46  twenty-four months but not more than thirty-six months after the end  of
   47  the taxable year with respect to which the credit is allowed, or
   48    (iv)  twenty-five  percent, if the disposition or recovery occurs more
   49  than thirty-six months but not more than forty-eight  months  after  the
   50  end of the taxable year with respect to which the credit is allowed; or
   51    (B) [for credits allowed pursuant to subparagraph two of paragraph (a)
   52  of  this  subdivision]  in the case of a twenty percent credit on a QETC
   53  investment or a forty percent credit on a QNTC investment:
   54    (i) one hundred percent, if the disposition or recovery occurs  within
   55  the  taxable  year with respect to which the credit is allowed or within
   56  twelve months of the end of such taxable year,

       S. 6295                            52                            A. 9295

    1    (ii) eighty percent, if the disposition or recovery occurs  more  than
    2  twelve but not more than forty-eight months after the end of the taxable
    3  year with respect to which the credit is allowed,
    4    (iii)  sixty  percent, if the disposition or recovery occurs more than
    5  forty-eight months but not more than seventy-two months after the end of
    6  the taxable year with respect to which the credit is allowed,
    7    (iv) forty percent, if the disposition or recovery  occurs  more  than
    8  seventy-two  months but not more than ninety-six months after the end of
    9  the taxable year with respect to which the credit is allowed, or
   10    (v) twenty percent, if the disposition or recovery  occurs  more  than
   11  ninety-six  months  but not more than one hundred eight months after the
   12  end of the taxable year with respect to which the credit is allowed.
   13    § 3. Paragraph 1 of subsection (i) of section 606 of the tax  law,  as
   14  amended  by  section  2 of part J of chapter 407 of the laws of 1999, is
   15  amended to read as follows:
   16    (1) For purposes of determining the application under this section  of
   17  the  credit  provisions enumerated in the following table, a shareholder
   18  of a New York S corporation:
   19    (A) shall be treated as the taxpayer with respect to his  or  her  pro
   20  rata  share of the corresponding credit base of such corporation, deter-
   21  mined for the corporation's taxable  year  ending  with  or  within  the
   22  shareholder's taxable year and
   23    (B)  shall  be  treated as the owner of a new business with respect to
   24  such share if the corporation qualifies as a new  business  pursuant  to
   25  paragraph  (j)  of subdivision twelve of section two hundred ten of this
   26  chapter, unless the shareholder has  previously  received  a  refund  by
   27  reason of the application of this subparagraph, or this subsection as it
   28  was  in effect for taxable years beginning before nineteen hundred nine-
   29  ty-four.

   30                                          The corporation's
   31  With respect to the                     credit base under
   32  following credit                        section two hundred ten
   33  under this section:                     or section fourteen
   34                                          hundred fifty-six of this
   35                                          chapter is:

   36  Investment tax credit                   Investment credit base
   37  under subsection (a)                    or qualified
   38                                          rehabilitation
   39                                          expenditures under
   40                                          subdivision twelve of
   41                                          section two hundred ten

   42  Economic development                    Cost or other basis
   43  zone investment tax credit              under subdivision
   44  under subsection (j)                    twelve-B
   45                                          of section two hundred
   46                                          ten

   47  Economic development                    Eligible wages under
   48  zone wage tax credit                    subdivision nineteen of
   49  under subsection (k)                    section two hundred ten
   50                                          or subsection (e) of
   51                                          section fourteen hundred
   52                                          fifty-six

       S. 6295                            53                            A. 9295

    1  Economic development zone               Qualified investments
    2  capital tax credit                      and contributions under
    3  under subsection (1)                    subdivision twenty of
    4                                          section two hundred ten
    5                                          or subsection (d) of
    6                                          section fourteen hundred
    7                                          fifty-six

    8  Agricultural property tax               Allowable school
    9  credit under subsection (n)             district property taxes under
   10                                          subdivision twenty-two of
   11                                          section two hundred ten

   12  Credit for employment                   Qualified first-year wages or
   13  of persons with dis-                    qualified second-year wages
   14  abilities under                         under subdivision
   15  subsection (o)                          twenty-three of section
   16                                          two hundred ten
   17                                          or subsection (f)
   18                                          of section fourteen
   19                                          hundred fifty-six

   20  Employment incentive                    Applicable investment credit
   21  credit under subsec-                    base under subdivision
   22  tion (a-1)                              twelve-D

   23  Economic develop-                       Applicable investment
   24  ment zone employment                    credit under sub-
   25  incentive credit under                  division twelve-C
   26  subsection (j-1)

   27  Alternative fuels credit                Cost under subdivision
   28  under subsection (p)                    twenty-four

   29  [Qualified emerging                     Applicable credit base
   30  technology] Technology company          under subdivision twelve-E
   31  employment [credit] credits             of section two hundred ten
   32  under subsection (q)

   33  [Qualified emerging                     Qualified investments under
   34  technology] Technology company          subdivision twelve-F of
   35  capital tax [credit] credits            section two hundred ten
   36  under subsection (r)

   37  Credit for purchase of an               Cost of an automated
   38  automated external defibrillator        external defibrillator under
   39  under subsection (s)                    subdivision twenty-five of
   40                                          section two hundred ten
   41                                          or subsection (j) of section
   42                                          fourteen hundred fifty-six
   43    § 4. Subsection (q) of section 606 of the tax law, as added by section
   44  2  of  part  I of chapter 407 of the laws of 1999, is amended to read as
   45  follows:
   46    (q) [Qualified  emerging  technology]  Technology  company  employment
   47  [credit]  credits. (1) General. A taxpayer which is a sole proprietor of
   48  a qualified emerging technology company (QETC) or a qualified new  tech-

       S. 6295                            54                            A. 9295

    1  nology  company  (QNTC),  a member of a partnership which is a QETC or a
    2  QNTC, or a shareholder of a New York S corporation which is a QETC or  a
    3  QNTC and which meets the employment test specified in paragraph three of
    4  this subsection shall be allowed a credit, to be computed as hereinafter
    5  provided, against the tax imposed by this article[, provided:
    6    (A) the taxpayer is a sole proprietor of a].
    7    (2)  Definitions. (A) The term "qualified emerging technology company"
    8  shall have the meaning ascribed thereto by[, a member of  a  partnership
    9  which  is a qualified emerging technology company, or a shareholder of a
   10  New York S corporation which is a qualified emerging technology company,
   11  as defined in] section thirty-one hundred two-e of the  public  authori-
   12  ties law[; and].
   13    (B)  The  terms  "qualified  new technology company" and "upstate high
   14  technology enterprise zone" (zone)  shall  have  the  meanings  ascribed
   15  thereto in section sixteen of this chapter.
   16    (C)  The  term "small QNTC" shall mean a QNTC which during the taxable
   17  year has gross sales of less than ten million dollars.
   18    (D) The term "large QNTC" shall mean a QNTC which during  the  taxable
   19  year  has  gross  sales  of  at  least ten million but not more than one
   20  hundred million dollars.
   21    (3) Employment test. (A) In the case of a QETC, the average number  of
   22  individuals  employed full-time by such company in New York state during
   23  the taxable year is at least one hundred one percent of  such  company's
   24  base [year] period employment.
   25    (B) In the case of a small QNTC, (i) the average number of individuals
   26  employed full-time by such company in upstate high technology enterprise
   27  zones during the taxable year is greater than such number determined for
   28  the base period,
   29    (ii)  the  increase  described  in  clause (i) of this subparagraph is
   30  equal to or greater than one  percent  of  such  company's  base  period
   31  employment, and
   32    (iii)  the  average  number  of  individuals employed full-time in the
   33  state during the taxable year exceeds the base period employment  by  an
   34  amount  which  equals or exceeds the increase described in clause (i) of
   35  this subparagraph.
   36    (C) In the case of a large QNTC, (i) the average number of individuals
   37  employed full-time by such company in upstate high technology enterprise
   38  zones during the taxable year is greater than such number determined for
   39  the base period,
   40    (ii) the increase described in clause  (i)  of  this  subparagraph  is
   41  equal  to  or  greater  than  ten  percent of such company's base period
   42  employment, and
   43    (iii) the average number of  individuals  employed  full-time  in  the
   44  state  during  the taxable year exceeds the base period employment by an
   45  amount which equals or exceeds the increase described in clause  (i)  of
   46  this subparagraph.
   47    (4)  Base  period;  base period employment. For [the] purposes of this
   48  subsection, (A) the term "base period" means  the  three  taxable  years
   49  immediately  preceding  the  first  taxable  year in which the credit is
   50  claimed and
   51    (B) the term "base [year] period employment" means the average  number
   52  of  individuals  employed  full-time by such company in the state during
   53  the [three taxable years immediately preceding the first taxable year in
   54  which the credit is claimed] base period.
   55    (C) Short years. Where  such  company  provided  full-time  employment
   56  within  the  state  (in the case of a QETC), or within any zones (in the

       S. 6295                            55                            A. 9295

    1  case of a QNTC), during only a portion of such three-year  period,  then
    2  for  purposes of this subsection, the term "three years" shall be deemed
    3  to refer instead to such portion, provided, however, the  first  taxable
    4  year  for  which  this  credit may be taken with respect to such company
    5  shall be the [next] taxable year next following the first  full  taxable
    6  year  [that]  during  which such company had full-time employment in New
    7  York state (in the case of a QETC) or in any zone  (in  the  case  of  a
    8  QNTC).
    9    [(2)]  (5) Allowance of credit. The credit under this subsection shall
   10  be allowed only in the first taxable year in which the credit is claimed
   11  and in each of the next two taxable years, provided that the  conditions
   12  of paragraph one of this subsection are satisfied in each taxable year.
   13    [(3)]  (6) Employee counts. For the purposes of this subsection, aver-
   14  age number of individuals employed full-time shall be computed by adding
   15  the number of such individuals employed by such company at  the  end  of
   16  each  quarter  during  each  taxable year or other applicable period and
   17  dividing the sum so obtained by the number of  such  quarters  occurring
   18  within  such taxable year or other applicable period; provided, however,
   19  that in computing base [year] period employment there shall be  excluded
   20  therefrom  any employee with respect to whom a credit provided for under
   21  subsection (k) of this section is claimed for the taxable year.
   22    [(4) The] (7) Amount of credit. (A) In the case of a QETC, the  amount
   23  of  the  credit  shall equal the product of one thousand dollars [multi-
   24  plied by] and the number  of  individuals  employed  full-time  by  such
   25  company  in  the  taxable  year  [that  are]  which is in excess of [one
   26  hundred percent of] such company's base [year] period employment.
   27    (B) In the case of a QNTC, the amount of the credit  shall  equal  the
   28  product  of  two thousand dollars and the number of individuals employed
   29  full-time by such company  within  upstate  high  technology  enterprise
   30  zones  during  the  taxable  year  which  is in excess of such company's
   31  employment within any such zones during the company's base period.
   32    [(5) If] (8) Application of credit. (A) QETC. In the case of  a  QETC,
   33  if  the amount of the credit and carryovers of such credit allowed under
   34  this subsection for any taxable year shall exceed the taxpayer's tax for
   35  such year, the excess, as well as any part of the credit  or  carryovers
   36  of  such  credit,  or both, may be carried over to the following year or
   37  years and may be deducted from the  taxpayer's  tax  for  such  year  or
   38  years.  In  lieu  of carrying over any such excess, a taxpayer who [(A)]
   39  (i) qualifies as an owner of a new business (in the case of such [quali-
   40  fied  emerging  technology  company]  QETC)  under  paragraph   ten   of
   41  subsection  (a)  of  this  section without regard to subparagraph (C) of
   42  such paragraph, and [(B) the taxpayer] (ii) who has  not  operated  such
   43  new business entity, in the case of a sole proprietorship, or where such
   44  new  business  entity is a partnership or a New York S corporation, such
   45  entity has not operated, for more  than  six  taxable  years  (excluding
   46  short taxable years) prior to the taxable year with respect to which the
   47  taxpayer  first becomes eligible for the credit herein provided for with
   48  respect to such company, or for more than eight taxable  years  if  such
   49  new business entity's primary business or product requires federal regu-
   50  latory approval or involves the discovery and sale of substances requir-
   51  ing  clinical  trials  as  part  of  the  federal  drug administration's
   52  required approval process for the use of such substances by humans, may,
   53  at his or her option, receive such excess as a refund. Any  refund  paid
   54  pursuant to this paragraph shall be deemed to be a refund of an overpay-
   55  ment  of tax as provided in section six hundred eighty-six of this arti-
   56  cle, provided, however, that no interest shall be paid thereon.

       S. 6295                            56                            A. 9295

    1    (B) QNTC. In the case of a QNTC, if the amount of the  credit  allowed
    2  under  this  subsection for any taxable year shall exceed the taxpayer's
    3  tax for such year, the excess shall be treated as an overpayment of  tax
    4  to  be credited or refunded in accordance with the provisions of section
    5  six  hundred  eighty-six  of  this  article,  provided, however, that no
    6  interest shall be paid thereon.
    7    § 5. Subsection (r) of section 606 of the tax law, as added by section
    8  2 of part I of chapter 407 of the laws of 1999, is amended  to  read  as
    9  follows:
   10    (r)  [Qualified  emerging  technology]  Technology company capital tax
   11  [credit] credits.  (1) Allowance of credit. A taxpayer shall be  allowed
   12  a  credit  against  the  tax imposed by this article for investment in a
   13  qualified emerging technology company (QETC) or a  small  qualified  new
   14  technology  company (QNTC).   The amount of the credit shall be equal to
   15  [one of the following percentages, per] the allowable percentage of each
   16  qualified investment made during the taxable year in a [qualified emerg-
   17  ing technology company as defined in section thirty-one hundred two-e of
   18  the public authorities law, made during the taxable year, and  certified
   19  by  the  commissioner,  either:  (A)]  QETC, or a small QNTC which has a
   20  location in an upstate high technology enterprise zone, provided, howev-
   21  er, no credit shall be allowed under this  subsection  with  respect  to
   22  such  company  unless such company is certified by the commissioner as a
   23  QETC, or a small QNTC which has a location in an upstate high technology
   24  enterprise zone.
   25    (2) Definitions. (A) The term "qualified emerging technology  company"
   26  shall  have  the  meaning ascribed thereto in section thirty-one hundred
   27  two-e of the public authorities law.
   28    (B) The term "qualified new  technology  company"  and  "upstate  high
   29  technology  enterprise  zone" shall have the meaning ascribed thereto in
   30  section sixteen of this chapter.
   31    (C) The term "small QNTC" shall have the meaning ascribed  thereto  in
   32  subsection (q) of this section.
   33    (D)  The term "allowable percentage" means: (i) in the case of invest-
   34  ment in a QETC,
   35    (I) ten percent of qualified investments [in qualified emerging  tech-
   36  nology  companies,  except  for  investments  made by or on behalf of an
   37  owner of the business, including, but not  limited  to,  a  stockholder,
   38  partner or sole proprietor, or any related person, as defined in subpar-
   39  agraph  (C) of paragraph three of subsection (b) of section four hundred
   40  sixty-five of the internal revenue code, and provided, however, that] if
   41  the taxpayer certifies to the commissioner that the qualified investment
   42  will not be sold, transferred, traded, or disposed of  during  the  four
   43  years following the year in which the credit is first claimed; or
   44    [(B)]  (II)  twenty  percent  of  qualified  investments [in qualified
   45  emerging technology companies, except for  investments  made  by  or  on
   46  behalf  of  an  owner  of the business, including, but not limited to, a
   47  stockholder, partner or sole  proprietor,  or  any  related  person,  as
   48  defined  in  subparagraph  (C)  of  paragraph three of subsection (b) of
   49  section four hundred  sixty-five  of  the  internal  revenue  code,  and
   50  provided,  however,  that] if the taxpayer certifies to the commissioner
   51  that the qualified investment will not be sold, transferred, traded,  or
   52  disposed of during the nine years following the year in which the credit
   53  is first claimed.
   54    [(C)]  (ii)  in  the  case  of  investment in a small QNTC, (I) twenty
   55  percent of qualified  investments  if  the  taxpayer  certifies  to  the
   56  commissioner  that  the  qualified  investment  will not be sold, trans-

       S. 6295                            57                            A. 9295

    1  ferred, traded, or disposed of during the four years following the  year
    2  in which the credit is first claimed; or
    3    (II)  forty percent of qualified investments if the taxpayer certifies
    4  to the commissioner that the qualified  investment  will  not  be  sold,
    5  transferred,  traded, or disposed of during the nine years following the
    6  year in which the credit is first claimed.
    7    (E) "Qualified investment" means the contribution  of  property  to  a
    8  corporation in exchange for original issue capital stock or other owner-
    9  ship interest, the contribution of property to a partnership in exchange
   10  for  an  interest  in  the partnership, and similar contributions in the
   11  case of a business entity  not  in  corporate  or  partnership  form  in
   12  exchange for an ownership interest in such entity.  Provided, however, a
   13  qualified  investment  shall  not  include  an  investment made by or on
   14  behalf of an owner of the business, including, but  not  limited  to,  a
   15  stockholder,  partner  or  sole  proprietor,  or  any related person, as
   16  defined in subparagraph (C) of paragraph  three  of  subsection  (b)  of
   17  section four hundred sixty-five of the internal revenue code.
   18    (3)  Aggregate credit limitation. The total amount of credit allowable
   19  to a taxpayer under this [provision] subsection for all years, taken  in
   20  the aggregate, shall not exceed:
   21    (A)  in  the  case  of qualified investments in QETCs, (i) one hundred
   22  fifty thousand dollars in the case  of  investments  [made  pursuant  to
   23  subparagraph  (A)  of  this  paragraph  and  shall not exceed] where the
   24  allowable percentage is ten percent, and
   25    (ii) three hundred thousand dollars in the case of  investments  [made
   26  pursuant  to  subparagraph  (B)  of  this paragraph] where the allowable
   27  percentage is twenty percent.
   28    (B) in the case of qualified investments in  small  QNTCs,  (i)  three
   29  hundred  thousand dollars in the case of investments where the allowable
   30  percentage is twenty percent, and
   31    (ii) six hundred thousand dollars in the case of investments where the
   32  allowable percentage is forty percent.
   33    (C) In the case of a husband or wife who is required to file  a  sepa-
   34  rate return, the credit limitation amounts under this paragraph shall be
   35  one-half  of  the amounts set forth in subparagraphs (A) and (B) of this
   36  paragraph, unless the spouse of the taxpayer  has  no  credit  allowable
   37  under  this  subsection  for  the taxable year of such spouse which ends
   38  within or with the taxpayer's taxable year.
   39    (D) In the case of an estate or trust, the credit  limitation  amounts
   40  under  this paragraph shall be apportioned among the estate or trust and
   41  the beneficiaries in the same manner as the  income  of  the  estate  or
   42  trust is apportioned.
   43    (4)  Application  of  credit.  (A) QETC. In the case of investments in
   44  QETCs, [(2) (A) If] if the amount of the credit and carryovers  of  such
   45  credit  allowed  under this subsection for any taxable year shall exceed
   46  the taxpayer's tax for such year, any amount of credit or carryovers  of
   47  such credit thus not deductible in such taxable year may be carried over
   48  to the following year or years and may be deducted from the tax for such
   49  year or years. In addition, the amount of such credit, and carryovers of
   50  such credit to the taxable year, deducted from the tax otherwise due may
   51  not,  in  the  aggregate,  exceed fifty percent of the tax imposed under
   52  section six hundred one computed without regard to any  credit  provided
   53  for by this section.
   54    [(B)  In the case of a husband or wife who is required to file a sepa-
   55  rate return, the limitations provided for in subparagraph (c)  of  para-
   56  graph  one  of this subsection shall be seventy-five thousand dollars in

       S. 6295                            58                            A. 9295

    1  lieu of one hundred fifty thousand dollars, and one hundred fifty  thou-
    2  sand  dollars  in  lieu  of  three  hundred thousand dollars, unless the
    3  spouse of the taxpayer has no credit allowable under this subsection for
    4  the taxable year of such spouse which ends within or with the taxpayer's
    5  taxable year.
    6    (C) In the case of an estate or trust, the limitations provided for in
    7  paragraph  one  of  this  subsection shall be reduced to an amount which
    8  bears the same ratio to one hundred fifty thousand dollars and an amount
    9  which bears the same ratio to three  hundred  thousand  dollars  as  the
   10  portion  of  the income of the estate or trust which is not allocated to
   11  beneficiaries bears to the total income of the estate or trust.]
   12    (B) QNTC. In the case of investments in small QNTCs, if the amount  of
   13  the  credit  allowed  under  this  subsection for any taxable year shall
   14  exceed the taxpayer's tax for such year, the excess shall be treated  as
   15  an  overpayment of tax to be credited or refunded in accordance with the
   16  provisions of section six hundred eighty-six of this article,  provided,
   17  however, that no interest shall be paid thereon.
   18    [(3)]  (5)  Credit recapture. (A) Where a taxpayer sells, transfers or
   19  otherwise disposes of corporate stock, a partnership interest  or  other
   20  ownership  interest  arising  from  the making of a qualified investment
   21  which was the basis, in whole or in part, for the allowance  under  this
   22  subsection  of  [the credit provided for under subparagraph (A) of para-
   23  graph one of this subsection] a ten percent credit in the case of a QETC
   24  investment or a twenty percent credit in the case of a QNTC  investment,
   25  or  where  an  investment  which was the basis for such allowance is, in
   26  whole or in part, recovered by such taxpayer, and  such  disposition  or
   27  recovery  occurs  during  the  taxable year or within forty-eight months
   28  from the close of the taxable year with respect to which such credit  is
   29  allowed,  the  taxpayer shall add back, with respect to the taxable year
   30  in which the disposition  or  recovery  described  above  occurred,  the
   31  required portion of the credit originally allowed.
   32    (B)  Where a taxpayer sells, transfers or otherwise disposes of corpo-
   33  rate stock, a partnership interest or other ownership  interest  arising
   34  from  the making of a qualified investment which was the basis, in whole
   35  or in part, for the allowance  under  this  subsection  of  [the  credit
   36  provided for under subparagraph (B) of paragraph one of this subsection]
   37  a  twenty percent credit in the case of a QETC or a forty percent credit
   38  in the case of a QNTC, or where an investment which was  the  basis  for
   39  such  allowance is in any manner, in whole or in part, recovered by such
   40  taxpayer, and such disposition or recovery  occurs  during  the  taxable
   41  year  or  within  one hundred eight months from the close of the taxable
   42  year with respect to which such credit is allowed,  the  taxpayer  shall
   43  add  back,  with respect to the taxable year in which the disposition or
   44  recovery  described  [in  subparagraph  one  of  this  paragraph]  above
   45  occurred, the required portion of the credit originally allowed.
   46    (C) The required portion of the credit originally allowed shall be the
   47  product  of  (i) the portion of such credit attributable to the property
   48  disposed of and (ii) the applicable percentage.
   49    (D) The applicable percentage shall be:
   50    (i) [for credits allowed pursuant to subparagraph (A) of paragraph one
   51  of this subsection] in the case of  a  ten  percent  credit  on  a  QETC
   52  investment or a twenty percent credit on a QNTC investment:
   53    (I)  one hundred percent, if the disposition or recovery occurs within
   54  the taxable year with respect to which the credit is allowed  or  within
   55  twelve months of the end of such taxable year,

       S. 6295                            59                            A. 9295

    1    (II)  seventy-five percent, if the disposition or recovery occurs more
    2  than twelve but not more than twenty-four months after the  end  of  the
    3  taxable year with respect to which the credit is allowed,
    4    (III)  fifty  percent, if the disposition or recovery occurs more than
    5  twenty-four months but not more than thirty-six months after the end  of
    6  the taxable year with respect to which the credit is allowed, or
    7    (IV)  twenty-five  percent, if the disposition or recovery occurs more
    8  than thirty-six months but not more than forty-eight  months  after  the
    9  end of the taxable year with respect to which the credit is allowed; or
   10    (ii)  [for  credits  allowed pursuant to subparagraph (B) of paragraph
   11  one of this subsection] in the case of a twenty percent credit on a QETC
   12  investment or a forty percent credit on a QNTC investment:
   13    (I) one hundred percent, if the disposition or recovery occurs  within
   14  the  taxable  year with respect to which the credit is allowed or within
   15  twelve months of the end of such taxable year,
   16    (II) eighty percent, if the disposition or recovery occurs  more  than
   17  twelve but not more than forty-eight months after the end of the taxable
   18  year with respect to which the credit is allowed,
   19    (III)  sixty  percent, if the disposition or recovery occurs more than
   20  forty-eight months but not more than seventy-two months after the end of
   21  the taxable year with respect to which the credit is allowed,
   22    (IV) forty percent, if the disposition or recovery  occurs  more  than
   23  seventy-two  months but not more than ninety-six months after the end of
   24  the taxable year with respect to which the credit is allowed, or
   25    (V) twenty percent, if the disposition or recovery  occurs  more  than
   26  ninety-six  months  but not more than one hundred eight months after the
   27  end of the taxable year with respect to which the credit is allowed.
   28    § 6. This act shall take effect immediately and shall apply to taxable
   29  years beginning on or after January 1, 2002 and before January 1, 2012.

   30                                   PART E

   31    Section 1.  The tax law is amended by adding a new section 15 to  read
   32  as follows:
   33    § 15. QNTC credit for acquisition interest for upstate high technology
   34  enterprise zone property. (a) Allowance of credit. A taxpayer which is a
   35  qualified  new  technology  company  (QNTC)  and which is subject to tax
   36  under article nine-A or twenty-two of this chapter shall  be  allowed  a
   37  credit against such tax, pursuant to the provisions referenced in subdi-
   38  vision  (c) of this section. Such credit shall be equal to the amount of
   39  allowable interest paid or incurred during the taxable year with respect
   40  to qualified property.
   41    (b) Definitions. (1) The terms "qualified new technology company"  and
   42  "upstate  high  technology  enterprise  zone"  shall  have  the meanings
   43  ascribed thereto in section sixteen of this article.
   44    (2) The term "allowable interest" means interest on debt incurred  for
   45  the  purchase  or construction of qualified property, where such debt is
   46  secured by such qualified property and such interest is paid or incurred
   47  during the allowable period.
   48    (3) The term "qualified property" means  real  and  tangible  personal
   49  property  which  is  depreciable pursuant to section 167 of the internal
   50  revenue code, has a useful life of four years or more,  is  acquired  by
   51  purchase  as  defined  in section 179(d) of such code and is used in the
   52  taxpayer's trade or business in an upstate  high  technology  enterprise
   53  zone.

       S. 6295                            60                            A. 9295

    1    (4) The term "allowable period" means the five taxable years beginning
    2  with  the  taxable year during which the qualified property is placed in
    3  service in an upstate high technology enterprise zone.
    4    (c)  Cross-references.  For  application of the credit provided for in
    5  this section, see the following provisions of this chapter:
    6    (1) Article 9-A: Section 210, subdivision (27),
    7    (2) Article 22: Section 606, subsections (i) and (u).
    8    § 2.  Section 210 of the tax law is amended by adding a  new  subdivi-
    9  sion 27 to read as follows:
   10    27.  QNTC  credit for acquisition interest for upstate high technology
   11  enterprise zone property. (a) Allowance of credit. A taxpayer which is a
   12  qualified new technology company (QNTC) shall be allowed  a  credit  for
   13  acquisition interest for upstate high technology enterprise zone proper-
   14  ty,  to  be  computed  as  provided  in section fifteen of this chapter,
   15  against the tax imposed by this article.
   16    (b) Application of credit. The credit allowed under  this  subdivision
   17  for  any taxable year shall not reduce the tax due for such year to less
   18  than the higher of the amounts prescribed in paragraphs (c) and  (d)  of
   19  subdivision  one  of  this  section.    However, if the amount of credit
   20  allowed under this subdivision for any taxable year reduces the  tax  to
   21  such  amount,  any  amount of credit thus not deductible in such taxable
   22  year shall be treated as  an  overpayment  of  tax  to  be  credited  or
   23  refunded in accordance with the provisions of section ten hundred eight-
   24  y-six  of  this chapter. Provided, however, the provisions of subsection
   25  (c) of section ten hundred eighty-eight of this chapter notwithstanding,
   26  no interest shall be paid thereon.
   27    § 3. Paragraph 1 of subsection (i) of section 606 of the tax  law,  as
   28  amended  by  section  2 of part J of chapter 407 of the laws of 1999, is
   29  amended to read as follows:
   30    (1) For purposes of determining the application under this section  of
   31  the  credit  provisions enumerated in the following table, a shareholder
   32  of a New York S corporation:
   33    (A) shall be treated as the taxpayer with respect to his  or  her  pro
   34  rata  share of the corresponding credit base of such corporation, deter-
   35  mined for the corporation's taxable  year  ending  with  or  within  the
   36  shareholder's taxable year and
   37    (B)  shall  be  treated as the owner of a new business with respect to
   38  such share if the corporation qualifies as a new  business  pursuant  to
   39  paragraph  (j)  of subdivision twelve of section two hundred ten of this
   40  chapter, unless the shareholder has  previously  received  a  refund  by
   41  reason of the application of this subparagraph, or this subsection as it
   42  was  in effect for taxable years beginning before nineteen hundred nine-
   43  ty-four.

   44  With respect to the                     The corporation's
   45  following credit                        credit base under
   46  under this section:                     section two hundred ten
   47                                          or section fourteen
   48                                          hundred fifty-six of this
   49                                          chapter is:

   50  Investment tax credit                   Investment credit base
   51  under subsection (a)                    or qualified
   52                                          rehabilitation
   53                                          expenditures under
   54                                          subdivision twelve of

       S. 6295                            61                            A. 9295

    1                                          section two hundred ten

    2  Economic development                    Cost or other basis
    3  zone investment tax credit              under subdivision
    4  under subsection (j)                    twelve-B
    5                                          of section two hundred
    6                                          ten

    7  Economic development                    Eligible wages under
    8  zone 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  Economic development 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

   24  Credit for employment                   Qualified first-year wages or
   25  of persons with dis-                    qualified second-year wages
   26  abilities under                         under subdivision
   27  subsection (o)                          twenty-three of section
   28                                          two hundred ten
   29                                          or subsection (f)
   30                                          of section fourteen
   31                                          hundred fifty-six

   32  Employment incentive                    Applicable investment credit
   33  credit under subsec-                    base under subdivision
   34  tion (a-1)                              twelve-D

   35  Economic develop-                       Applicable investment
   36  ment zone employment                    credit under sub-
   37  incentive credit under                  division twelve-C
   38  subsection (j-1)

   39  Alternative fuels credit                Cost under subdivision
   40  under subsection (p)                    twenty-four

   41  Qualified emerging                      Applicable credit base
   42  technology company                      under subdivision twelve-E
   43  employment credit                       of section two hundred ten
   44  under subsection (q)

   45  Qualified emerging                      Qualified investments under
   46  technology company                      subdivision twelve-F of

       S. 6295                            62                            A. 9295

    1  capital tax credit                      section two hundred ten
    2  under subsection (r)

    3  Credit for purchase of an               Cost of an automated
    4  automated external defibrillator        external defibrillator under
    5  under subsection (s)                    subdivision twenty-five of
    6                                          section two hundred ten
    7                                          or subsection (j) of section
    8                                          fourteen hundred fifty-six

    9  QNTC credit for acquisition             Amount of credit under
   10  interest for upstate high               subdivision twenty-seven of
   11  technology zone property under          section two hundred ten
   12  subsection (u)

   13    §  4. Section 606 of the tax law is amended by adding a new subsection
   14  (u) to read as follows:
   15    (u) QNTC credit for acquisition interest for upstate  high  technology
   16  enterprise zone property. (1) Allowance of credit. A taxpayer which is a
   17  qualified  new  technology  company (QNTC) shall be allowed a credit for
   18  acquisition interest for upstate high technology enterprise zone proper-
   19  ty, to be computed as provided  in  section  fifteen  of  this  chapter,
   20  against the tax imposed by this article.
   21    (2)  Application  of credit. If the amount of the credit allowed under
   22  this subsection for any taxable year shall exceed the taxpayer's tax for
   23  such year, the excess shall be treated as an overpayment of  tax  to  be
   24  credited  or  refunded  in accordance with the provisions of section six
   25  hundred eighty-six of this article, provided, however, that no  interest
   26  shall be paid thereon.
   27    § 5. This act shall take effect immediately and shall apply to taxable
   28  years beginning on or after January 1, 2002 and before January 1, 2012.

   29                                   PART F

   30    Section 1. The article heading of article 1 of the tax law, as amended
   31  by chapter 960 of the laws of 1958, is amended to read as follows:
   32    SHORT TITLE; DEFINITIONS; CREDITS; MISCELLANEOUS
   33    §  2.  The  tax  law  is amended by adding a new section 14 to read as
   34  follows:
   35    § 14. QNTC credit for energy taxes paid  in  upstate  high  technology
   36  enterprise  zones. (a) Allowance of credit. A taxpayer which is a quali-
   37  fied new technology company (QNTC) and which is  subject  to  tax  under
   38  article  nine-A  or twenty-two of this chapter shall be allowed a credit
   39  against such tax, pursuant to the provisions referenced  in  subdivision
   40  (d)  of this section. Such credit shall be equal to the sum of the taxes
   41  imposed under sections one hundred eighty-six-a and one hundred  eighty-
   42  nine  of  this chapter which during the taxable year were either paid by
   43  the taxpayer or passed through to the taxpayer but only with  regard  to
   44  gas,  electricity,  steam,  water  or  refrigeration,  or gas, electric,
   45  steam, water or refrigeration services, consumed by the taxpayer  in  an
   46  upstate high technology enterprise zone.
   47    (b)  Definitions.  The  terms  "qualified  new technology company" and
   48  "upstate high  technology  enterprise  zone"  shall  have  the  meanings
   49  ascribed thereto in section sixteen of this article.
   50    (c)  Any person who collects from, or passes through to, the taxpayer,
   51  any tax as described in subdivision (a) of this section,  shall  provide

       S. 6295                            63                            A. 9295

    1  the  taxpayer with the information with respect to such tax collected or
    2  passed through which may be required to enable the taxpayer to correctly
    3  compute the credit provided for in this section.
    4    (d)  Cross-references.  For  application of the credit provided for in
    5  this section, see the following provisions of this chapter:
    6    (1) Article 9-A: Section 210, subdivision (26),
    7    (2) Article 22: Section 606, subsections (i) and (t).
    8    § 3. Subdivision 26 of section 210 of the tax law,  as  renumbered  by
    9  section  1  of  part J of chapter 407 of the laws of 1999, is renumbered
   10  subdivision 34 and a new subdivision 26 is added to read as follows:
   11    26. QNTC credit for energy  taxes  paid  in  upstate  high  technology
   12  enterprise  zones. (a) Allowance of credit. A taxpayer which is a quali-
   13  fied new technology company (QNTC) shall be allowed a credit for  energy
   14  taxes  paid  in upstate high technology enterprise zones, to be computed
   15  as provided in section fourteen of this chapter, against the tax imposed
   16  by this article.
   17    (b) Application of credit. The credit allowed under  this  subdivision
   18  for  any taxable year shall not reduce the tax due for such year to less
   19  than the higher of the amounts prescribed in paragraphs (c) and  (d)  of
   20  subdivision  one  of  this  section.    However, if the amount of credit
   21  allowed under this subdivision for any taxable year reduces the  tax  to
   22  such  amount,  any  amount of credit thus not deductible in such taxable
   23  year shall be treated as  an  overpayment  of  tax  to  be  credited  or
   24  refunded in accordance with the provisions of section ten hundred eight-
   25  y-six  of  this chapter. Provided, however, the provisions of subsection
   26  (c) of section ten hundred eighty-eight of this chapter notwithstanding,
   27  no interest shall be paid thereon.
   28    § 4. Paragraph 1 of subsection (i) of section 606 of the tax  law,  as
   29  amended  by  section  2 of part J of chapter 407 of the laws of 1999, is
   30  amended to read as follows:
   31    (1) For purposes of determining the application under this section  of
   32  the  credit  provisions enumerated in the following table, a shareholder
   33  of a New York S corporation:
   34    (A) shall be treated as the taxpayer with respect to his  or  her  pro
   35  rata  share of the corresponding credit base of such corporation, deter-
   36  mined for the corporation's taxable  year  ending  with  or  within  the
   37  shareholder's taxable year and
   38    (B)  shall  be  treated as the owner of a new business with respect to
   39  such share if the corporation qualifies as a new  business  pursuant  to
   40  paragraph  (j)  of subdivision twelve of section two hundred ten of this
   41  chapter, unless the shareholder has  previously  received  a  refund  by
   42  reason of the application of this subparagraph, or this subsection as it
   43  was  in effect for taxable years beginning before nineteen hundred nine-
   44  ty-four.

   45                                          The corporation's
   46  With respect to the                     credit base under
   47  following credit                        section two hundred ten
   48  under this section:                     or section fourteen
   49                                          hundred fifty-six of this
   50                                          chapter is:

   51  Investment tax credit                   Investment credit base
   52  under subsection (a)                    or qualified
   53                                          rehabilitation
   54                                          expenditures under

       S. 6295                            64                            A. 9295

    1                                          subdivision twelve of
    2                                          section two hundred ten

    3  Economic development                    Cost or other basis
    4  zone investment tax credit              under subdivision
    5  under subsection (j)                    twelve-B
    6                                          of section two hundred
    7                                          ten

    8  Economic development                    Eligible wages under
    9  zone wage tax credit                    subdivision nineteen of
   10  under subsection (k)                    section two hundred ten
   11                                          or subsection (e) of
   12                                          section fourteen hundred
   13                                          fifty-six

   14  Economic development zone               Qualified investments
   15  capital tax credit                      and contributions under
   16  under subsection (1)                    subdivision twenty of
   17                                          section two hundred ten
   18                                          or subsection (d) of
   19                                          section fourteen hundred
   20                                          fifty-six

   21  Agricultural property tax               Allowable school
   22  credit under subsection (n)             district property taxes under
   23                                          subdivision twenty-two of
   24                                          section two hundred ten

   25  Credit for employment                   Qualified first-year wages or
   26  of persons with dis-                    qualified second-year wages
   27  abilities under                         under subdivision
   28  subsection (o)                          twenty-three of section
   29                                          two hundred ten
   30                                          or subsection (f)
   31                                          of section fourteen
   32                                          hundred fifty-six

   33  Employment incentive                    Applicable investment credit
   34  credit under subsec-                    base under subdivision
   35  tion (a-1)                              twelve-D

   36  Economic develop-                       Applicable investment
   37  ment zone employment                    credit under sub-
   38  incentive credit under                  division twelve-C
   39  subsection (j-1)

   40  Alternative fuels credit                Cost under subdivision
   41  under subsection (p)                    twenty-four

   42  Qualified emerging                      Applicable credit base
   43  technology company                      under subdivision twelve-E
   44  employment credit                       of section two hundred ten
   45  under subsection (q)

       S. 6295                            65                            A. 9295

    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  QNTC credit for energy taxes            Amount of credit under
   12  paid in upstate high                    subdivision twenty-six of
   13  technology enterprise zones under       section two hundred ten
   14  subsection (t)
   15    §  5. Subsections (t) and (u) of section 606 of the tax law, as relet-
   16  tered by section 2 of part I of chapter 407 of the  laws  of  1999,  are
   17  relettered  subsections  (bb) and (cc) and a new subsection (t) is added
   18  to read as follows:
   19    (t) QNTC credit for energy  taxes  paid  in  upstate  high  technology
   20  enterprise  zones. (1) Allowance of credit. A taxpayer which is a quali-
   21  fied new technology company (QNTC) shall be allowed a credit for  energy
   22  taxes  paid  in upstate high technology enterprise zones, to be computed
   23  as provided in section fourteen of this chapter, against the tax imposed
   24  by this article.
   25    (2) Application of credit. If the amount of the credit  allowed  under
   26  this subsection for any taxable year shall exceed the taxpayer's tax for
   27  such  year,  the  excess shall be treated as an overpayment of tax to be
   28  credited or refunded in accordance with the provisions  of  section  six
   29  hundred  eighty-six of this article, provided, however, that no interest
   30  shall be paid thereon.
   31    § 6. This act shall take effect immediately and shall apply to taxable
   32  years beginning on or after January 1, 2002 and before January 1, 2012.

   33                                   PART G

   34    Section 1. Paragraph (a) of subdivision 1 of section 210  of  the  tax
   35  law,  as  amended  by  section  9 of part A of chapter 56 of the laws of
   36  1998, is amended to read as follows:
   37    (a) Entire net income base.  For taxable years beginning  before  July
   38  first, nineteen hundred ninety-nine, the amount prescribed by this para-
   39  graph  shall  be  computed at the rate of nine percent of the taxpayer's
   40  entire net income base.  For taxable years beginning after June  thirti-
   41  eth,  nineteen  hundred ninety-nine and before July first, two thousand,
   42  the amount prescribed by this paragraph shall be computed at the rate of
   43  eight and one-half percent of the taxpayer's  entire  net  income  base.
   44  For  taxable  years  beginning  after  June  thirtieth, two thousand and
   45  before July first, two thousand one, the amount prescribed by this para-
   46  graph shall be computed at the rate of eight percent of  the  taxpayer's
   47  entire  net  income base. For taxable years beginning after June thirti-
   48  eth, two thousand one, the amount prescribed by this paragraph shall  be
   49  computed  at  the  rate  of seven and one-half percent of the taxpayer's
   50  entire net income base.   The taxpayer's entire net  income  base  shall
   51  mean  the  portion  of the taxpayer's entire net income allocated within
   52  the state as hereinafter provided, subject to any modification  required

       S. 6295                            66                            A. 9295

    1  by paragraphs (d) and (e) of subdivision three of this section. However,
    2  in the case of a small business taxpayer, as defined in paragraph (f) of
    3  this  subdivision,  the  amount  prescribed  by  this paragraph shall be
    4  computed as follows:
    5    (i)  if  the entire net income base is not more than two hundred thou-
    6  sand dollars, (1) for taxable years beginning before July  first,  nine-
    7  teen  hundred  ninety-nine,  the  amount  shall  be eight percent of the
    8  entire net income base; [and] (2) for taxable years beginning after June
    9  thirtieth, nineteen hundred ninety-nine and before July first, two thou-
   10  sand three, the amount shall be seven and one-half percent of the entire
   11  net income base; and (3) for taxable years beginning after June  thirti-
   12  eth,  two thousand three, the amount shall be 6.85 percent of the entire
   13  net income base;
   14    (ii) if the entire net income base is more than two  hundred  thousand
   15  dollars  but not over two hundred ninety thousand dollars, (1) for taxa-
   16  ble years beginning before July first, nineteen hundred ninety-nine, the
   17  amount shall be the sum  of  (a)  sixteen  thousand  dollars,  (b)  nine
   18  percent  of  the  excess  of the entire net income base over two hundred
   19  thousand dollars and (c) five percent of the excess of  the  entire  net
   20  income  base  over  two  hundred fifty thousand dollars; (2) for taxable
   21  years beginning after June thirtieth, nineteen hundred  ninety-nine  and
   22  before  July  first,  two  thousand,  the amount shall be the sum of (a)
   23  fifteen thousand dollars, (b) eight and one-half percent of  the  excess
   24  of  the entire net income base over two hundred thousand dollars and (c)
   25  five percent of the excess of  the  entire  net  income  base  over  two
   26  hundred  fifty  thousand  dollars; (3) for taxable years beginning after
   27  June thirtieth, two thousand and before July first,  two  thousand  one,
   28  the  amount  shall be the sum of (a) fifteen thousand dollars, (b) eight
   29  percent of the excess of the entire net income  base  over  two  hundred
   30  thousand  dollars  and (c) two and one-half percent of the excess of the
   31  entire net income base over two hundred fifty  thousand  dollars;  [and]
   32  (4)  for  taxable years beginning after June thirtieth, two thousand one
   33  and before July first, two thousand three, the amount shall be seven and
   34  one-half percent of the entire net income  base;  and  (5)  for  taxable
   35  years  beginning  after  June  thirtieth, two thousand three, the amount
   36  shall be the sum of (a) thirteen thousand seven hundred dollars, (b) 7.5
   37  percent of the excess of the entire net income  base  over  two  hundred
   38  thousand  dollars  and  (c) 3.25 percent of the excess of the entire net
   39  income base over two hundred fifty thousand dollars;
   40    (iii) if the taxable period to which subparagraphs  (i)  and  (ii)  of
   41  this  paragraph  apply is less than twelve months, the amount prescribed
   42  by this paragraph shall be computed as follows:
   43    (A) Multiply the entire net income base for such taxpayer by twelve;
   44    (B) Divide the result obtained in (A) by the number of months  in  the
   45  taxable year;
   46    (C) Compute an amount pursuant to subparagraphs (i) and (ii) as if the
   47  result obtained in (B) were the taxpayer's entire net income base;
   48    (D) Multiply the result obtained in (C) by the number of months in the
   49  taxpayer's taxable year;
   50    (E) Divide the result obtained in (D) by twelve.
   51    §  2. Paragraph (g) of subdivision 1 of section 210 of the tax law, as
   52  added by chapter 190 of the laws of  1990,  subparagraphs  1  and  2  as
   53  amended  by  sections 12-a and 13 of part A of chapter 56 of the laws of
   54  1998, is amended to read as follows:
   55    (g) New York S corporations.  (1) Taxable years beginning before  July
   56  1,  2002.    (A)  General. [The] For taxable years beginning before July

       S. 6295                            67                            A. 9295

    1  first, two thousand two, the amount prescribed by this  paragraph  shall
    2  be,  in  the  case of each New York S corporation, (i) the higher of the
    3  amounts prescribed in paragraphs (a) and (d) of this subdivision  (other
    4  than  the  amount  prescribed in the final clause of subparagraph one of
    5  such paragraph (d)) (ii) reduced by the article  twenty-two  tax  equiv-
    6  alent,  provided,  however, that the amount thus determined shall not be
    7  less than the lowest of the amounts prescribed in  subparagraph  one  of
    8  such  paragraph (d) (with regard to the provisions of subparagraph three
    9  of such paragraph).
   10    [(2)] (B) Article twenty-two tax equivalent. For taxable years  begin-
   11  ning  before July first, nineteen hundred ninety-nine, the article twen-
   12  ty-two tax equivalent is the amount computed under paragraph (a) of this
   13  subdivision by substituting for the  rate  therein  the  rate  of  7.875
   14  percent.    For  taxable  years beginning after June thirtieth, nineteen
   15  hundred ninety-nine and before July first,  two  thousand,  the  article
   16  twenty-two  tax equivalent is the amount computed under paragraph (a) of
   17  this subdivision by substituting for the rate therein the rate of  7.525
   18  percent.  For taxable years beginning after June thirtieth, two thousand
   19  and before July first, two thousand [one] two,  the  article  twenty-two
   20  tax equivalent is the amount computed under paragraph (a) of this subdi-
   21  vision  by  substituting for the rate therein the rate of 7.175 percent.
   22  [For taxable years beginning after June thirtieth, two thousand one, the
   23  article twenty-two tax equivalent is the amount computed under paragraph
   24  (a) of this subdivision by substituting for the rate therein the rate of
   25  6.85 percent. However,]
   26    (C) Small business  taxpayers.    Notwithstanding  the  provisions  of
   27  clauses  (A)  and  (B) of this subparagraph, in the case of a New York S
   28  corporation which is a small business taxpayer, as defined in  paragraph
   29  (f) of this subdivision, [for] the following provisions shall apply:
   30    (i)  For  taxable  years beginning before July first, nineteen hundred
   31  ninety-nine,  the  article  twenty-two  tax  equivalent  is  the  amount
   32  computed under paragraph (a) of this subdivision by substituting for the
   33  rate therein the rate of 7.875 percent[, and for].
   34    (ii)  For  taxable  years  beginning  after  June  thirtieth, nineteen
   35  hundred ninety-nine and before July first, two thousand one, the  amount
   36  computed  under  paragraph  (a)  of  this subdivision, as referred to in
   37  [subparagraph one] clause (A) of this [paragraph] subparagraph, shall be
   38  computed by substituting for the rate therein the rate of  7.5  percent,
   39  and  the  article  twenty-two tax equivalent under paragraph (a) of this
   40  subdivision shall be computed as follows:
   41    [(i)] (I) if the entire net income base is not more than  two  hundred
   42  thousand  dollars,  the  article twenty-two tax equivalent is the amount
   43  computed under paragraph (a) of this subdivision by substituting for the
   44  rate therein the rate of 7.45 percent;
   45    [(ii)] (II) if the entire net income base is  more  than  two  hundred
   46  thousand  dollars  but  not over two hundred ninety thousand dollars the
   47  article twenty-two tax equivalent shall be computed as the sum of  [(A)]
   48  (a)  fourteen  thousand  nine hundred dollars, [(B)] (b) six and eighty-
   49  five hundredths percent of the first fifty thousand dollars in excess of
   50  the entire net income base over two hundred thousand dollars, and  [(C)]
   51  (c)  three  and eighty-five hundredths percent of the excess, if any, of
   52  the entire net income base over two hundred fifty thousand dollars.
   53    (iii) For taxable years beginning after June thirtieth,  two  thousand
   54  one  and  before July first, two thousand two, the amount computed under
   55  paragraph (a) of this subdivision, as referred to in clause (A) of  this
   56  subparagraph, shall be computed by substituting for the rate therein the

       S. 6295                            68                            A. 9295

    1  rate  of  7.5  percent,  and the article twenty-two tax equivalent under
    2  paragraph (a) of this subdivision shall be computed as follows:
    3    (I)  if  the entire net income base is not more than two hundred thou-
    4  sand dollars, the  article  twenty-two  tax  equivalent  is  the  amount
    5  computed under paragraph (a) of this subdivision by substituting for the
    6  rate therein the rate of 7.475 percent;
    7    (II)  if  the entire net income base is more than two hundred thousand
    8  dollars but not over two hundred ninety  thousand  dollars  the  article
    9  twenty-two  tax  equivalent shall be computed as the sum of (a) fourteen
   10  thousand nine hundred fifty dollars, (b)  7.175  percent  of  the  first
   11  fifty  thousand dollars in excess of the entire net income base over two
   12  hundred thousand dollars, and (c) 5.675 percent of the excess,  if  any,
   13  of the entire net income base over two hundred fifty thousand dollars.
   14    [(3)] (D) Termination year. In the case of a termination year, the tax
   15  for  the  S short year shall be computed under this subparagraph [one of
   16  this  paragraph]  without  regard  to  the  fixed  dollar  minimum   tax
   17  prescribed  in  paragraph (d) of this subdivision, and the tax for the C
   18  short year shall be computed under the opening paragraph of this  subdi-
   19  vision  without  regard to the fixed dollar minimum tax prescribed under
   20  such paragraph (d), but in no event shall the sum of the tax for  the  S
   21  short  year  and  the  tax  for  the C short year be less than the fixed
   22  dollar minimum tax under paragraph (d) of this subdivision  computed  as
   23  if  the corporation were a New York C corporation for the entire taxable
   24  year.
   25    (2) Taxable years beginning after June thirtieth,  two  thousand  two.
   26  (A) General. For taxable years beginning after June thirtieth, two thou-
   27  sand  two, the amount prescribed by this paragraph shall be, in the case
   28  of each New York S corporation, the corporation's fixed  dollar  minimum
   29  tax  prescribed  in paragraph (d) of this subdivision (without regard to
   30  the fixed dollar minimum prescribed in the final clause of  subparagraph
   31  one of such paragraph).
   32    (B)  Termination  year. In the case of a termination year, the tax for
   33  the S short year under clause (A) of this subparagraph  shall  be  zero,
   34  and  the  tax  for  the C short year shall be computed under the opening
   35  paragraph of this subdivision, provided, however, the fixed dollar mini-
   36  mum tax under paragraph (d) of this subdivision shall be computed as  if
   37  the  corporation  were  a  New York C corporation for the entire taxable
   38  year.
   39    § 3. This act shall take effect immediately.

   40                                   PART H

   41    Section 1. The tax law is amended by adding a new section 17  to  read
   42  as follows:
   43    §  17.  Credit for increased urban employment outside of the metropol-
   44  itan commuter  transportation  district.  (a)  Allowance  of  credit.  A
   45  taxpayer  subject to tax under article nine, nine-A, twenty-two, thirty-
   46  two or thirty-three of this chapter shall be allowed  a  credit  against
   47  such  tax,  pursuant  to the provisions referenced in subdivision (g) of
   48  this section, based on an increase in urban  employment  in  this  state
   49  outside of the metropolitan commuter transportation district.
   50    (b) Pre-requisite for credit. The job growth credit component provided
   51  for  in  this  section shall be allowed only where the average number of
   52  individuals, excluding general executive officers  (in  the  case  of  a
   53  corporation), employed full-time by the taxpayer during the taxable year
   54  in  (A) the state and (B) the cities of this state outside of the metro-

       S. 6295                            69                            A. 9295

    1  politan commuter transportation district, exceeds by more  than  twenty-
    2  five  the  average  number of such individuals employed full-time by the
    3  taxpayer in (i) the state and (ii) such cities, respectively, during the
    4  immediately  preceding taxable year (whether under article nine, nine-A,
    5  twenty-two, thirty-two or thirty-three of this chapter). If the taxpayer
    6  had no such  immediately  preceding  taxable  year,  such  numbers  with
    7  respect to such immediately preceding taxable year shall be deemed to be
    8  zero.
    9    (c)  Number of employees. The average number of individuals, excluding
   10  general executive officers (in the  case  of  a  corporation),  employed
   11  full-time  shall  be computed by determining the number of such individ-
   12  uals employed by the taxpayer on the  thirty-first  day  of  March,  the
   13  thirtieth  day  of  June, the thirtieth day of September and the thirty-
   14  first day of December during the applicable taxable year, adding togeth-
   15  er the number of such individuals determined to be so employed  on  each
   16  of  such  dates  and  dividing the sum so obtained by the number of such
   17  dates occurring within such applicable taxable year.
   18    (d) Amount of credit. (1) The amount of the credit for a taxable  year
   19  shall  be the sum of the job growth credit component and the job mainte-
   20  nance credit component allowable with respect to the taxable year.
   21    (2) Job growth credit component. The amount of the job  growth  credit
   22  component  shall  be the product of (A) the applicable credit factor set
   23  forth in paragraph (e) of this subdivision and (B)  the  excess  of  the
   24  average number of full-time employees, excluding general executive offi-
   25  cers  (in  the  case  of  a corporation), employed in the cities of this
   26  state outside of the metropolitan commuter  transportation  district  by
   27  the taxpayer during the taxable year over the sum of (i) twenty-five and
   28  (ii)  the  average number of such employees so employed during the imme-
   29  diately preceding taxable year  (whether  under  article  nine,  nine-A,
   30  twenty-two, thirty-two or thirty-three of this chapter). If the taxpayer
   31  had no such immediately preceding taxable year, such number with respect
   32  to such immediately preceding taxable year shall be deemed to be zero.
   33    (3)  Job  maintenance  credit component. The amount of the job mainte-
   34  nance credit component shall be an amount equal to the amount of the job
   35  growth credit component, if any, allowed for the  immediately  preceding
   36  taxable year (whether under article nine, nine-A, twenty-two, thirty-two
   37  or thirty-three of this chapter), and shall be allowed only if the aver-
   38  age  number of full-time employees, excluding general executive officers
   39  (in the case of a corporation), employed in the state and the cities  of
   40  this  state outside of the metropolitan commuter transportation district
   41  by the taxpayer during the taxable year is at least equal to the average
   42  number of such employees so employed in such immediately preceding taxa-
   43  ble year (whether under article nine, nine-A, twenty-two, thirty-two  or
   44  thirty-three of this chapter).
   45    (e)  Applicable  credit  factor. The applicable credit factor shall be
   46  five hundred dollars if the average hourly rate of compensation  of  all
   47  of the taxpayer's full-time employees, excluding general executive offi-
   48  cers  (in  the  case  of  a corporation), employed in the cities of this
   49  state outside  of  the  metropolitan  commuter  transportation  district
   50  during  the taxable year was in excess of eight dollars. If such average
   51  hourly rate of compensation was not in excess of eight dollars, then the
   52  applicable credit factor shall be two hundred fifty dollars.
   53    (f) Anti-abuse provision. (1) In the case  of  a  corporate  taxpayer,
   54  where the composition of the taxpayer is the result of a merger, consol-
   55  idation  or other reorganization, or of the incorporation of an unincor-
   56  porated business, the employment  figures  for  the  taxpayer  shall  be

       S. 6295                            70                            A. 9295

    1  computed  as  if  the  employment figures for the businesses or entities
    2  merged or consolidated into, or otherwise incorporated into, the taxpay-
    3  er were those of the taxpayer, for both the taxable year and  any  rele-
    4  vant  prior  taxable  year,  to  the  extent necessary to effectuate the
    5  intent and purposes of this section.
    6    (2) In the case of a taxpayer subject to tax under article  twenty-two
    7  of  this chapter, where the taxpayer is a sole proprietor or a member of
    8  a partnership, and where the composition of such business is the  result
    9  of an amalgamation of the operations of other businesses or entities, or
   10  of  the  liquidation  of  a  corporation, the employment figures for the
   11  business of which the taxpayer is the owner or partner shall be computed
   12  as if the employment figures for the entities or businesses  so  amalga-
   13  mated,  or  the corporation so liquidated, were those of the business of
   14  which the taxpayer is the owner or partner, to the extent  necessary  to
   15  effectuate the intent and purposes of this subdivision.
   16    (g)  Cross-references.   For application of the credit provided for in
   17  this section, see the following provisions of this chapter:
   18    (1) Article 9: Section 187-c,
   19    (2) Article 9-A: Section 210: subdivision 29,
   20    (3) Article 22: Sections 606: subsections (i) and (w),
   21    (4) Article 32: Section 1456: subsection (k),
   22    (5) Article 33: Section 1511: subdivision (m).
   23    § 2. The tax law is amended by adding a new section 187-c to  read  as
   24  follows:
   25    §  187-c.  Credit for increased urban employment outside of the metro-
   26  politan commuter transportation district.  1.  Allowance  of  credit.  A
   27  taxpayer  shall  be  allowed  a  credit,  to  be computed as provided in
   28  section seventeen of this chapter, against the taxes imposed by sections
   29  one hundred eighty-three, one hundred eighty-four, one  hundred  eighty-
   30  five and one hundred eighty-six of this article. Provided, however, that
   31  the  amount  of such credit allowable against the tax imposed by section
   32  one hundred eighty-four of this article  shall  be  the  excess  of  the
   33  amount  of  such  credit  over  the amount of any credit allowed by this
   34  section against the tax imposed by section one hundred  eighty-three  of
   35  this article.
   36    2.  Application  of  credit.  In  no event shall the credit under this
   37  section be allowed in an amount which will reduce  the  tax  payable  to
   38  less than the applicable minimum tax fixed by section one hundred eight-
   39  y-three, one hundred eighty-five or one hundred eighty-six of this arti-
   40  cle.  If, however, the amount of credit allowable under this section for
   41  any taxable year reduces the tax to such amount, any  amount  of  credit
   42  not deductible in such taxable year may be carried over to the ten taxa-
   43  ble  years next following such taxable year and may be deducted from the
   44  taxpayer's tax for such year or years.
   45    § 3. Section 210 of the tax law is amended by adding  new  subdivision
   46  29 to read as follows:
   47    29.  Credit for increased urban employment outside of the metropolitan
   48  commuter transportation district. (a) Allowance of  credit.  A  taxpayer
   49  shall  be allowed a credit, to be computed as provided in section seven-
   50  teen of this chapter, against the tax imposed by this article.
   51    (b) Application of credit.  The credit and carryovers of  such  credit
   52  allowed  under  this  subdivision for any taxable year shall not, in the
   53  aggregate, reduce the tax due for such year to less than the  higher  of
   54  the  amounts  prescribed in paragraphs (c) and (d) of subdivision one of
   55  this section. However, if the amount of credit  or  carryovers  of  such
   56  credit,  or  both,  allowed  under this subdivision for any taxable year

       S. 6295                            71                            A. 9295

    1  reduces the tax to such amount, any amount of credit  or  carryovers  of
    2  such credit thus not deductible in such taxable year may be carried over
    3  to  the  ten  taxable  years next following such taxable year and may be
    4  deducted from the taxpayer's tax for such year or years.
    5    §  4.  Paragraph 1 of subsection (i) of section 606 of the tax law, as
    6  amended by section 2 of part J of chapter 407 of the laws  of  1999,  is
    7  amended to read as follows:
    8    (1)  For purposes of determining the application under this section of
    9  the credit provisions enumerated in the following table,  a  shareholder
   10  of a New York S corporation:
   11    (A)  shall  be  treated as the taxpayer with respect to his or her pro
   12  rata share of the corresponding credit base of such corporation,  deter-
   13  mined  for  the  corporation's  taxable  year  ending with or within the
   14  shareholder's taxable year and
   15    (B) shall be treated as the owner of a new business  with  respect  to
   16  such  share  if  the corporation qualifies as a new business pursuant to
   17  paragraph (j) of subdivision twelve of section two hundred ten  of  this
   18  chapter,  unless  the  shareholder  has  previously received a refund by
   19  reason of the application of this subparagraph, or this subsection as it
   20  was in effect for taxable years beginning before nineteen hundred  nine-
   21  ty-four.

   22                                          The corporation's
   23  With respect to the                     credit base under
   24  following credit                        section two hundred ten
   25  under this section:                     or section fourteen
   26                                          hundred fifty-six of this
   27                                          chapter is:

   28  Investment tax credit                   Investment credit base
   29  under subsection (a)                    or qualified
   30                                          rehabilitation
   31                                          expenditures under
   32                                          subdivision twelve of
   33                                          section two hundred ten

   34  Economic development                    Cost or other basis
   35  zone investment tax credit              under subdivision
   36  under subsection (j)                    twelve-B
   37                                          of section two hundred
   38                                          ten

   39  Economic development                    Eligible wages under
   40  zone wage tax credit                    subdivision nineteen of
   41  under subsection (k)                    section two hundred ten
   42                                          or subsection (e) of
   43                                          section fourteen hundred
   44                                          fifty-six

   45  Economic development zone               Qualified investments
   46  capital tax credit                      and contributions under
   47  under subsection (1)                    subdivision twenty of
   48                                          section two hundred ten
   49                                          or subsection (d) of
   50                                          section fourteen hundred
   51                                          fifty-six

       S. 6295                            72                            A. 9295

    1  Agricultural property tax               Allowable school
    2  credit under subsection (n)             district property taxes under
    3                                          subdivision twenty-two of
    4                                          section two hundred ten

    5  Credit for employment                   Qualified first-year wages or
    6  of persons with dis-                    qualified second-year wages
    7  abilities under                         under subdivision
    8  subsection (o)                          twenty-three of section
    9                                          two hundred ten
   10                                          or subsection (f)
   11                                          of section fourteen
   12                                          hundred fifty-six

   13  Employment incentive                    Applicable investment credit
   14  credit under subsec-                    base under subdivision
   15  tion (a-1)                              twelve-D

   16  Economic develop-                       Applicable investment
   17  ment zone employment                    credit under sub-
   18  incentive credit under                  division twelve-C
   19  subsection (j-1)

   20  Alternative fuels credit                Cost under subdivision
   21  under subsection (p)                    twenty-four

   22  Qualified emerging                      Applicable credit base
   23  technology company                      under subdivision twelve-E
   24  employment credit                       of section two hundred ten
   25  under subsection (q)

   26  Qualified emerging                      Qualified investments under
   27  technology company                      subdivision twelve-F of
   28  capital tax credit                      section two hundred ten
   29  under subsection (r)

   30  Credit for purchase of an               Cost of an automated
   31  automated external defibrillator        external defibrillator under
   32  under subsection (s)                    subdivision twenty-five of
   33                                          section two hundred ten
   34                                          or subsection (j) of section
   35                                          fourteen hundred fifty-six

   36  Credit for increased                    Amount of credit under
   37  urban employment outside                subdivision twenty-nine
   38  of the metropolitan                     of section two hundred ten
   39  commuter transportation                 or subsection (k) of section fourteen
   40  district under subsection (w)           hundred fifty-six

   41    §  5. Section 606 of the tax law is amended by adding a new subsection
   42  (w) to read as follows:
   43    (w) Credit for increased urban employment outside of the  metropolitan
   44  commuter  transportation  district.  (1) Allowance of credit. A taxpayer
   45  shall be allowed a credit, to be computed as provided in section  seven-
   46  teen of this chapter, against the tax imposed by this article.

       S. 6295                            73                            A. 9295

    1    (2)  Application of credit. If the amount of the credit and carryovers
    2  of such credit allowed under this subsection for any taxable year  shall
    3  exceed the taxpayer's tax for such year, the excess, as well as any part
    4  of the credit or carryovers of such credit, or both, may be carried over
    5  to  the  ten  taxable  years next following such taxable year and may be
    6  deducted from the taxpayer's tax for such year or years.
    7    § 6. Section 1456 of the tax law is amended by adding a new subsection
    8  (k) to read as follows:
    9    (k) Credit for increased urban employment outside of the  metropolitan
   10  commuter  transportation  district.  (1) Allowance of credit. A taxpayer
   11  shall be allowed a credit, to be computed as provided in section  seven-
   12  teen of this chapter, against the tax imposed by this article.
   13    (2)  Application  of  credit. The credit and carryovers of such credit
   14  allowed under this subsection for any taxable year  shall  not,  in  the
   15  aggregate, reduce the tax due for such year to less than the minimum tax
   16  fixed  by  subsection (b) of section fourteen hundred fifty-five of this
   17  article. However, if the amount of credit or carryovers of such  credit,
   18  or  both, allowed under this subsection for any taxable year reduces the
   19  tax to such amount, then any amount of  credit  or  carryovers  of  such
   20  credit  thus  not deductible in such taxable year may be carried over to
   21  the ten taxable years next  following  such  taxable  year  and  may  be
   22  deducted from the taxpayer's tax for such year or years.
   23    §  7. Subdivision (m) of section 1511 of the tax law, as relettered by
   24  section 5 of part J of chapter 407 of the laws of  1999,  is  relettered
   25  subdivision (r) and a new subdivision (m) is added to read as follows:
   26    (m)  Credit for increased urban employment outside of the metropolitan
   27  commuter transportation district. (1) Allowance of  credit.  A  taxpayer
   28  shall  be allowed a credit, to be computed as provided in section seven-
   29  teen of this chapter, against the taxes imposed by this article.
   30    (2) Application of credit. The credit and carryovers  of  such  credit
   31  allowed  under  this  subdivision for any taxable year shall not, in the
   32  aggregate, reduce the tax due for such year to less than the minimum tax
   33  fixed by paragraph four of subdivision (a) of  section  fifteen  hundred
   34  two  of  this article. However, if the amount of credit or carryovers of
   35  such credit, or both, allowed under this  subdivision  for  any  taxable
   36  year reduces the tax to such amount, then any amount of credit or carry-
   37  overs  of  such  credit  thus not deductible in such taxable year may be
   38  carried over to the ten taxable years next following such  taxable  year
   39  and may be deducted from the taxpayer's tax for such year or years.
   40    § 8. This act shall take effect immediately and shall apply to taxable
   41  years beginning on or after January 1, 2002.

   42                                   PART I

   43    Section  1.  Section  3  of  part X of chapter 407 of the laws of 1999
   44  amending the tax law and other laws relating to tax reductions and other
   45  provisions to implement the 1999-2000 state fiscal plan, is  amended  to
   46  read as follows:
   47    § 3. This act shall take effect [March 1, 2001] January 1, 2000.
   48    § 2. Severability clause. If any clause, sentence, paragraph, subdivi-
   49  sion,  section  or  part  of  this act shall be adjudged by any court of
   50  competent jurisdiction to be invalid, such judgment  shall  not  affect,
   51  impair or invalidate the remainder thereof, but shall be confined in its
   52  operation  to  the  clause, sentence, paragraph, subdivision, section or
   53  part thereof directly involved in the controversy in which such judgment
   54  shall have been rendered. Provided, more specifically, if the  exemption

       S. 6295                            74                            A. 9295

    1  from  tax  contained  in subdivision 6 of section 424 of the tax law, as
    2  the effective date of the 1999 amendment thereof is amended  by  section
    3  one  of  this  act, shall be declared unconstitutional, such judgment of
    4  invalidity shall not result in the extension of the exemption to anyone,
    5  including  out-of-state  distributors  who are brewers, but shall, as of
    6  the date such judicial decision becomes final and no longer  subject  to
    7  judicial  review,  result  only  in  the denial of such exemption to all
    8  distributors who are brewers.
    9    § 3. This act shall take effect immediately.

   10                                   PART J

   11    Section 1. Subdivision (a) of section 1115 of the tax law  is  amended
   12  by adding a new paragraph 37 to read as follows:
   13    (37)  (i)  Machinery,  equipment  and other tangible personal property
   14  specified herein, sold to a person operating  an  internet  data  center
   15  located in this state for use in such a center, where such property: (A)
   16  will  be  located  or  installed  in a facility or structure which is an
   17  internet data center and (B) is necessary for and  directly  related  to
   18  the  provision  of internet website services for sale by the operator of
   19  the center. Such property shall include computer system hardware includ-
   20  ing servers and routers, computer software, storage racks and cages  for
   21  computer  equipment,  interior  fiber  optic and copper cables, property
   22  necessary to maintain the appropriate climate controlled environment for
   23  the property in the internet data center such as air filtration and  air
   24  conditioning  equipment  and  vapor  barriers,  property related to fire
   25  control such as fire suppression equipment and alarms, power generators,
   26  power conditioners, property related to providing a  secure  environment
   27  such  as  protective  barriers,  property  which  when installed in such
   28  facility or structure will constitute raised flooring and other  similar
   29  property.  For  purposes  of  this paragraph the operator of an internet
   30  data center is a person (A) operating a facility  which  consists  of  a
   31  data  center  specifically  designed  and  constructed to provide a high
   32  security environment for the location of servers and  similar  equipment
   33  on  which  reside  internet websites; and (B) providing at such facility
   34  the internet website services of: (I) uninterrupted internet  access  to
   35  its  customers'  web  pages  in a secure environment and (II) continuous
   36  internet traffic management for its customers' web pages.
   37    (ii) For purposes of this paragraph, an operator of an  internet  data
   38  center,  primarily  engaged  in  the  sale  from such center of internet
   39  access services exempt from tax under subdivision (v) of  this  section,
   40  is  not  providing internet website services for sale. Primarily engaged
   41  shall mean that more than fifty percent of the use of all the machinery,
   42  equipment and other specified property in any such center,  which  would
   43  otherwise  be  exempt under this paragraph, is for the rendition of such
   44  internet access services.
   45    (iii) Receipts from the retail sale of the tangible personal  property
   46  exempt pursuant to subparagraph (i) of this paragraph if purchased by an
   47  operator of an internet data center, shall be exempt when purchased by a
   48  contractor,  subcontractor  or  repairman  for  use as described in such
   49  subparagraph (i), where such property is to become a capital improvement
   50  to real property.
   51    (iv) In order to receive the exemption provided for under  this  para-
   52  graph  or  subdivision (y) of this section, the operator of the internet
   53  data center or the contractor, subcontractor or repairman shall  furnish
   54  to  the  vendor of the exempt property or services a certificate in such

       S. 6295                            75                            A. 9295

    1  form and containing such information as may be prescribed by the commis-
    2  sioner.
    3    §  2.  Section 1115 of the tax law is amended by adding a new subdivi-
    4  sion (y) to read as follows:
    5    (y) Services otherwise taxable under paragraph three, five or eight of
    6  subdivision (c) of section eleven hundred five or under  section  eleven
    7  hundred  ten of this article shall be exempt from any tax imposed pursu-
    8  ant to such provisions where such services are rendered directly  to  or
    9  in  relation to the property exempt from tax pursuant to paragraph thir-
   10  ty-seven of subdivision (a) of this section, provided however where  any
   11  such  services are rendered to property or in relation to property which
   12  was in part not exempt under such paragraph  thirty-seven,  the  commis-
   13  sioner  shall  provide for a method of allocation to exempt a portion of
   14  such services.
   15    § 3. This act shall take effect March 1, 2001 and shall apply to sales
   16  made and uses occurring on and after such date, although made or  occur-
   17  ring under a prior contract.

   18                                   PART K

   19    Section  1.  The public housing law is amended by adding a new article
   20  2-A to read as follows:
   21                                 ARTICLE 2-A
   22            NEW YORK STATE LOW INCOME HOUSING TAX CREDIT PROGRAM
   23  Section 21. Definitions.
   24          22. Allowance of credit, amount and limitations.
   25          23. Project monitoring.
   26          24. Credit recapture.
   27          25. Regulations, coordination with  federal  low-income  housing
   28                credit provisions.
   29    §  21. Definitions. 1. (a) "Applicable percentage" means the appropri-
   30  ate percentage (depending on whether a building  is  new,  existing,  or
   31  federally  subsidized)  prescribed  by the secretary of the treasury for
   32  purposes of section 42 of the internal revenue code for the month  which
   33  is the earlier of
   34    (i)  the  month in which the eligible low-income building is placed in
   35  service, or
   36    (ii) at the election of the taxpayer,
   37    (A) the month in which the taxpayer and the commissioner enter into an
   38  agreement with respect to such building (which is binding on the commis-
   39  sioner, the taxpayer, and all successors in interest) as to the  housing
   40  credit dollar amount to be allocated to such building, or
   41    (B)  in the case of any building to which subsection (h)(4)(B) of such
   42  section 42 applies, the month in which the  tax-exempt  obligations  are
   43  issued.
   44    (b) A month may be elected under subparagraph (ii) of paragraph (a) of
   45  this  subdivision  only if the election is made not later than the fifth
   46  day after the close of such month. Such election, once  made,  shall  be
   47  irrevocable.
   48    (c)  If, as of the close of any taxable year in the credit period, the
   49  qualified basis of an eligible low-income building exceeds such basis as
   50  of the close of the first year of  the  credit  period,  the  applicable
   51  percentage  which  shall apply to such excess shall be two-thirds of the
   52  applicable percentage originally ascribed to such building.

       S. 6295                            76                            A. 9295

    1    2. "Compliance period" means, with respect to any building, the period
    2  of fifteen taxable years beginning with the first taxable  year  of  the
    3  credit period with respect to such building.
    4    3.  "Credit  period"  means,  with  respect to any eligible low-income
    5  building, the period of ten taxable years beginning with
    6    (a) the taxable year in which the building is placed in service, or
    7    (b) at the election of the taxpayer, the succeeding taxable year,
    8  but only if the building is an eligible low-income building  as  of  the
    9  close of the first year of such period. The election under paragraph (b)
   10  of this subdivision, once made, shall be irrevocable.
   11    4. "Eligibility statement" means a statement issued by the commission-
   12  er  certifying  that a building is an eligible low-income building. Such
   13  statement shall set forth the taxable year in  which  such  building  is
   14  placed  in service, the dollar amount of low-income housing credit allo-
   15  cated by the commissioner to such building as  provided  in  subdivision
   16  five  of  section  twenty-two of this article, the applicable percentage
   17  and maximum qualified basis with respect to  such  building  taken  into
   18  account  in  determining  such  dollar amount, sufficient information to
   19  identify each such building and the taxpayer or taxpayers  with  respect
   20  to  each  such building, and such other information as the commissioner,
   21  in consultation with the commissioner of  taxation  and  finance,  shall
   22  prescribe.  Such  statement shall be first issued following the close of
   23  the first taxable year in the credit  period,  and  thereafter,  to  the
   24  extent  required  by the commissioner of taxation and finance, following
   25  the close of each taxable year of the compliance period.
   26    5. "Eligible low-income building" means a  building  located  in  this
   27  state which either
   28    (a)  is a qualified low-income building as defined in section 42(c) of
   29  the internal revenue code, or
   30    (b) would be a qualified low-income building under such section if the
   31  40-60 test specified in subsection (g)(1) of such  section  were  disre-
   32  garded  and  the 20-50 test specified in such subsection (requiring that
   33  at least twenty percent of residential units be both rent-restricted and
   34  occupied by individuals whose income is fifty percent or  less  of  area
   35  median gross income) were a 20-90 test.
   36    6.  "Qualified  basis"  of  an  eligible low-income building means the
   37  qualified basis of such building determined under section 42(c)  of  the
   38  internal  revenue  code, or which would be determined under such section
   39  if the 20-90 test specified in paragraph (b) of subdivision five of this
   40  section applied under such section 42 to determine if such building were
   41  part of a qualified low-income housing project.
   42    7. References in this article to section 42 of  the  internal  revenue
   43  code shall mean such section as amended from time to time.
   44    §  22.  Allowance  of  credit,  amount  and limitations. 1. A taxpayer
   45  subject to tax under article nine-A, twenty-two, thirty-two  or  thirty-
   46  three  of  the  tax  law  which owns an interest in one or more eligible
   47  low-income buildings shall be allowed a credit against such tax for  the
   48  amount  of  low-income  housing  credit allocated by the commissioner to
   49  each such building. Except  as  provided  in  subdivision  two  of  this
   50  section,  the  credit  amount  so allocated shall be allowed as a credit
   51  against the tax for the ten taxable years in the credit period.
   52    2. Adjustment of first-year credit allowed in eleventh year. The cred-
   53  it allowable for the first  taxable  year  of  the  credit  period  with
   54  respect  to  any  building  shall be adjusted using the rules of section
   55  42(f)(2) of the internal revenue code (relating to first-year adjustment
   56  of qualified basis by the weighted average of low-income to total  resi-

       S. 6295                            77                            A. 9295

    1  dential units), and any reduction in first-year credit by reason of such
    2  adjustment  shall  be allowable for the first taxable year following the
    3  credit period.
    4    3.  Amount of credit. Except as provided in subdivisions four and five
    5  of this section, the amount of low-income housing credit  shall  be  the
    6  applicable percentage of the qualified basis of each eligible low-income
    7  building.
    8    4.  Statewide  limitation. The aggregate dollar amount of credit which
    9  the commissioner may allocate to  eligible  low-income  buildings  under
   10  this  article  shall  be two million dollars. The limitation provided by
   11  this subdivision applies only to  allocation  of  the  aggregate  dollar
   12  amount of credit by the commissioner, and does not apply to allowance to
   13  a taxpayer of the credit with respect to an eligible low-income building
   14  for each year of the credit period.
   15    5.  Building  limitation. The dollar amount of credit allocated to any
   16  building shall not exceed the  amount  the  commissioner  determines  is
   17  necessary for the financial feasibility of the project and the viability
   18  of the building as an eligible low-income building throughout the credit
   19  period.  In  allocating  a  dollar amount of credit to any building, the
   20  commissioner shall specify the applicable  percentage  and  the  maximum
   21  qualified  basis which may be taken into account under this article with
   22  respect to such building. The  applicable  percentage  and  the  maximum
   23  qualified  basis with respect to a building shall not exceed the amounts
   24  determined in subdivisions one and six, respectively, of  section  twen-
   25  ty-one of this article.
   26    6.  Long-term  commitment  to  low-income  housing required. No credit
   27  shall be allowed under this article with respect to a building  for  the
   28  taxable  year  unless  an  extended  low-income housing commitment is in
   29  effect as of the end of such taxable year. For purposes of this subdivi-
   30  sion, the term "extended low-income housing commitment" means an  agree-
   31  ment  between the taxpayer and the commissioner substantially similar to
   32  the agreement specified in section 42(h)(6)(B) of the  internal  revenue
   33  code.
   34    7. Credit to successor owner. If a credit is allowed under subdivision
   35  one  of this section with respect to an eligible low-income building and
   36  such building (or an interest therein) is sold during the credit period,
   37  the credit for the period after the sale which would have been allowable
   38  under such subdivision one to the prior owner had the building not  been
   39  sold  shall  be  allowable to the new owner. Credit for the year of sale
   40  shall be allocated between the parties on the basis  of  the  number  of
   41  days during such year that the building or interest was held by each.
   42    § 23. Project monitoring. The commissioner shall establish such proce-
   43  dures  as  he  deems  necessary for monitoring compliance of an eligible
   44  low-income building with the provisions of this article, and for notify-
   45  ing the commissioner of taxation and finance of any  such  noncompliance
   46  of which he becomes aware.
   47    § 24. Credit recapture. If, as of the close of any taxable year in the
   48  compliance  period,  the  amount  of the qualified basis of any building
   49  with respect to the taxpayer is less than the amount of such basis as of
   50  the close of the preceding taxable year, the credit under  this  article
   51  may be recaptured as provided in section eighteen of the tax law.
   52    § 25. Regulations, coordination with federal low-income housing credit
   53  provisions.  1.  The commissioner shall promulgate rules and regulations
   54  necessary to administer the provisions of this act.
   55    2. The provisions of section 42 of the  internal  revenue  code  shall
   56  apply  to the credit under this article, provided however, to the extent

       S. 6295                            78                            A. 9295

    1  such provisions are inconsistent with this article,  the  provisions  of
    2  this article shall control.
    3    §  2.  The  tax  law  is amended by adding a new section 18 to read as
    4  follows:
    5    § 18. Low-income housing credit. (a) Allowance of credit.  A  taxpayer
    6  subject  to  tax under article nine-A, twenty-two, thirty-two or thirty-
    7  three of this chapter shall be allowed a credit against such tax, pursu-
    8  ant to the provisions referenced in subdivision  (d)  of  this  section,
    9  with respect to the ownership of eligible low-income buildings for which
   10  an  eligibility statement has been issued by the commissioner of housing
   11  and community renewal. The amount of the  credit  shall  be  the  credit
   12  amount for each such building allocated by such commissioner as provided
   13  in  article  two-A of the public housing law. The credit amount shall be
   14  allowed for each of the ten taxable years in the credit period, and  any
   15  reduction in first-year credit as provided in subdivision two of section
   16  twenty-two of such law shall be allowed in the eleventh taxable year.
   17    (b) Credit recapture. (1) General. If,
   18    (A)  as of the close of any taxable year in the compliance period, the
   19  amount of the qualified basis  of  any  building  with  respect  to  the
   20  taxpayer is less than
   21    (B)  the amount of such basis as of the close of the preceding taxable
   22  year,
   23    (C) then the credit recapture amount must be added back for the  taxa-
   24  ble year.
   25    (2)  Credit recapture amount. The credit recapture amount is an amount
   26  equal to the sum of
   27    (A) the aggregate decrease in the  credits  allowed  to  the  taxpayer
   28  under this section for all prior taxable years which would have resulted
   29  if  the  accelerated  portion  of the credit allowable by reason of this
   30  section were not allowed for all prior taxable years with respect to the
   31  excess of the amount described in subparagraph (B) of paragraph  (1)  of
   32  this  subdivision  over the amount described in subparagraph (A) of such
   33  paragraph, plus
   34    (B) interest at the overpayment rate  established  under  section  one
   35  thousand  ninety-six  of  this  chapter  on  the amount determined under
   36  subparagraph (A) of this paragraph for each prior taxable year  for  the
   37  period  beginning  on  the  due date for filing the report for the prior
   38  taxable year involved.
   39    (3) Accelerated portion of credit. For purposes of  paragraph  two  of
   40  this  subdivision,  the  accelerated portion of the credit for the prior
   41  taxable years with respect to any amount of basis is the excess of
   42    (A) the aggregate credit allowed by reason of  this  section  (without
   43  regard  to  this subdivision) for such years with respect to such basis,
   44  over
   45    (B) the aggregate credit which would be allowable by  reason  of  this
   46  section for such years with respect to such basis if the aggregate cred-
   47  it  which  would  (but  for  this subdivision) have been allowed for the
   48  entire compliance period were allowable ratably over fifteen years.
   49    (4) Special rules. For purposes of  this  subdivision,  the  rules  of
   50  section 42 (j)(4)(B) and (C) of the internal revenue code shall apply in
   51  determining the credit recapture amount.
   52    (5)  Exceptions  to  recapture. Recapture under this subdivision shall
   53  not apply to a reduction in qualified basis
   54    (A) by reason of a casualty loss, if the commissioner, in consultation
   55  with the commissioner of housing and community renewal, determines  that

       S. 6295                            79                            A. 9295

    1  such  loss is restored by reconstruction or replacement within a reason-
    2  able period, or
    3    (B)  by  reason of a change in floor space devoted to low-income units
    4  in a building, if such building remains an eligible low-income  building
    5  after  such  change,  and  if the commissioner, in consultation with the
    6  commissioner of housing and  community  renewal,  determines  that  such
    7  change is de minimis, or
    8    (C)  by reason of error in complying with low-income eligibility tests
    9  referred to in subdivision five of  section  twenty-one  of  the  public
   10  housing  law, if the commissioner, in consultation with the commissioner
   11  of housing and community renewal,  determines  that  such  error  is  de
   12  minimis.
   13    (6)  Recapture  by partners of a partnership. In the case of ownership
   14  of a building or interest therein by a partnership which has thirty-five
   15  or more partners, the provisions of section  42(j)(5)  of  the  internal
   16  revenue  code shall apply to any recapture under this subdivision unless
   17  the partnership elects not to have such provisions apply.
   18    (7) Bond in lieu of recapture. In the  case  of  a  disposition  of  a
   19  building  or  an interest therein, the taxpayer shall be discharged from
   20  liability for any recapture under this subdivision  by  reason  of  such
   21  disposition  if  the  taxpayer  furnishes  to the commissioner a bond or
   22  other security acceptable to the commissioner in an amount  satisfactory
   23  to the commissioner and for the period required by the commissioner, and
   24  it  is  reasonably expected that such building will continue to be oper-
   25  ated as an eligible low-income building  for  the  remaining  compliance
   26  period with respect to such building.
   27    (c)  Construction with public housing law; definitions. The provisions
   28  of this section shall be construed in conjunction with the provisions of
   29  article two-A of the public housing law. For definitions relating to the
   30  low-income housing credit, see section twenty-one of such law.
   31    (d) Cross-references. For application of the credit  provided  for  in
   32  this section, see the following provisions of this chapter:
   33    (1) Article 9-A: Section 210: subdivision 30,
   34    (2) Article 22: Section 606: subsections (i) and (x),
   35    (3) Article 32: Section 1456: subsection (l),
   36    (4) Article 33: Section 1511: subdivision (n).
   37    §  3.   Section 210 of the tax law is amended by adding a new subdivi-
   38  sion 30 to read as follows:
   39    30. Low-income housing credit. (a) Allowance  of  credit.  A  taxpayer
   40  shall  be  allowed a credit against the tax imposed by this article with
   41  respect to the ownership of eligible low-income buildings,  computed  as
   42  provided in section eighteen of this chapter.
   43    (b)  Application  of  credit. The credit and carryovers of such credit
   44  allowed under this subdivision for any taxable year shall  not,  in  the
   45  aggregate,  reduce  the tax due for such year to less than the higher of
   46  the amounts prescribed in paragraphs (c) and (d) of subdivision  one  of
   47  this  section.  However,  if  the amount of credit or carryovers or such
   48  credit, or both, allowed under this subdivision  for  any  taxable  year
   49  reduces  the  tax  to such amount, any amount of credit or carryovers of
   50  such credit thus not deductible in such taxable year may be carried over
   51  to the following year or years and may be deducted from the tax for such
   52  year or years.
   53    (c) Credit recapture. For provisions requiring  recapture  of  credit,
   54  see subdivision (b) of section eighteen of this chapter.

       S. 6295                            80                            A. 9295

    1    §  4.  Paragraph 1 of subsection (i) of section 606 of the tax law, as
    2  amended by section 2 of part J of chapter 407 of the laws  of  1999,  is
    3  amended to read as follows:
    4    (1)  For purposes of determining the application under this section of
    5  the credit provisions enumerated in the following table,  a  shareholder
    6  of a New York S corporation:
    7    (A)  shall  be  treated as the taxpayer with respect to his or her pro
    8  rata share of the corresponding credit base of such corporation,  deter-
    9  mined  for  the  corporation's  taxable  year  ending with or within the
   10  shareholder's taxable year and
   11    (B) shall be treated as the owner of a new business  with  respect  to
   12  such  share  if  the corporation qualifies as a new business pursuant to
   13  paragraph (j) of subdivision twelve of section two hundred ten  of  this
   14  chapter,  unless  the  shareholder  has  previously received a refund by
   15  reason of the application of this subparagraph, or this subsection as it
   16  was in effect for taxable years beginning before nineteen hundred  nine-
   17  ty-four.

   18                                          The corporation's
   19  With respect to the                     credit base under
   20  following credit                        section two hundred ten
   21  under this section:                     or section fourteen
   22                                          hundred fifty-six of this
   23                                          chapter is:

   24  Investment tax credit                   Investment credit base
   25  under subsection (a)                    or qualified
   26                                          rehabilitation
   27                                          expenditures under
   28                                          subdivision twelve of
   29                                          section two hundred ten

   30  Economic development                    Cost or other basis
   31  zone investment tax credit              under subdivision
   32  under subsection (j)                    twelve-B
   33                                          of section two hundred
   34                                          ten

   35  Economic development                    Eligible wages under
   36  zone wage tax credit                    subdivision nineteen of
   37  under subsection (k)                    section two hundred ten
   38                                          or subsection (e) of
   39                                          section fourteen hundred
   40                                          fifty-six

   41  Economic development zone               Qualified investments
   42  capital tax credit                      and contributions under
   43  under subsection (1)                    subdivision twenty of
   44                                          section two hundred ten
   45                                          or subsection (d) of
   46                                          section fourteen hundred
   47                                          fifty-six

   48  Agricultural property tax               Allowable school
   49  credit under subsection (n)             district property taxes under
   50                                          subdivision twenty-two of

       S. 6295                            81                            A. 9295

    1                                          section two hundred ten

    2  Credit for employment                   Qualified first-year wages or
    3  of persons with dis-                    qualified second-year wages
    4  abilities under                         under subdivision twenty-three
    5  subsection (o)                          of section two hundred ten or
    6                                          subsection (f) of section
    7                                          fourteen hundred fifty-six

    8  Employment incentive                    Applicable investment credit
    9  credit under subsection                 base under subdivision
   10  (a-1)                                   twelve-D

   11  Economic development                    Applicable investment
   12  zone employment incentive               credit under subdivision
   13  credit under subsection (j-1)           twelve-C

   14  Alternative fuels credit                Cost under subdivision
   15  under subsection (p)                    twenty-four

   16  Qualified emerging technology           Applicable credit base under
   17  company employment credit               subdivision twelve-E of
   18  subsection (q)                          section two hundred ten

   19  Qualified emerging technology company   Qualified investments under
   20  capital tax credit under                subdivision twelve-F of
   21  subsection (r)                          section two hundred ten

   22  Credit for purchase of an               Cost of an automated external
   23  automated external                      defibrillator under
   24  defibrillator under                     subdivision twenty-five of
   25  subsection (s)                          section two hundred ten or
   26                                          subsection (j) of section
   27                                          fourteen hundred fifty-six

   28  Low-income housing                      Credit amount under
   29  credit under subsection (x)             subdivision thirty
   30                                          of section two hundred ten or
   31                                          subsection (l) of section
   32                                          fourteen hundred fifty-six
   33    §  5. Section 606 of the tax law is amended by adding a new subsection
   34  (x) to read as follows:
   35    (x) Low-income housing credit. (1) Allowance  of  credit.  A  taxpayer
   36  shall  be  allowed a credit against the tax imposed by this article with
   37  respect to the ownership of eligible low-income buildings,  computed  as
   38  provided in section eighteen of this chapter.
   39    (2)  Application  of  credit.  If the amount of credit allowable under
   40  this subsection for any taxable year shall exceed the taxpayer's tax for
   41  such year, the excess may be carried  over  to  the  following  year  or
   42  years,  and  may  be  deducted  from the taxpayer's tax for such year or
   43  years.
   44    (3) Credit recapture. For provisions requiring  recapture  of  credit,
   45  see subdivision (b) of section eighteen of this chapter.
   46    § 6. Section 1456 of the tax law is amended by adding a new subsection
   47  (l) to read as follows:

       S. 6295                            82                            A. 9295

    1    (l)  Low-income  housing  credit. (1) Allowance of credit.  A taxpayer
    2  shall be allowed a credit against the tax imposed by this  article  with
    3  respect  to  the ownership of eligible low-income buildings, computed as
    4  provided in section eighteen of this chapter.
    5    (2)  Application  of  credit. The credit and carryovers of such credit
    6  allowed under this subsection for any taxable year  shall  not,  in  the
    7  aggregate, reduce the tax due for such year to less than the minimum tax
    8  fixed  by  subsection (b) of section fourteen hundred fifty-five of this
    9  article. However, if the amount of credit or carryovers of such  credit,
   10  or  both, allowed under this subsection for any taxable year reduces the
   11  tax to such amount, then any amount of  credit  or  carryovers  of  such
   12  credit  thus  not deductible in such taxable year may be carried over to
   13  the following year or years and may be deducted from the taxpayer's  tax
   14  for such year or years.
   15    (3)  Credit  recapture.  For provisions requiring recapture of credit,
   16  see subdivision (b) of section eighteen of this chapter.
   17    § 7. Section 1511 of the tax law is amended by adding a  new  subdivi-
   18  sion (n) to read as follows:
   19    (n)  Low-income  housing  credit.  (1) Allowance of credit. A taxpayer
   20  shall be allowed a credit against the tax imposed by this  article  with
   21  respect  to  the ownership of eligible low-income buildings, computed as
   22  provided in section eighteen of this chapter.
   23    (2) Application of credit. The credit and carryovers  of  such  credit
   24  allowed  under  this  subdivision for any taxable year shall not, in the
   25  aggregate, reduce the tax due for such year to less than the minimum tax
   26  fixed by paragraph four of subdivision (a) of  section  fifteen  hundred
   27  two  of  this article. However, if the amount of credit or carryovers of
   28  such credit, or both, allowed under this  subdivision  for  any  taxable
   29  year reduces the tax to such amount, then any amount of credit or carry-
   30  overs  of  such  credit  thus not deductible in such taxable year may be
   31  carried over to the following year or years and may be deducted from the
   32  taxpayer's tax for such year or years.
   33    (3) Credit recapture. For provisions requiring  recapture  of  credit,
   34  see subdivision (b) of section eighteen of this chapter.
   35    § 8. This act shall take effect immediately.

   36                                   PART L

   37    Section  1.  Paragraph (e) of subdivision 12 of section 210 of the tax
   38  law, as amended by section 9 of part M of chapter 407  of  the  laws  of
   39  1999, is amended to read as follows:
   40    (e)  (1)  Except  as  otherwise provided in this paragraph, the credit
   41  allowed under this subdivision for any taxable year shall not reduce the
   42  tax due for such year to less than the higher of the amounts  prescribed
   43  in  paragraphs  (c) and (d) of subdivision one of this section. However,
   44  if the amount of credit allowable under this subdivision for any taxable
   45  year reduces the tax to such amount, any amount of credit allowed for  a
   46  taxable  year commencing prior to January first, nineteen hundred eight-
   47  y-seven and not deductible in such taxable year may be carried  over  to
   48  the  following year or years and may be deducted from the taxpayer's tax
   49  for such year or years but in no event shall such credit be carried over
   50  to taxable years commencing on or after January first, two thousand two,
   51  and any amount of credit allowed for a taxable  year  commencing  on  or
   52  after January first, nineteen hundred eighty-seven and not deductible in
   53  such  year may be carried over to the fifteen taxable years next follow-
   54  ing such taxable year and may be deducted from the  taxpayer's  tax  for

       S. 6295                            83                            A. 9295

    1  such  year  or years. In lieu of such carryover, any such taxpayer which
    2  qualifies as a new business under paragraph (j) of this subdivision  may
    3  elect  to treat the amount of such carryover as an overpayment of tax to
    4  be credited or refunded in accordance with the provisions of section ten
    5  hundred eighty-six of this chapter, provided, however, the provisions of
    6  subsection  (c)  of  section  ten  hundred  eighty-eight of this chapter
    7  notwithstanding, no interest shall be paid thereon.
    8    (2)(i) Notwithstanding the provisions  of  subparagraph  one  of  this
    9  paragraph,  a  biotechnology  company, as such term is defined in clause
   10  (ii) of this subparagraph, which does not  qualify  as  a  new  business
   11  under  paragraph  (j) of this subdivision, may elect to treat the amount
   12  of such carryover referred to in subparagraph one of this  paragraph  as
   13  an  overpayment of tax to be credited or refunded in accordance with the
   14  provisions of section ten hundred eighty-six of this chapter.  Provided,
   15  however,  no  interest shall be paid on such refund, notwithstanding the
   16  provisions of subsection (c) of section ten hundred eighty-eight of this
   17  chapter.
   18    (ii) For purposes of this subparagraph, the term "biotechnology compa-
   19  ny" means a taxpayer satisfying the requirements set forth in items (A),
   20  (B) and (C) of this clause.
   21    (A) Such taxpayer is primarily engaged in  the  business  of  applying
   22  technologies,  such as recombinant DNA techniques, biochemistry, molecu-
   23  lar and cellular biology, genetics and genetic  engineering,  biological
   24  cell fusion techniques, and new bioprocesses, using living organisms, or
   25  parts  of organisms, to produce or modify products, to improve plants or
   26  animals, to  develop  microorganisms  for  specific  uses,  to  identify
   27  targets  for  pharmaceutical  development,  or  to  transform biological
   28  systems into useful processes and products or to develop  microorganisms
   29  for specific uses.
   30    (B)  Over  fifty  percent  of the voting stock of such taxpayer is not
   31  owned or controlled, directly or indirectly, by a single corporation,  a
   32  single  partnership  or a single limited liability company. For purposes
   33  of this item, voting stock means shares of stock entitling  the  holders
   34  thereof to vote for the election of directors or trustees.
   35    (C)  The  average number of employees within the state, except general
   36  executive officers, of such taxpayer during the taxable year  for  which
   37  such  refund  or  credit  of such carryover is claimed is one hundred or
   38  fewer. For purposes of this item, such  average  shall  be  computed  by
   39  ascertaining  the  number  of employees within the state, except general
   40  executive officers, employed by the taxpayer on the thirty-first day  of
   41  March, the thirtieth day of June, the thirtieth day of September and the
   42  thirty-first  day  of  December in such taxable year, by adding together
   43  the number of employees ascertained on each of such dates  and  dividing
   44  the sum so obtained by the number of such abovementioned dates occurring
   45  within such taxable year. For purposes of this item, the term "employees
   46  within the state, except general executive officers" shall have the same
   47  meaning  as it has in subparagraph three of paragraph (a) of subdivision
   48  three of this section.
   49    § 2. This act shall take effect immediately and apply to taxable years
   50  beginning on or after January 1, 2001.

   51                                   PART M

   52    Section 1. Declaration of policy and statement of purposes.  It is the
   53  policy of New York state to encourage the  construction,  rehabilitation
   54  and maintenance of buildings in this state in such a manner as to:

       S. 6295                            84                            A. 9295

    1    1.  promote better environmental standards for the construction, reha-
    2  bilitation and maintenance of buildings in the state;
    3    2. improve energy efficiency and increase generation of energy through
    4  renewable and clean energy technologies;
    5    3. increase the demand for environmentally preferable building materi-
    6  als, finishes and furnishings;
    7    4.  improve  the environment by decreasing the discharge of pollutants
    8  from buildings;
    9    5. create industry and public awareness of new technologies  that  can
   10  improve the quality of life for building occupants; and
   11    6. improve the health and productivity of building occupants.
   12    In  order to facilitate the foregoing policies, the legislature hereby
   13  creates a franchise and income tax credit to promote  the  construction,
   14  rehabilitation  and  maintenance of buildings that meet the criteria set
   15  forth in this act.
   16    § 2.  The tax law is amended by adding a new section  19  to  read  as
   17  follows:
   18    §  19.  Green building credit.   (a) Allowance of credit. (1) General.
   19  (A) Green building credit. A taxpayer subject to tax under article nine,
   20  nine-A, twenty-two, thirty-two or thirty-three of this chapter shall  be
   21  allowed  a  green  building  credit  against  such  tax, pursuant to the
   22  provisions referenced in subdivision  (f)  of  this  section.  Provided,
   23  however,  no  credit  shall  be  allowed  under  this section unless the
   24  taxpayer has complied with the applicable requirements of paragraph  two
   25  of  subdivision  (d)  of  this section (relating to reports to DEC). The
   26  amount of the credit shall be the sum of the credit components specified
   27  in paragraphs two through seven of this subdivision.  Provided, however,
   28  the amount of each such credit component shall not exceed the limit  set
   29  forth  in  the initial credit component certificate obtained pursuant to
   30  subdivision (c) of this section.  In the determination  of  such  credit
   31  components,  no cost paid or incurred by the taxpayer shall be the basis
   32  for more than one such component.
   33    (B) Credit to successor owner. If a credit is allowed  to  a  building
   34  owner  pursuant  to  this subdivision with respect to property, and such
   35  property (or an interest therein) is sold, the  credit  for  the  period
   36  after the sale which would have been allowable under this subdivision to
   37  the prior owner had the property not been sold shall be allowable to the
   38  new  owner.   Credit for the year of sale shall be allocated between the
   39  parties on the basis of the number of days during  such  year  that  the
   40  property or interest was held by each.
   41    (C)  Credit  to  successor  tenant. If a credit is allowed to a tenant
   42  pursuant to this subdivision with  respect  to  property,  and  if  such
   43  tenancy  is  terminated but such property remains in use in the building
   44  by a successor tenant, the credit for the period after such  termination
   45  which  would  have  been  allowable  under this subdivision to the prior
   46  tenant had the tenancy not been terminated shall  be  allowable  to  the
   47  successor  tenant. Credit for the year of termination shall be allocated
   48  between the parties on the basis of the number of days during such  year
   49  that the property was used by each.
   50    (D) Notwithstanding any other provision of law to the contrary, in the
   51  case  of  allowance of credit under this section to a successor owner or
   52  tenant, as provided in subparagraph (B) or (C) of  this  paragraph,  the
   53  commissioner  shall  have the authority to reveal to the successor owner
   54  or tenant any information, with respect to the credit of the prior owner
   55  or tenant, which is the basis for the denial in whole or in part of  the
   56  credit claimed by such successor owner or tenant.

       S. 6295                            85                            A. 9295

    1    (2)  Green  whole-building  credit component. The green whole-building
    2  credit component shall be equal to  the  applicable  percentage  of  the
    3  allowable  costs  paid  or  incurred  by  the taxpayer (whether owner or
    4  tenant), for either the construction of a green building or the rehabil-
    5  itation of a building which is not a green building to be a green build-
    6  ing.  Provided, however, the credit component shall not exceed the maxi-
    7  mum  amount  specified in the initial credit component certificate.  The
    8  applicable percentage shall be 1.4 percent, except that if the  building
    9  is  located  in  an economic development area, the applicable percentage
   10  shall be 1.6 percent. The credit component amount so determined shall be
   11  allowed for the credit allowance year, but only if (A) the taxpayer  has
   12  obtained  and  filed both an initial credit component certificate and an
   13  eligibility certificate issued  pursuant  to  subdivision  (c)  of  this
   14  section, (B) a certificate of occupancy for the building has been issued
   15  and  (C) where the credit allowance year is a year described in subpara-
   16  graph (B) of paragraph two-a of subdivision (b)  of  this  section,  the
   17  green  building  or  rehabilitation remains in service during such year.
   18  Such credit component amount shall be allowed also for each of the  next
   19  four  succeeding  taxable  years  with respect to which the taxpayer has
   20  obtained and filed an eligibility certificate  pursuant  to  subdivision
   21  (c)  of  this  section.  Provided,  further, the allowable costs may not
   22  exceed, in the aggregate, one hundred fifty dollars per square foot with
   23  respect to the portion of the building which comprises the base building
   24  and seventy-five dollars per square foot with respect to the portion  of
   25  the building which comprises the tenant space.
   26    (3)  Green  base  building  credit  component. The green base building
   27  credit component shall be equal to  the  applicable  percentage  of  the
   28  allowable  costs  paid  or  incurred  by the taxpayer, if the owner, for
   29  either the construction of a green base building or  for  the  rehabili-
   30  tation  of  a  base  building which is not a green base building to be a
   31  green base building.  Provided, however, the credit component shall  not
   32  exceed  the  maximum  amount  specified  in the initial credit component
   33  certificate.  The applicable percentage shall  be  one  percent,  except
   34  that  if  the  building  is located in an economic development area, the
   35  applicable percentage shall be 1.2 percent. The credit component  amount
   36  so  determined  shall be allowed for the credit allowance year, but only
   37  if (A) the taxpayer has obtained and filed both an initial credit compo-
   38  nent certificate and  an  eligibility  certificate  issued  pursuant  to
   39  subdivision  (c) of this section, (B) a certificate of occupancy for the
   40  building has been issued and (C) where the credit allowance  year  is  a
   41  year described in subparagraph (B) of paragraph two-a of subdivision (b)
   42  of  this  section,  the  green base building or rehabilitation of a base
   43  building remains in service during such year.    Such  credit  component
   44  amount  shall be allowed also for each of the next four succeeding taxa-
   45  ble years with respect to which the taxpayer has obtained and  filed  an
   46  eligibility  certificate  pursuant  to  subdivision (c) of this section.
   47  Provided, further, the allowable costs for the  base  building  may  not
   48  exceed, in the aggregate, one hundred fifty dollars per square foot.
   49    (4) Green tenant space credit component. The green tenant space credit
   50  component shall be equal to the applicable percentage of allowable costs
   51  for  tenant improvements paid or incurred by the taxpayer (whether owner
   52  or tenant) in constructing (including completing) tenant space, or reha-
   53  bilitating tenant space which is not green  tenant  space  to  be  green
   54  tenant  space.  Provided, however, the credit component shall not exceed
   55  the maximum amount specified in the  initial  credit  component  certif-
   56  icate.    The applicable percentage shall be one percent, except that if

       S. 6295                            86                            A. 9295

    1  the building is located in an economic development area  the  applicable
    2  percentage shall be 1.2 percent. Provided, however, that the owner, or a
    3  tenant  who  occupies fewer than ten thousand square feet, shall qualify
    4  for  such green tenant space credit component only in the event that the
    5  base building is a green base building. The credit component  amount  so
    6  determined  shall  be allowed for the credit allowance year, but only if
    7  (A) the taxpayer has obtained and  filed  an  initial  credit  component
    8  certificate  and  an eligibility certificate issued pursuant to subdivi-
    9  sion (c) of this section and (B) where the credit allowance  year  is  a
   10  year described in subparagraph (B) of paragraph two-a of subdivision (b)
   11  of  this section, the construction, completion or rehabilitation remains
   12  in service during such year.   Such credit  component  amount  shall  be
   13  allowed  also  for  each  of the next four succeeding taxable years with
   14  respect to which the taxpayer has  obtained  and  filed  an  eligibility
   15  certificate  pursuant  to  subdivision  (c)  of  this section. Provided,
   16  however, the allowable costs for tenant space shall not exceed,  in  the
   17  aggregate,  seventy-five dollars per square foot. In the event that both
   18  an owner and tenant incur such costs for tenant space  with  respect  to
   19  the  same  tenant  space and such costs in the aggregate exceed seventy-
   20  five dollars per square foot, the owner shall have priority as to  costs
   21  constituting the basis for the green tenant space credit component.
   22    (5)  Fuel cell credit component. A fuel cell credit component shall be
   23  allowed for the installation of a fuel cell which is a qualifying alter-
   24  nate energy source, installed to serve  a  green  building,  green  base
   25  building or green tenant space. The amount of the credit component shall
   26  be  six  percent of the sum of the capitalized costs paid or incurred by
   27  the taxpayer with respect to each fuel  cell  installed  to  serve  such
   28  building  or space, including the cost of the foundation or platform and
   29  the labor cost associated with installation, such capitalized costs  not
   30  to exceed one thousand dollars per kilowatt of installed DC rated capac-
   31  ity.  Provided, however, the credit component shall not exceed the maxi-
   32  mum  amount  specified in the initial credit component certificate.  The
   33  fuel cell credit component amount so determined shall be allowed for the
   34  credit allowance year, but only if (A) the  taxpayer  has  obtained  and
   35  filed an initial credit component certificate and an eligibility certif-
   36  icate  issued  pursuant to subdivision (c) of this section and (B) where
   37  the credit allowance year is a year described  in  subparagraph  (B)  of
   38  paragraph  two-a  of  subdivision  (b)  of  this  section, the fuel cell
   39  remains in service during such year.  Such credit component amount shall
   40  be allowed also with respect to each of  the  four  taxable  years  next
   41  following  during  which  the  fuel  cell  remains in service. Provided,
   42  however, that the amount of any federal, state or local  grant  received
   43  by  the  taxpayer  and used for the purchase and/or installation of such
   44  fuel cell and which was not included in the federal gross income of  the
   45  taxpayer shall be subtracted from the amount of such cost.
   46    (6) Photovoltaic module credit component. A photovoltaic module credit
   47  component  shall be allowed for the installation of photovoltaic modules
   48  which constitute a qualifying alternate energy source installed to serve
   49  a green building, green base building or green tenant space. The  amount
   50  of  the credit component shall be twenty percent of the incremental cost
   51  paid or incurred by the taxpayer  for  building-integrated  photovoltaic
   52  modules  and  five percent of the cost of non-building-integrated photo-
   53  voltaic modules, in either case such cost not to exceed the  product  of
   54  (i)  three dollars and (ii) the number of watts included in the DC rated
   55  capacity of the photovoltaic modules.   Provided,  however,  the  credit
   56  component  shall  not exceed the maximum amount specified in the initial

       S. 6295                            87                            A. 9295

    1  credit component certificate.  The credit component amount so determined
    2  shall be allowed for the credit allowance year,  but  only  if  (A)  the
    3  taxpayer  has obtained and filed an initial credit component certificate
    4  and  an  eligibility  certificate  issued pursuant to subdivision (c) of
    5  this section and (B) where the credit allowance year is a year described
    6  in subparagraph (B) of  paragraph  two-a  of  subdivision  (b)  of  this
    7  section,  the  modules  remain in service during such year.  Such credit
    8  amount shall be allowed also for the four taxable years  next  following
    9  during which the modules remain in service.  Provided, however, that the
   10  amount of any federal, state or local grant received by the taxpayer and
   11  used for the purchase and/or installation of such photovoltaic equipment
   12  and  which  was not included in the federal gross income of the taxpayer
   13  shall be subtracted from the amount of such cost.
   14    (7) Non-ozone depleting refrigerant component. A  non-ozone  depleting
   15  refrigerant  component  shall be allowed for new air conditioning equip-
   16  ment (including chillers and absorption chillers, water  or  air  cooled
   17  unitary  equipment,  water-cooled  heat  pumps,  packaged  terminal heat
   18  pumps, air conditioners, and other similar air  conditioning  equipment)
   19  that  uses  an EPA-approved non-ozone depleting refrigerant installed to
   20  serve a green building, green base building or green tenant  space.  The
   21  amount  of the credit component shall be two percent of the cost of such
   22  air conditioning equipment.  Provided,  however,  the  credit  component
   23  shall  not  exceed  the  maximum  amount specified in the initial credit
   24  component certificate. The  non-ozone  depleting  refrigerant  component
   25  amount  so    determined shall be allowed for the credit allowance year,
   26  but only if (A) the taxpayer has obtained and filed  an  initial  credit
   27  component  certificate and an eligibility certificate issued pursuant to
   28  subdivision (c) of this section, and (B) where the credit allowance year
   29  is a year described in subparagraph (B) of paragraph two-a  of  subdivi-
   30  sion  (b)  of  this  section,  the air conditioning equipment remains in
   31  service. Such credit component amount shall be allowed also with respect
   32  to each of the four taxable years next following during  which  the  air
   33  conditioning equipment remains in service.
   34    (b)  Definitions.  As  used in this section, the following terms shall
   35  have the following meanings:
   36    (1) "Allowable costs" means amounts  properly  chargeable  to  capital
   37  account  (other  than  for land), which are paid or incurred on or after
   38  June first, nineteen hundred ninety-nine, for:  construction or rehabil-
   39  itation; commissioning costs;  interest  paid  or  incurred  during  the
   40  construction or rehabilitation period; legal, architectural, engineering
   41  and other professional fees allocable to construction or rehabilitation;
   42  closing  costs  for  construction,  rehabilitation  or  mortgage  loans;
   43  recording taxes and filing fees incurred with respect to construction or
   44  rehabilitation; site costs (such as temporary electric wiring, scaffold-
   45  ing, demolition costs, and fencing and security facilities);  and  costs
   46  of furniture, carpeting, partitions, walls and wall coverings, ceilings,
   47  drapes,  blinds,  lighting, plumbing, electrical wiring and ventilation;
   48  provided that such costs shall not include the cost of telephone systems
   49  and computers (other than electrical wiring costs) and shall not include
   50  the cost of fuel cells or photovoltaic modules (including  installation)
   51  or  the  cost  of  new  air conditioning equipment using an EPA-approved
   52  non-ozone depleting refrigerant (excluding installation).
   53    (2) "Base building" means all areas of a  building  not  intended  for
   54  occupancy  by a tenant or owner, including but not limited to the struc-
   55  tural components of  the  building,  exterior  walls,  floors,  windows,
   56  roofs, foundations, chimneys and stacks, parking areas, mechanical rooms

       S. 6295                            88                            A. 9295

    1  and  mechanical  systems,  and  owner-controlled and/or operated service
    2  spaces, sidewalks, main lobby, shafts and vertical transportation  mech-
    3  anisms, stairways and corridors.
    4    (2-a)  "Credit allowance year" means the later of (A) the taxable year
    5  during which the property, construction,  completion  or  rehabilitation
    6  referred  to  in paragraphs two through seven of subdivision (a) of this
    7  section has been placed in service or (B) the first  taxable  year  with
    8  respect to which the credit may be claimed pursuant to the initial cred-
    9  it  component  certificate  issued  pursuant  to subdivision (c) of this
   10  section.
   11    (3) "Commissioning" means the testing and fine-tuning of heat,  venti-
   12  lating and air conditioning and other systems to assure proper function-
   13  ing and adherence to design criteria and the preparation of system oper-
   14  ation manuals and instruction of maintenance personnel.
   15    (4) "DEC" means the New York state department of environmental conser-
   16  vation. "DOH" means the New York state department of health. "EPA" means
   17  the United States environmental protection agency.
   18    (5)  "Economic development area" means an area which is designated (A)
   19  an economic development zone  pursuant  to  article  eighteen-B  of  the
   20  general municipal law or (B) an empowerment zone or enterprise community
   21  pursuant to section 1391 of the Internal Revenue Code.
   22    (6)  "Eligible  building" means a building located in this state which
   23  is :
   24    (A) classified B2, B3, B4, C1, C2, C5, or C6 for purposes of  the  New
   25  York  state uniform fire prevention and building code or similarly clas-
   26  sified under any  subsequent  code;  provided  that  any  such  building
   27  contains at least twenty thousand square feet of interior space, or
   28    (B)  a residential multi-family building with at least twelve dwelling
   29  units that contain at least twenty  thousand  square  feet  of  interior
   30  space, or
   31    (C)  one  or more residential multi-family buildings with at least two
   32  dwelling units that are part of a single or phased construction  project
   33  that contains, in the aggregate, at least twenty thousand square feet of
   34  interior  space;  provided  that  in any single phase of such project at
   35  least ten thousand square feet of interior space is  under  construction
   36  or rehabilitation, or
   37    (D)  any  combination of buildings described in subparagraphs (A), (B)
   38  and (C) of this paragraph, and
   39    (E) is not a building placed in service on or after January first, two
   40  thousand one on freshwater wetlands or tidal wetlands  the  construction
   41  of which requires a permit under section 24-0701 or 25-0403, respective-
   42  ly,  of the environmental conservation law, or on wetlands such that the
   43  construction thereof requires a permit pursuant to section  404  of  the
   44  federal clean water act (33 U.S.C. § 1344).
   45    (7)  "Energy  code"  means  the  New  York  state  energy conservation
   46  construction code.
   47    (8) "Fuel cell" means a device that produces electricity directly from
   48  hydrogen or hydrocarbon fuel through a  non-combustive  electro-chemical
   49  process.
   50    (9)  "Green  base  building" means a base building which is part of an
   51  eligible building and which meets the following standards:
   52    (A) Energy and energy efficiency. (i)  Energy  use  is  no  more  than
   53  sixty-five  percent (in the case of new construction of a base building)
   54  or seventy-five percent (in the case of rehabilitation of a base  build-
   55  ing)  of  the  use permitted under the energy code or, in the event such
   56  standard is revised or superseded, energy  use  shall  meet  such  other

       S. 6295                            89                            A. 9295

    1  energy  efficiency  standards  that  DEC,  in consultation with NYSERDA,
    2  shall establish in regulations promulgated pursuant to paragraph one  of
    3  subdivision (e) of this section, in effect at the time the base building
    4  or rehabilitation thereof is placed in service.
    5    (ii)  All appliances and any heating, cooling and water heating equip-
    6  ment used in the base building and subject to the regulations promulgat-
    7  ed by DEC, in consultation with NYSERDA, pursuant to  paragraph  one  of
    8  subdivision (e) of this section, shall meet the standards established by
    9  such  regulations  in  effect at the time the base building or rehabili-
   10  tation thereof is placed in service.
   11    (B) Zoning, indoor  air  quality,  building  materials,  finishes  and
   12  furnishings.  (i)  The  base  building  shall comply with all applicable
   13  zoning, land use and erosion control requirements, stormwater management
   14  ordinances, building code requirements and environmental regulations. In
   15  the case of the rehabilitation of an  existing  building,  all  existing
   16  environmental hazards shall be identified and managed in accordance with
   17  applicable laws, regulations and industry guidelines.
   18    (ii)  Buildings classified B2, B3, B4, C1, C2, C5, or C6, for purposes
   19  of the New York state uniform fire  prevention  and  building  code,  or
   20  similarly classified under any subsequent code, shall meet the following
   21  indoor air quality requirements:
   22    (I)  ventilation  and  exchange  of  indoor/outdoor air shall meet the
   23  standards established by regulations promulgated by DEC, in consultation
   24  with DOH and NYSERDA, pursuant to paragraph two of  subdivision  (e)  of
   25  this section;
   26    (II)  if smoking is permitted in specific areas of the building, sepa-
   27  rate air ventilation and circulation shall be provided for  smoking  and
   28  non-smoking areas;
   29    (III)  the ventilation system shall include an air purging system that
   30  is capable of replacing one hundred percent of the air on any floor,  on
   31  a  minimum of two floors at a time. The air shall be purged for a period
   32  of one week on every floor immediately prior to initial occupancy and on
   33  any floor that undergoes renovation immediately prior  to  re-occupancy;
   34  provided  that,  if  a  taxpayer  obtains  certification from a licensed
   35  architect, engineer, certified industrial hygienist, or  other  licensed
   36  or certified professional whom the commissioner of environmental conser-
   37  vation  shall approve, pursuant to regulations, verifying that off-gass-
   38  ing and any other contamination can be reduced to comparable  levels  in
   39  less than one week, the period of purging may be shortened. The taxpayer
   40  shall  maintain  a  copy  of  such  certification in accordance with the
   41  provisions of subdivision (d) of this section.
   42    (C) Building fresh air intake shall be located a  minimum  of  twenty-
   43  five feet away from loading areas, building exhaust fans, cooling towers
   44  and other point sources of contamination.
   45    (D)  During  construction  or  rehabilitation,  the ventilation system
   46  components and pathways shall be protected from contamination in accord-
   47  ance with an indoor air quality management plan for the construction  or
   48  rehabilitation  process  that  meets  the standards established in regu-
   49  lations promulgated by DEC, in consultation with DOH and NYSERDA, pursu-
   50  ant to paragraph two of subdivision (e) of this section.  In  the  event
   51  that  such areas are not protected from contamination in accordance with
   52  such standards, they shall be cleaned prior to occupancy.
   53    (E) A licensed engineer,  certified  industrial  hygienist,  or  other
   54  licensed  or  certified  professional  whom the commissioner of environ-
   55  mental  conservation  shall  approve,  pursuant  to  regulations,  shall
   56  conduct  indoor  air quality testing with respect to the entire building

       S. 6295                            90                            A. 9295

    1  immediately following occupancy, if any, and  on  an  annual  basis,  to
    2  monitor  supply  and  return  air  and  ambient air for carbon monoxide,
    3  carbon dioxide, total volatile organic compounds, radon, and particulate
    4  matter.    Provided, however, once radon measurements have been found to
    5  be satisfactory, subsequent annual testing is not required.  The taxpay-
    6  er shall record baseline readings immediately  following  occupancy,  if
    7  any,  and  annually  thereafter. In the event that the taxpayer does not
    8  establish that during a taxable year during which any part of the build-
    9  ing is occupied, indoor air quality met  the  standards  established  in
   10  regulations  promulgated  by  DEC, in consultation with DOH and NYSERDA,
   11  pursuant to paragraph two of subdivision (e) of this section,  the  base
   12  building shall not constitute a green base building.
   13    (F)  The  mechanical  plant  of  the building shall be commissioned in
   14  accordance with the standards established in regulations promulgated  by
   15  DEC, in consultation with NYSERDA, pursuant to subparagraph (D) of para-
   16  graph  one  of subdivision (e) of this section, which standards shall be
   17  informed by documents such as ASHRAE G-1 and the United  States  general
   18  services  administration  "Model Commissioning Plan and Guide Specifica-
   19  tions". For purposes of this subparagraph the term  "ASHRAE"  means  the
   20  American  society  of  heating, refrigerating and air conditioning engi-
   21  neers.
   22    (G) Separate waste disposal chutes or a carousel compactor system  for
   23  recyclable  materials  shall  be  provided for the recycling of waste by
   24  occupants, or recycling shall be otherwise facilitated by, at a minimum,
   25  providing a readily accessible designated collection area or areas  with
   26  sufficient  space  to  store  recyclable  materials  separately  between
   27  collection dates.
   28    (H) All plumbing fixtures in the public areas of  the  building  shall
   29  meet  the plumbing fixture requirements of the energy policy act of 1992
   30  or any successor provision in effect at the time the building  or  reha-
   31  bilitation is placed in service.
   32    (I)  Prior  to  initial  occupancy  and upon request, the owner of the
   33  building shall provide each tenant with (1) written notification of  the
   34  opportunity  to  apply for a tax credit pursuant to this section and (2)
   35  written guidelines regarding opportunities to improve the  energy  effi-
   36  ciency  and  air quality of tenant space and to reduce and recycle waste
   37  streams.
   38    (J) All building materials, finishes and furnishings used in the  base
   39  building and subject to the regulations promulgated by DEC, in consulta-
   40  tion  with  NYSERDA,  pursuant to subparagraph (A) of paragraph three of
   41  subdivision (e) of this section, shall meet the standards established by
   42  such regulations in effect at the time the building or rehabilitation is
   43  placed in service; provided further that with  respect  to  furnishings,
   44  this requirement shall apply only to newly purchased items.
   45    (K)  All  tenant  space  in the building occupied by the owner must be
   46  green tenant space.
   47    (10) "Green building" means a building wherein the base building is  a
   48  green base building and all tenant space is green tenant space.
   49    (11)  "Green  tenant  space"  means tenant space in a building if such
   50  building is an eligible building and if such tenant space complies  with
   51  the following requirements:
   52    (A)  Energy  and energy efficiency. (i) Energy use for tenant space is
   53  no more than sixty-five percent (in the case  of  new  construction)  or
   54  seventy-five  percent (in the case of rehabilitation) of the use permit-
   55  ted under the energy code or, in the event such standard is  revised  or
   56  superseded, energy use shall meet such other energy efficiency standards

       S. 6295                            91                            A. 9295

    1  that  DEC,  in consultation with NYSERDA, shall establish in regulations
    2  promulgated pursuant  to  paragraph  one  of  subdivision  (e)  of  this
    3  section,  in effect at the time the improvements with respect to which a
    4  tax credit is claimed are placed in service.
    5    (ii)  All appliances and any heating, cooling and water heating equip-
    6  ment used in the tenant space and subject to the regulations promulgated
    7  by DEC, in consultation with  NYSERDA,  pursuant  to  paragraph  one  of
    8  subdivision  (e) of this section shall meet the standards established by
    9  such regulations or, in the event that such standards are  revised,  the
   10  standards in effect at the time the improvements with respect to which a
   11  tax credit is claimed are placed in service.
   12    (B)   Code  requirements,  indoor  air  quality,  building  materials,
   13  finishes and furnishings. (i) The tenant space  shall  comply  with  all
   14  applicable building code requirements and environmental regulations and,
   15  with respect to projects other than new construction, all existing envi-
   16  ronmental  hazards  shall  be  identified and managed in accordance with
   17  applicable laws, regulations and industry guidelines.
   18    (ii) In the case of buildings classified B2, B3, B4, C1,  C2,  C5,  or
   19  C6,  for  purposes  of  the  New  York state uniform fire prevention and
   20  building code, or similarly classified under any subsequent code, venti-
   21  lation and exchange of  indoor/outdoor  air  shall  meet  the  standards
   22  established  in regulations promulgated by DEC, in consultation with DOH
   23  and NYSERDA, pursuant to  paragraph  two  of  subdivision  (e)  of  this
   24  section.
   25    (iii)  For buildings in which smoking is permitted, the taxpayer shall
   26  ensure that, if smoking is permitted in the tenant space, it is  permit-
   27  ted  only in areas in which the air ventilation and circulation is sepa-
   28  rate from that for non-smoking areas.
   29    (iv) During construction or  rehabilitation,  the  ventilation  system
   30  components and pathways shall be protected from contamination in accord-
   31  ance  with an indoor air quality management plan for the construction or
   32  rehabilitation process that meets the  standards  established  in  regu-
   33  lations promulgated by DEC, in consultation with DOH and NYSERDA, pursu-
   34  ant  to  paragraph  two of subdivision (e) of this section. In the event
   35  that such areas are not protected from contamination in accordance  with
   36  such standards, they shall be cleaned prior to occupancy.
   37    (v)  A  licensed  engineer,  certified  industrial hygienist, or other
   38  licensed or certified professional whom  the  commissioner  of  environ-
   39  mental  conservation  shall  approve,  pursuant  to  regulations,  shall
   40  conduct indoor air quality testing with  respect  to  the  tenant  space
   41  immediately  following  occupancy,  if  any,  and on an annual basis, to
   42  monitor supply and return air  and  ambient  air  for  carbon  monoxide,
   43  carbon dioxide, total volatile organic compounds, radon, and particulate
   44  matter.    Provided, however, once radon measurements have been found to
   45  be satisfactory, subsequent annual testing is not required.  The taxpay-
   46  er shall record baseline readings immediately  following  occupancy,  if
   47  any,  and  annually  thereafter. In the event that the taxpayer does not
   48  establish that during a taxable year during which the  tenant  space  is
   49  occupied,  indoor  air  quality  met  the standards established in regu-
   50  lations promulgated by DEC, in consultation with DOH and NYSERDA, pursu-
   51  ant to paragraph two of subdivision (e)  of  this  section,  the  tenant
   52  space shall not constitute green tenant space.
   53    (vi) All plumbing fixtures in the tenant space shall meet the plumbing
   54  fixture  requirements  of  the  energy  policy  act of 1992 or successor
   55  provision in effect at the time the improvements with respect to which a
   56  tax credit is claimed are placed in service.

       S. 6295                            92                            A. 9295

    1    (vii) All building materials, finishes and  furnishings  selected  for
    2  use  in  the  tenant space and subject to the regulations promulgated by
    3  DEC, in consultation with NYSERDA, pursuant to subparagraph (A) of para-
    4  graph three of subdivision (e) of this section, shall meet the standards
    5  established by such regulations or, in the event that such standards are
    6  revised,  the  standards  in  effect  at  the time the improvements with
    7  respect to which a tax credit is claimed are placed in service, provided
    8  that, with respect to furnishings, this requirement shall apply only  to
    9  newly purchased items.
   10    (12)  "Incremental  cost  of building-integrated photovoltaic modules"
   11  means:
   12    (A) the cost of building-integrated photovoltaic modules and any asso-
   13  ciated inverter, additional wiring  or  other  electrical  equipment  or
   14  additional  mounting  or structural materials, less the cost of spandrel
   15  glass or other building material that would have been used in the  event
   16  that building-integrated photovoltaic modules were not installed,
   17    (B) incremental labor costs properly allocable to on-site preparation,
   18  assembly and original installation of photovoltaic modules, and
   19    (C) incremental architectural and engineering services and designs and
   20  plans  directly related to the construction or installation of photovol-
   21  taic modules.
   22    (13) "NYSERDA" means the New York state energy research  and  develop-
   23  ment authority.
   24    (14)  "Qualifying  alternate energy sources" means building-integrated
   25  and  non-building-integrated  photovoltaic  modules   and   fuel   cells
   26  installed  to  serve  the  base  building or tenant space which have the
   27  capability to monitor their AC output,  and  which  are  validated  upon
   28  installation,  and annually thereafter, to ensure that such systems meet
   29  their design specifications.
   30    (15) "Tenant improvements" means improvements which are  necessary  or
   31  appropriate  to support or conduct the business of a tenant or occupying
   32  owner.
   33    (16) "Tenant space" means the portion of a building intended for occu-
   34  pancy by a tenant or occupying owner.
   35    (c) Certifications. (1) Initial  credit  component  certificate.  Upon
   36  application  by  a taxpayer, DEC shall issue an initial credit component
   37  certificate where the taxpayer has made a showing that the  taxpayer  is
   38  likely within a reasonable time to place in service property which would
   39  warrant  the  allowance of a credit under this section. Such certificate
   40  shall state the first taxable year for which the credit may  be  claimed
   41  and  an  expiration  date,  and  shall  apply only to property placed in
   42  service by such expiration date. Such expiration date may be extended at
   43  the discretion of DEC, in order to avoid  unwarranted  hardship.    Such
   44  certificates  may be issued in years 2000-2004.  Such certificates shall
   45  state the maximum amount of credit component allowable for each  of  the
   46  five  taxable  years  for  which  the credit component is allowed, under
   47  paragraphs two through seven of subdivision (a) of  this  section.  Such
   48  certificates  shall not be issued, in the aggregate, for more than twen-
   49  ty-five million dollars worth of credit components.  In  addition,  such
   50  certificates shall be limited in their applicability, as follows:

   51  Credit components in the aggregate           With respect to taxable
   52  shall not be allowed for more than:          years beginning in:

   53  $ 1 million                                  2001
   54  $ 2 million                                  2002

       S. 6295                            93                            A. 9295

    1  $ 3 million                                  2003
    2  $ 4 million                                  2004
    3  $ 5 million                                  2005
    4  $ 4 million                                  2006
    5  $ 3 million                                  2007
    6  $ 2 million                                  2008
    7  $ 1 million                                  2009
    8    Provided,  however,  that if as of the end of a calendar year, certif-
    9  icates for credit component  amounts  totalling  less  than  the  amount
   10  permitted with respect to taxable years commencing in such calendar year
   11  have  been  issued,  then  the  amount permitted with respect to taxable
   12  years commencing in the subsequent calendar year shall be  augmented  by
   13  the amount of such shortfall.
   14    (2) Eligibility certificate. For each taxable year for which a taxpay-
   15  er  claims a credit under this section with respect to a green building,
   16  green base building or green tenant space, a fuel cell, or  photovoltaic
   17  modules,  or  air conditioning equipment using an EPA-approved non-ozone
   18  depleting refrigerant, the taxpayer shall obtain from  an  architect  or
   19  professional  engineer licensed to practice in this state an eligibility
   20  certificate. Such certificate shall consist of  a  certification,  under
   21  the seal of such architect or engineer, that the building, base building
   22  or  tenant  space with respect to which the credit is claimed is a green
   23  building, green base building or green tenant space, respectively,  that
   24  the  fuel  cell  or photovoltaic modules constitute qualifying alternate
   25  energy sources and that the air conditioning equipment uses  an  EPA-ap-
   26  proved  non-ozone  depleting  refrigerant  and remains in service.  Such
   27  certification shall be made in accordance with the standards and  guide-
   28  lines  in  effect  at  the  time the property which is the basis for the
   29  credit was placed in service.  Such certification shall  set  forth  the
   30  specific  findings  upon which the certification was based. The taxpayer
   31  shall file such certificate, and the associated initial credit component
   32  certificate, with the claim for credit and shall file  duplicate  copies
   33  with DEC. Such certificate shall include sufficient information to iden-
   34  tify  each  building or space, and such other information as DEC and the
   35  commissioner shall prescribe.
   36    (3) Wrongful certification. If DEC  has  reason  to  believe  that  an
   37  architect  or  professional  engineer, in making any certification under
   38  this subdivision, engaged in professional misconduct, then DEC shall  so
   39  inform the education department.
   40    (d)  Other  requirements;  miscellaneous.  (1)  Record keeping.   Each
   41  taxpayer shall, for any taxable year for which the green building credit
   42  provided for under this section is  claimed,  maintain  records  of  the
   43  following information:
   44    (A)  annual  energy  consumption for building, base building or tenant
   45  space;
   46    (B) annual results of air monitoring;
   47    (C) annual confirmation that the building,  base  building  or  tenant
   48  space  continues  to  meet  requirements  regarding  smoking  areas,  if
   49  provided;
   50    (D) tenant guidelines referred to in  subparagraph  (I)  of  paragraph
   51  nine of subdivision (b) of this section, if applicable;
   52    (E)  all  written  notification  of tenants and requests to remedy any
   53  indoor air quality problems;
   54    (F) initial and annual (by month) results of validation of performance
   55  of photovoltaic modules and fuel cells; and

       S. 6295                            94                            A. 9295

    1    (G) certifications as  to  off-gassing  and  other  contamination,  as
    2  prescribed  in  subclause  (III)  of  clause (ii) of subparagraph (B) of
    3  paragraph nine of subdivision (b) of this section, where applicable.
    4    (2)  Reporting  to  DEC.  Each  taxpayer shall also provide to DEC the
    5  information described in paragraph one of this subdivision, in the  form
    6  and at the time prescribed by DEC, such time to be determined in consul-
    7  tation  with the commissioner of taxation and finance.  Such information
    8  shall be provided to DEC with respect to each taxable year with  respect
    9  to which the taxpayer claims a credit under this section.
   10    (3) Regulations. The commissioner of taxation and finance, the commis-
   11  sioner  of  environmental conservation and the commissioner of education
   12  are hereby authorized to promulgate and adopt regulations  necessary  to
   13  the  implementation of this section. Such regulations shall construe the
   14  provisions of this section in such a manner as to encourage the develop-
   15  ment of green buildings, green base buildings and green tenant space and
   16  to maintain high but commercially reasonable standards for obtaining tax
   17  credits hereunder.
   18    (4) Report. On or before April first, two thousand eight, the  commis-
   19  sioner  of taxation and finance and the commissioner of DEC, jointly and
   20  in consultation with NYSERDA, shall submit a  written  report  regarding
   21  the  number of certifications and taxpayers claiming the credit provided
   22  for under this section; the amount of the credits claimed, the geograph-
   23  ical distribution of the credits claimed; and any other  such  available
   24  information DEC may deem meaningful and appropriate. The commissioner of
   25  taxation  and  finance and the commissioner of DEC shall ensure that the
   26  information is presented and/or classified in a manner  consistent  with
   27  the  secrecy requirements of this chapter. DEC shall also make recommen-
   28  dations regarding the establishment of a permanent  green  building  tax
   29  credit  program.  Recommendations  may  include  methods  to enhance the
   30  effectiveness, simplicity or other aspects of the program.   The  report
   31  shall  be  submitted  to  the  governor,  the temporary president of the
   32  senate, the speaker of the assembly, the chairman of the senate  finance
   33  committee and the chairman of the assembly ways and means committee.
   34    (e)  Standards  and regulations. (1) Energy standards: base buildings.
   35  Within six months of the effective date of this section, DEC, in consul-
   36  tation with NYSERDA, shall promulgate the  following,  with  respect  to
   37  base buildings:
   38    (A)  regulations  establishing  standards  for energy use for eligible
   39  buildings.  DEC, in consultation with NYSERDA shall  review  and  update
   40  such  regulations  at  least every two years from the date on which such
   41  regulations are promulgated.
   42    (B) regulations establishing standards  for  appliances  and  heating,
   43  cooling  and water heating equipment that, on the effective date of this
   44  section, are covered by specifications from organizations  such  as  the
   45  United  States  department of energy or environmental protection agency.
   46  The development of such regulations shall be informed by such specifica-
   47  tions. DEC, in consultation with NYSERDA shall review  and  update  such
   48  regulations  at  least every two years from the date on which such regu-
   49  lations  are promulgated.
   50    (C) regulations indicating the methodology by which a  taxpayer  shall
   51  demonstrate compliance with subparagraph (A) of paragraph nine of subdi-
   52  vision  (b)  of this section. Such regulations shall include, at a mini-
   53  mum, a requirement to conduct hourly  computer  modeling  for  one  full
   54  year.
   55    (D) regulations establishing standards for the commissioning of build-
   56  ings.

       S. 6295                            95                            A. 9295

    1    (2)  Indoor  air  standards:  base buildings. Within six months of the
    2  effective date of this section, DEC, in consultation with DOH and NYSER-
    3  DA, shall promulgate regulations establishing standards, with respect to
    4  base buildings, for (A) ventilation and exchange of indoor/outdoor  air,
    5  (B) indoor air quality management plans for the construction or rehabil-
    6  itation  process,  and  (C) indoor air quality with respect to levels of
    7  carbon monoxide, carbon dioxide and total  volatile  organic  compounds,
    8  radon and particulate matter.
    9    (3)  Standards  for  materials,  water  conservation, drainage:   base
   10  buildings. Within one year of the effective date of this  section,  DEC,
   11  in  consultation  with  NYSERDA,  shall  promulgate  the following, with
   12  regard to base buildings:
   13    (A)  regulations  establishing  standards  for   building   materials,
   14  finishes  and  furnishings  regarding  minimum  percentages  of recycled
   15  content and renewable source material and maximum levels of toxicity and
   16  volatile organic compounds and any other standards that  the  DEC  deems
   17  appropriate.  Standards  shall  be  developed  for  building  materials,
   18  finishes and furnishings, including but  not  limited  to  concrete  and
   19  concrete  masonry  units;  wood  and wood products; millwork substrates;
   20  insulation; ceramic, ceramic/glass and cementitious tiles; ceiling tiles
   21  and panels; flooring and carpet; paints, coatings,  sealants  and  adhe-
   22  sives;  and  furniture.    The  development  of  such standards shall be
   23  informed by the LEED rating system. The DEC shall review and update such
   24  regulations at least every two years from the date on which  such  regu-
   25  lations  are  promulgated.  For  purposes  of  this clause, "LEED rating
   26  system" means the leadership in energy and  environmental  design  green
   27  building  rating  system  criteria  being developed by the United States
   28  green building council.
   29    (B) regulations establishing standards for buildings located in  areas
   30  where  water  use  is not metered, which regulations shall require, at a
   31  minimum, that the building include one of the following features:
   32    (i) a gray water system that recovers non-sewage waste water  or  uses
   33  roof  or ground storm water collection systems, or recovers ground water
   34  from sump pumps;
   35    (ii) for buildings with a cooling tower system, such system  shall  be
   36  designed with delimiters to reduce drift and evaporation; or
   37    (iii)  for  buildings  with  exterior plants, all such plants shall be
   38  tolerant of climate, soils and natural water availability and shall  not
   39  receive  watering  from municipal potable water after a period of estab-
   40  lishment is complete.
   41    (C) regulations establishing standards for buildings located in  areas
   42  that  do  not  have  sewers  or that have designated storm sewers, which
   43  regulations shall require, at a minimum, that the building shall include
   44  one of the following features:
   45    (i) an oil grit separator or water quality pond  for  pretreatment  of
   46  runoff from any surface parking areas; or
   47    (ii)  at  least  fifty percent of nonlandscaped areas (including road-
   48  ways, surface parking, plazas and pathways), if any, shall be  comprised
   49  of pervious paving materials.
   50    (D)  regulations  indicating  the methodology by which taxpayers shall
   51  demonstrate compliance with subparagraphs (B) and (C) of paragraph  nine
   52  of subdivision (b) of this section.
   53    (4) Energy standards: tenant space. Within six months of the effective
   54  date  of  this section, DEC, in consultation with NYSERDA, shall promul-
   55  gate regulations, with respect to tenant space, indicating the methodol-

       S. 6295                            96                            A. 9295

    1  ogy by which taxpayers shall demonstrate  compliance  with  subparagraph
    2  (A) of paragraph eleven of subdivision (b) of this section.
    3    (5) Standards for indoor air quality, building materials, finishes and
    4  furnishings: tenant space. Within one year of the effective date of this
    5  section,  DEC,  in  consultation  with DOH and NYSERDA, shall promulgate
    6  regulations, with respect to tenant space, indicating the methodology by
    7  which taxpayers shall demonstrate compliance with  subparagraph  (B)  of
    8  paragraph eleven of subdivision (b) of this section.
    9    (f)  Cross-references.  For  application of the credit provided for in
   10  this section, see the following provisions of this chapter:
   11    (1) Article nine: Section one hundred eighty-seven-d;
   12    (2) Article nine-A: Subdivision thirty-one of section two hundred ten;
   13    (3) Article twenty-two: Subsections (i) and (y) of section six hundred
   14  six;
   15    (4) Article thirty-two: Subsection (m)  of  section  fourteen  hundred
   16  fifty-six;
   17    (5)  Article  thirty-three: Subdivision (o) of section fifteen hundred
   18  eleven.
   19    § 3. The tax law is amended by adding a new section 187-d to  read  as
   20  follows:
   21    §  187-d.  Green  building  credit. 1. Allowance of credit. A taxpayer
   22  shall be allowed a credit, to be computed as provided in  section  nine-
   23  teen  of this chapter, against the taxes imposed by sections one hundred
   24  eighty-three, one hundred eighty-four, one hundred eighty-five  and  one
   25  hundred  eighty-six of this article.  Provided, however, that the amount
   26  of such credit allowable against the tax imposed by section one  hundred
   27  eighty-four  of  this  article shall be the excess of the amount of such
   28  credit over the amount of any credit allowed by this section against the
   29  tax imposed by section one hundred eighty-three of this article.
   30    2. Carryovers. In no event shall the  credit  under  this  section  be
   31  allowed  in an amount which will reduce the tax payable to less than the
   32  applicable minimum tax fixed by section one  hundred  eighty-three,  one
   33  hundred  eighty-five  or  one  hundred  eighty-six  of this article. If,
   34  however, the amount of credit allowable under this section for any taxa-
   35  ble year reduces the tax to such amount, any amount of credit not deduc-
   36  tible in such taxable year may be carried over to the following year  or
   37  years  and  may  be  deducted  from  the taxpayer's tax for such year or
   38  years.
   39    § 4. Section 210 of the tax law is amended by adding a new subdivision
   40  31 to read as follows:
   41    31. Green building credit. (a) Allowance of credit. A  taxpayer  shall
   42  be  allowed  a credit, to be computed as provided in section nineteen of
   43  this chapter, against the tax imposed by this article.
   44    (b) Carryovers. The credit and carryovers of such credit allowed under
   45  this subdivision for any taxable  year  shall  not,  in  the  aggregate,
   46  reduce  the tax due for such year to less than the higher of the amounts
   47  prescribed in paragraphs (c) and (d) of subdivision one of this section.
   48  However, if the amount of credit or carryovers of such credit, or  both,
   49  allowed  under  this subdivision for any taxable year reduces the tax to
   50  such amount, any amount of credit or carryovers of such credit thus  not
   51  deductible  in  such  taxable  year may be carried over to the following
   52  year or years and may be deducted from the tax for such year or years.
   53    § 5. Paragraph 1 of subsection (i) of section 606 of the tax  law,  as
   54  amended  by  section  2 of part J of chapter 407 of the laws of 1999, is
   55  amended to read as follows:

       S. 6295                            97                            A. 9295

    1    (1) For purposes of determining the application under this section  of
    2  the  credit  provisions enumerated in the following table, a shareholder
    3  of a New York S corporation:
    4    (A)  shall  be  treated as the taxpayer with respect to his or her pro
    5  rata share of the corresponding credit base of such corporation,  deter-
    6  mined  for  the  corporation's  taxable  year  ending with or within the
    7  shareholder's taxable year and
    8    (B) shall be treated as the owner of a new business  with  respect  to
    9  such  share  if  the corporation qualifies as a new business pursuant to
   10  paragraph (j) of subdivision twelve of section two hundred ten  of  this
   11  chapter,  unless  the  shareholder  has  previously received a refund by
   12  reason of the application of this subparagraph, or this subsection as it
   13  was in effect for taxable years beginning before nineteen hundred  nine-
   14  ty-four.

   15                                          The corporation's
   16  With respect to the                     credit base under
   17  following credit                        section two hundred ten
   18  under this section:                     or section fourteen
   19                                          hundred fifty-six of this
   20                                          chapter is:

   21  Investment tax credit                   Investment credit base
   22  under subsection (a)                    or qualified
   23                                          rehabilitation
   24                                          expenditures under
   25                                          subdivision twelve of
   26                                          section two hundred ten

   27  Economic development                    Cost or other basis
   28  zone investment tax credit              under subdivision
   29  under subsection (j)                    twelve-B
   30                                          of section two hundred
   31                                          ten

   32  Economic development                    Eligible wages under
   33  zone wage tax credit                    subdivision nineteen of
   34  under subsection (k)                    section two hundred ten
   35                                          or subsection (e) of
   36                                          section fourteen hundred
   37                                          fifty-six

   38  Economic development zone               Qualified investments
   39  capital tax credit                      and contributions under
   40  under subsection (1)                    subdivision twenty of
   41                                          section two hundred ten
   42                                          or subsection (d) of
   43                                          section fourteen hundred
   44                                          fifty-six

   45  Agricultural property tax               Allowable school
   46  credit under subsection (n)             district property taxes under
   47                                          subdivision twenty-two of
   48                                          section two hundred ten

       S. 6295                            98                            A. 9295

    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  Economic develop-                       Applicable investment
   14  ment zone 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)

   24  Qualified emerging                      Qualified investments under
   25  technology company                      subdivision twelve-F of
   26  capital tax credit                      section two hundred ten
   27  under subsection (r)

   28  Credit for purchase of an               Cost of an automated
   29  automated external defibrillator        external defibrillator under
   30  under subsection (s)                    subdivision twenty-five of
   31                                          section two hundred ten
   32                                          or subsection (j) of section
   33                                          fourteen hundred fifty-six

   34  Green building credit                   Amount of green building credit
   35  under subsection (y)                    under subdivision thirty-one
   36                                          of section two hundred ten
   37                                          or subsection (m) of section
   38                                          fourteen hundred fifty-six
   39    § 6.  Section 606 of the tax law is amended by adding a new subsection
   40  (y) to read as follows:
   41    (y)  Green  building credit. (1) Allowance of credit. A taxpayer shall
   42  be allowed a credit, to be computed as provided in section  nineteen  of
   43  this chapter, against the tax imposed by this article.
   44    (2)  Carryovers.  If  the  amount of the credit and carryovers of such
   45  credit allowed under this subsection for any taxable year  shall  exceed
   46  the taxpayer's tax for such year, the excess, as well as any part of the
   47  credit or carryovers of such credit, or both, may be carried over to the
   48  following  year or years and may be deducted from the taxpayer's tax for
   49  such year or years.

       S. 6295                            99                            A. 9295

    1    § 7. Section 1456 of the tax law is amended by adding a new subsection
    2  (m) to read as follows:
    3    (m)  Green  building credit. (1) Allowance of credit. A taxpayer shall
    4  be allowed a credit, to be computed as provided in section  nineteen  of
    5  this chapter, against the tax imposed by this article.
    6    (2)  Carryover. The credit and carryovers of such credit allowed under
    7  this subsection for any taxable year shall not, in the aggregate, reduce
    8  the tax due for such  year  to  less  than  the  minimum  tax  fixed  by
    9  subsection  (b)  of section fourteen hundred fifty-five of this article.
   10  However, if the amount of credit or carryovers of such credit, or  both,
   11  allowed  under  this  subsection for any taxable year reduces the tax to
   12  such amount, then any amount of credit or carryovers of such credit thus
   13  not deductible in such taxable year may be carried over to the following
   14  year or years and may be deducted from the taxpayer's tax for such  year
   15  or years.
   16    §  8.  Section 1511 of the tax law is amended by adding a new subdivi-
   17  sion (o) to read as follows:
   18    (o) Green building credit. (1) Allowance of credit. A  taxpayer  shall
   19  be  allowed  a credit, to be computed as provided in section nineteen of
   20  this chapter, against the taxes imposed by this article.
   21    (2) Carryover. The credit and carryovers of such credit allowed  under
   22  this  subdivision  for  any  taxable  year  shall not, in the aggregate,
   23  reduce the tax due for such year to less than the minimum fixed by para-
   24  graph four of subdivision (a) of section fifteen  hundred  two  of  this
   25  article.  However, if the amount of credit or carryovers of such credit,
   26  or both, allowed under this subdivision for any taxable year reduces the
   27  tax to such amount, then any amount of  credit  or  carryovers  of  such
   28  credit  thus  not deductible in such taxable year may be carried over to
   29  the following year or years and may be deducted from the taxpayer's  tax
   30  for such year or years.
   31    §  9.  Section  6509  of  the education law is amended by adding a new
   32  subdivision 12 to read as follows:
   33    (12) In the event that the department  of  environmental  conservation
   34  has  reported  to  the  department alleged misconduct by an architect or
   35  professional engineer in making a certification under  section  nineteen
   36  of  the tax law (relating to the green building tax credit) the board of
   37  regents, upon a hearing, may revoke the license of such professional  or
   38  prescribe such other penalty as it determines to be appropriate.
   39    §  10. This act shall take effect immediately and shall apply to prop-
   40  erty placed in service in taxable years beginning on or after January 1,
   41  2001.

   42                                   PART N

   43    Section 1.  The tax law is amended by adding a new section 20 to  read
   44  as follows:
   45    §  20. Credit for transportation improvement contributions. (a) Allow-
   46  ance of credit. A taxpayer subject to tax under  article  nine,  nine-A,
   47  twenty-two,  thirty-two or thirty-three of this chapter shall be allowed
   48  a credit against such tax, pursuant  to  the  provisions  referenced  in
   49  subdivision  (d)  of  this  section. The credit shall be allowed where a
   50  taxpayer has made a certified  contribution  of  at  least  ten  million
   51  dollars  to  a  qualified  transportation improvement project in a prior
   52  taxable year. The credit shall be equal to six percent of the taxpayer's
   53  increased New York payroll for the taxable year. The  aggregate  of  all
   54  credit  amounts  allowed  to  the taxpayer pursuant to this section with

       S. 6295                            100                           A. 9295

    1  respect to a certified contribution shall not exceed the amount of  such
    2  certified contribution.
    3    (b)  Definitions.  As  used in this section, the following terms shall
    4  have the following meanings:
    5    (1) Certified contribution. The term "certified contribution" means  a
    6  contribution certified jointly by the commissioner of transportation and
    7  the  commissioner  of economic development as a contribution to a quali-
    8  fied transportation improvement project, such  certification  indicating
    9  the  date  and amount of such contribution by the taxpayer.  The commis-
   10  sioner of transportation and the comptroller are authorized  to  accept,
   11  hold  and,  notwithstanding  section  four  of the state finance law, to
   12  disburse such contributions, in the same manner  as  is  authorized  for
   13  municipal contributions in section ten of the highway law.
   14    (2)  Qualified transportation improvement project. The term "qualified
   15  transportation  improvement  project"  means  the  design,  development,
   16  construction,  and/or  improvement  of transportation infrastructure and
   17  related facilities or systems, including, but not limited to,  highways,
   18  roadways,  bridges,  ramps or lanes; or railroad, port, aviation or mass
   19  transit facilities; or ferry or marine facilities; or associated  right-
   20  of-way  and associated connections to existing or planned transportation
   21  infrastructure or facilities. A project  for  the  design,  development,
   22  construction,  and/or  improvement  of transportation infrastructure and
   23  related facilities or systems shall be considered a "qualified transpor-
   24  tation improvement project" under this section only if the  commissioner
   25  of  transportation  and the commissioner of economic development jointly
   26  determine, in their sole discretion, that the project would promote  the
   27  development  of  employment  opportunities in the state by creating more
   28  than one thousand new jobs in the state, and is in the best interests of
   29  the people of the state. The undertaking of said project is declared  to
   30  be  for  a  public  purpose,  and  the commissioner of transportation is
   31  authorized to participate in the costs thereof.
   32    (3) Increased New York payroll. The term "increased New York  payroll"
   33  means  the  excess,  if any, of (A) the taxpayer's total wages, salaries
   34  and other personal service compensation of employees within  the  state,
   35  other  than  general  executive officers (in the case of a corporation),
   36  for the taxable year, over (B)  the  average  of  the  taxpayer's  total
   37  wages,  salaries  and  other  personal service compensation of employees
   38  within the state, other than general executive officers (in the case  of
   39  a  corporation), for the taxable year in which the contribution was made
   40  and for the  two  immediately  preceding  taxable  years,  if  any.  For
   41  purposes  of  the  preceding  sentence,  the phrase "wages, salaries and
   42  other personal service compensation of employees within the state, other
   43  than general executive officers" shall have the meaning ascribed thereto
   44  for purposes of subparagraph three of paragraph (a) of subdivision three
   45  of section two hundred ten of this chapter (relating to the wage  factor
   46  under article nine-A of this chapter).
   47    (c)  Recapture.  (1)  If the taxpayer has made a contribution which is
   48  the basis for a credit allowed under this section, and if  with  respect
   49  to  the  third  full  taxable  year (the "test year") next following the
   50  taxable year during which such contribution was made (the  "contribution
   51  year") the employment increase test described in paragraph three of this
   52  subdivision  is  not  met,  the  taxpayer  shall add back the sum of the
   53  amounts of such credit which have been allowed  for  all  prior  taxable
   54  years,  and  shall  be allowed no further credit under this section with
   55  respect to such contribution with respect to any other taxable year.

       S. 6295                            101                           A. 9295

    1    (2) The amount required to be added back pursuant to this  subdivision
    2  shall  be augmented by an amount equal to the product of such amount and
    3  the underpayment rate of interest (without regard to  compounding),  set
    4  by  the  commissioner pursuant to subsection (e) of section one thousand
    5  ninety-six  of  this chapter, in the case of taxpayers which applied the
    6  credit against tax under article nine,  nine-A,  thirty-two  or  thirty-
    7  three, or pursuant to subsection (j) of section six hundred ninety-seven
    8  of this chapter, in the case of taxpayers who applied the credit against
    9  tax  under article twenty-two of this chapter, in effect on the last day
   10  of the taxable year.
   11    (3) The employment increase test shall be deemed met where the average
   12  number of full-time employees of the taxpayer within  the  state  during
   13  the  test  year  exceeds  such  number  determined  with  respect to the
   14  contribution year and the two immediately preceding taxable years by one
   15  thousand.
   16    (4) The average number  of  employees  in  a  taxable  year  shall  be
   17  computed  by  ascertaining  the  number  of  employees within the state,
   18  except general executive  officers  (in  the  case  of  a  corporation),
   19  employed by the taxpayer on the thirty-first day of March, the thirtieth
   20  day  of June, the thirtieth day of September and the thirty-first day of
   21  December in the taxable year, by adding together the number of employees
   22  ascertained on each of such dates and dividing the sum  so  obtained  by
   23  the  number  of  such  abovementioned dates occurring within the taxable
   24  year. For the purposes of this subdivision, the term  "employees  within
   25  the  state, except general executive officers" shall mean the same as in
   26  subparagraph three of paragraph (a) of subdivision three of section  two
   27  hundred ten of this chapter.
   28    (d)  Cross-references.  For  application of the credit provided for in
   29  this section, see the following provisions of this chapter:
   30    (1) Article 9: Section 187-e,
   31    (2) Article 9-A: Section 210: subdivision 32,
   32    (3) Article 22: Section 606: subsections (i) and (z),
   33    (4) Article 32: Section 1456: subsection (n),
   34    (5) Article 33: Section 1511: subdivision (p).
   35    § 2. The tax law is amended by adding a new section 187-e to  read  as
   36  follows:
   37    §  187-e.  Credit  for  transportation improvement contributions.   1.
   38  Allowance of credit. A  taxpayer  shall  be  allowed  a  credit,  to  be
   39  computed  as  provided  in  section  twenty of this chapter, against the
   40  taxes imposed by sections one hundred eighty-three, one hundred  eighty-
   41  four,  one  hundred eighty-five and one hundred eighty-six of this arti-
   42  cle.   Provided, however, that  the  amount  of  such  credit  allowable
   43  against the tax imposed by section one hundred eighty-four of this arti-
   44  cle  shall be the excess of the amount of such credit over the amount of
   45  any credit allowed by this section against the tax  imposed  by  section
   46  one hundred eighty-three of this article.
   47    2.  Application  of  credit.  In  no event shall the credit under this
   48  section be allowed in an amount which will reduce  the  tax  payable  to
   49  less than the applicable minimum tax fixed by section one hundred eight-
   50  y-three, one hundred eighty-five or one hundred eighty-six of this arti-
   51  cle.  If, however, the amount of credit allowable under this section for
   52  any taxable year reduces the tax to such amount, any  amount  of  credit
   53  not thus deductible in such taxable year shall be treated as an overpay-
   54  ment of tax to be credited or refunded in accordance with the provisions
   55  of  section  ten hundred eighty-six of this chapter.  Provided, however,

       S. 6295                            102                           A. 9295

    1  the provisions of subsection (c) of section ten hundred eighty-eight  of
    2  this chapter notwithstanding, no interest shall be paid thereon.
    3    3. Credit recapture. For provisions requiring recapture of credit, see
    4  subdivision (c) of section twenty of this chapter.
    5    § 3. Section 210 of the tax law is amended by adding a new subdivision
    6  32 to read as follows:
    7    32. Credit for transportation improvement contributions. (a) Allowance
    8  of  credit.  A  taxpayer  shall  be  allowed a credit, to be computed as
    9  provided in section twenty of this chapter, against the tax  imposed  by
   10  this article.
   11    (b)  Application  of credit. The credit allowed under this subdivision
   12  for any taxable year shall not reduce the tax due for such year to  less
   13  than  the  higher of the amounts prescribed in paragraphs (c) and (d) of
   14  subdivision one of this  section.  However,  if  the  amount  of  credit
   15  allowed  under  this subdivision for any taxable year reduces the tax to
   16  such amount, any amount of credit thus not deductible  in  such  taxable
   17  year  shall  be  treated  as  an  overpayment  of  tax to be credited or
   18  refunded in accordance with the provisions of section ten hundred eight-
   19  y-six of this chapter. Provided, however, the provisions  of  subsection
   20  (c) of section ten hundred eighty-eight of this chapter notwithstanding,
   21  no interest shall be paid thereon.
   22    (c)  Credit  recapture.  For provisions requiring recapture of credit,
   23  see subdivision (c) of section twenty of this chapter.
   24    § 4. Paragraph 1 of subsection (i) of section 606 of the tax  law,  as
   25  amended  by  section  2 of part J of chapter 407 of the laws of 1999, is
   26  amended to read as follows:
   27    (1) For purposes of determining the application under this section  of
   28  the  credit  provisions enumerated in the following table, a shareholder
   29  of a New York S corporation:
   30    (A) shall be treated as the taxpayer with respect to his  or  her  pro
   31  rata  share of the corresponding credit base of such corporation, deter-
   32  mined for the corporation's taxable  year  ending  with  or  within  the
   33  shareholder's taxable year and
   34    (B)  shall  be  treated as the owner of a new business with respect to
   35  such share if the corporation qualifies as a new  business  pursuant  to
   36  paragraph  (j)  of subdivision twelve of section two hundred ten of this
   37  chapter, unless the shareholder has  previously  received  a  refund  by
   38  reason of the application of this subparagraph, or this subsection as it
   39  was  in effect for taxable years beginning before nineteen hundred nine-
   40  ty-four.

   41  With respect to the                     The corporation's
   42  following credit                        credit base under
   43  under this section:                     section two hundred ten
   44                                          or section fourteen
   45                                          hundred fifty-six of this
   46                                          chapter is:

   47  Investment tax credit                   Investment credit base
   48  under subsection (a)                    or qualified
   49                                          rehabilitation
   50                                          expenditures under
   51                                          subdivision twelve of
   52                                          section two hundred ten

   53  Economic development                    Cost or other basis

       S. 6295                            103                           A. 9295

    1  zone investment tax credit              under subdivision
    2  under subsection (j)                    twelve-B
    3                                          of section two hundred
    4                                          ten

    5  Economic development                    Eligible wages under
    6  zone 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  Economic development 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
   24  abilities under                         under subdivision
   25  subsection (o)                          twenty-three of section
   26                                          two hundred ten
   27                                          or subsection (f)
   28                                          of section fourteen
   29                                          hundred fifty-six

   30  Employment incentive                    Applicable investment credit
   31  credit under subsec-                    base under subdivision
   32  tion (a-1)                              twelve-D

   33  Economic develop-                       Applicable investment
   34  ment zone employment                    credit under sub-
   35  incentive credit under                  division twelve-C
   36  subsection (j-1)

   37  Alternative fuels credit                Cost under subdivision
   38  under subsection (p)                    twenty-four

   39  Qualified emerging                      Applicable credit base
   40  technology company                      under subdivision twelve-E
   41  employment credit                       of section two hundred ten
   42  under subsection (q)

   43  Qualified emerging                      Qualified investments under
   44  technology company                      subdivision twelve-F of
   45  capital tax credit                      section two hundred ten
   46  under subsection (r)

       S. 6295                            104                           A. 9295

    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  Credit for transportation               Amount of credit under sub-
    8  improvement contributions               division thirty-two of section
    9  under subsection (z)                    two hundred ten or subsection
   10                                          (n) of section fourteen
   11                                          hundred fifty-six
   12    §  5. Section 606 of the tax law is amended by adding a new subsection
   13  (z) to read as follows:
   14    (z) Credit for transportation improvement contributions. (1) Allowance
   15  of credit. A taxpayer shall be allowed  a  credit,  to  be  computed  as
   16  provided  in  section twenty of this chapter, against the tax imposed by
   17  this article.
   18    (2) Application of credit. If the amount of the credit  allowed  under
   19  this subsection for any taxable year shall exceed the taxpayer's tax for
   20  such  year,  the  excess shall be treated as an overpayment of tax to be
   21  credited or refunded in accordance with the provisions  of  section  six
   22  hundred  eighty-six of this article, provided, however, that no interest
   23  shall be paid thereon.
   24    (3) Credit recapture. For provisions requiring  recapture  of  credit,
   25  see subdivision (c) of section twenty of this chapter.
   26    § 6. Section 1456 of the tax law is amended by adding a new subsection
   27  (n) to read as follows:
   28    (n) Credit for transportation improvement contributions. (1) Allowance
   29  of  credit.  A  taxpayer  shall  be  allowed a credit, to be computed as
   30  provided in section twenty of this chapter, against the tax  imposed  by
   31  this article.
   32    (2)  Application  of  credit. The credit allowed under this subsection
   33  for any taxable year shall not reduce the tax due for such year to  less
   34  than the minimum tax fixed by subsection (b) of section fourteen hundred
   35  fifty-five  of  this  article.  However, if the amount of credit allowed
   36  under this subsection for any taxable  year  reduces  the  tax  to  such
   37  amount,  then  any  amount of credit thus not deductible in such taxable
   38  year shall be treated as  an  overpayment  of  tax  to  be  credited  or
   39  refunded in accordance with the provisions of section ten hundred eight-
   40  y-six  of this chapter.  Provided, however, the provisions of subsection
   41  (c) of section ten hundred eighty-eight of this chapter notwithstanding,
   42  no interest shall be paid thereon.
   43    (3) Credit recapture. For provisions requiring  recapture  of  credit,
   44  see subdivision (c) of section twenty of this chapter.
   45    §  7.  Section 1511 of the tax law is amended by adding a new subdivi-
   46  sion (p) to read as follows:
   47    (p) Credit for transportation improvement contributions. (1) Allowance
   48  of credit. A taxpayer shall be allowed  a  credit,  to  be  computed  as
   49  provided in section twenty of this chapter, against the taxes imposed by
   50  this article.
   51    (2)  Application  of credit. The credit allowed under this subdivision
   52  for any taxable year shall not reduce the tax due for such year to  less
   53  than  the  minimum fixed by paragraph four of subdivision (a) of section
   54  fifteen hundred two of this article.  However, if the amount  of  credit
   55  allowed  under  this subdivision for any taxable year reduces the tax to

       S. 6295                            105                           A. 9295

    1  such amount, then any amount of credit thus not deductible in such taxa-
    2  ble year shall be treated as an overpayment of tax  to  be  credited  or
    3  refunded in accordance with the provisions of section ten hundred eight-
    4  y-six  of  this chapter. Provided, however, the provisions of subsection
    5  (c) of section ten hundred eighty-eight of this chapter notwithstanding,
    6  no interest shall be paid thereon.
    7    (3) Credit recapture. For provisions requiring  recapture  of  credit,
    8  see subdivision (c) of section twenty of this chapter.
    9    §  8.  Section 14 of the transportation law is amended by adding a new
   10  subdivision 34 to read as follows:
   11    34.  To  issue  certifications  with  respect  to  the  transportation
   12  improvement credit, as provided for by section twenty of the tax law.
   13    §  9.  This  act  shall  take  effect  immediately  and shall apply to
   14  contributions made on or after January 1, 2000 in taxable  years  begin-
   15  ning on or after such date.

   16                                   PART O

   17    Section  1. Paragraphs 20 and 21 of subdivision (b) of section 1101 of
   18  the tax law are REPEALED and a new paragraph 20  is  added  to  read  as
   19  follows:
   20    (20)  Commercial  horse boarding operation. "Commercial horse boarding
   21  operation" shall have the same meaning that such term has in subdivision
   22  thirteen of section three hundred one of  the  agriculture  and  markets
   23  law.
   24    §  2.  Subparagraph  (vi) of paragraph 3 of subdivision (c) of section
   25  1105 of the tax law, as added by chapter 103 of the  laws  of  1981,  is
   26  amended to read as follows:
   27    (vi)  such  services  rendered  on  or after September first, nineteen
   28  hundred eighty-two, with respect to tangible personal property  for  use
   29  or consumption [directly and] predominantly either in the production for
   30  sale  of  tangible personal property by farming or in a commercial horse
   31  boarding operation, or in both, as such tangible  personal  property  is
   32  specified  in paragraph six of subdivision (a) of section eleven hundred
   33  fifteen of this article. The exemption  provided  by  this  subparagraph
   34  [(vi)]  shall  not apply to the taxes imposed pursuant to section eleven
   35  hundred seven of this article.
   36    § 3. Paragraph 5 of subdivision (c) of section 1105 of the tax law, as
   37  amended by section 2 of part Y of chapter 407 of the laws  of  1999,  is
   38  amended to read as follows:
   39    (5)  Maintaining,  servicing  or  repairing real property, property or
   40  land, as such terms are defined in the real property  tax  law,  whether
   41  the services are performed in or outside of a building, as distinguished
   42  from  adding  to or improving such real property, property or land, by a
   43  capital improvement as such term capital improvement is defined in para-
   44  graph nine of subdivision (b) of section  eleven  hundred  one  of  this
   45  article, but excluding (i) services rendered by an individual who is not
   46  in a regular trade or business offering his services to the public, (ii)
   47  services  rendered  directly  with respect to real property, property or
   48  land used or consumed directly and predominantly in the  production  for
   49  sale of gas or oil by manufacturing, processing, generating, assembling,
   50  refining,  mining,  or extracting and (iii) services rendered [directly]
   51  with respect to  real  property,  property  or  land  used  or  consumed
   52  [directly  and]  predominantly  either  in  the  production  of tangible
   53  personal property,  for  sale,  by  farming[,  but  not  including  such
   54  services  rendered  with respect to such real property, property or land

       S. 6295                            106                           A. 9295

    1  which consists of or is constructed from  non-qualifying  farm  building
    2  materials  and  not  including  such  services in conjunction with which
    3  non-qualifying farm building materials are transferred to the purchaser]
    4  or in a commercial horse boarding operation, or in both.
    5    § 4. Paragraph 1 of subdivision (b) of section 1108 of the tax law, as
    6  separately  amended  by  section  2 of part D and section 3 of part Y of
    7  chapter 407 of the laws of 1999, is amended to read as follows:
    8    (1) Notwithstanding any provision of law to the contrary, the receipts
    9  from the following shall be exempt from the tax on retail sales and  the
   10  compensating  use  tax  imposed  by  this section: All sales of tangible
   11  personal property for use or consumption directly and  predominantly  in
   12  the  production of tangible personal property, gas, electricity, refrig-
   13  eration or steam, for sale, by  manufacturing,  processing,  generating,
   14  assembling,  refining,  mining[,]  or  extracting  [or farming and]; all
   15  sales of telephone central office equipment  and  station  apparatus  or
   16  comparable  telegraph  equipment  for  use directly and predominantly in
   17  receiving at destination or in initiating  and  switching  telephone  or
   18  telegraph communications, or in receiving, amplifying, processing, tran-
   19  smitting  and  retransmitting  telephone  or  telegraph signals; and all
   20  sales of tangible personal property for use or consumption predominantly
   21  either in the production of tangible personal  property,  for  sale,  by
   22  farming or in a commercial horse boarding operation, or in both.
   23    § 5. Paragraph 6 of subdivision (a) of section 1115 of the tax law, as
   24  amended  by  section  4 of part Y of chapter 407 of the laws of 1999, is
   25  amended to read as follows:
   26    (6) (A) Tangible personal property, whether or not incorporated  in  a
   27  building  or  structure  [but not including non-qualifying farm building
   28  materials], for use or consumption [directly and]  predominantly  either
   29  in  the  production for sale of tangible personal property by farming or
   30  in a commercial horse boarding operation, or in both.
   31    (B) With respect to the exemption of motor vehicles under  this  para-
   32  graph,  (i)  use  of a motor vehicle [directly] either in the production
   33  phase of farming or in a commercial  horse  boarding  operation,  or  in
   34  both,  shall  be  defined  as  any  use of the motor vehicle on property
   35  either farmed or used in a commercial horse boarding operation, or both,
   36  by the motor vehicle purchaser or user or in  direct  and  uninterrupted
   37  trips  between  properties farmed or used in such operation, or both, by
   38  the motor vehicle purchaser or user, and (ii) "predominantly" shall mean
   39  that more than fifty percent of the motor vehicle's  use  is  [directly]
   40  either  in  the  production  phase  of  farming or in a commercial horse
   41  boarding operation, or in both. The percentage  of  such  vehicle's  use
   42  [directly]  either in the production phase of farming or in a commercial
   43  horse boarding operation, or in both, may  be  computed  either  on  the
   44  basis of mileage or hours of use, at the discretion of the motor vehicle
   45  purchaser or user.  A person may purchase a motor vehicle qualifying for
   46  exemption under this paragraph without payment of tax imposed by section
   47  eleven  hundred five or eleven hundred ten of this article by furnishing
   48  the vendor a properly completed exemption certificate promulgated by the
   49  commissioner; and such purchaser may register such vehicle or apply  for
   50  a  certificate  of title for such vehicle with the commissioner of motor
   51  vehicles or a county clerk, without payment of such taxes, by furnishing
   52  such a properly completed certificate to such commissioner or clerk.
   53    § 6. Paragraphs 15 and 16 of subdivision (a) of section  1115  of  the
   54  tax law, as amended by section 5 of part Y of chapter 407 of the laws of
   55  1999, are amended to read as follows:

       S. 6295                            107                           A. 9295

    1    (15) Tangible personal property sold to a contractor, subcontractor or
    2  repairman  for  use in (i) erecting a structure or building [(a)] (A) of
    3  an organization described in subdivision (a) of section  eleven  hundred
    4  sixteen  or  [(b)]  (B)  used [directly and] predominantly either in the
    5  production  phase  of  farming  [other than non-qualifying farm building
    6  materials] or in a commercial horse boarding operation, or in  both,  or
    7  (ii)  adding  to,  altering or improving real property, property or land
    8  [(a)] (A) of such an organization  or  [(b)]  (B)  used  [directly  and]
    9  predominantly  either  in  the  production  phase of farming [other than
   10  non-qualifying farm building materials] or in a commercial horse  board-
   11  ing  operation, or in both, as the terms real property, property or land
   12  are defined  in  the  real  property  tax  law;  provided,  however,  no
   13  exemption shall exist under this paragraph unless such tangible personal
   14  property  is  to  become  an  integral component part of such structure,
   15  building or real property.
   16    (16) Tangible personal property sold to a contractor, subcontractor or
   17  repairman for use in maintaining, servicing or repairing real  property,
   18  property  or land (i) of an organization described in subdivision (a) of
   19  section eleven hundred sixteen or (ii) used [directly and] predominantly
   20  either in the production phase of  farming  [other  than  non-qualifying
   21  farm building materials] or in a commercial horse boarding operation, or
   22  in both, as the terms real property, property or land are defined in the
   23  real property tax law; provided, however, no exemption shall exist under
   24  this  paragraph  unless  such tangible personal property is to become an
   25  integral component part of such structure, building or real property.
   26    § 7. Subdivision (c) of section 1115 of the tax law, as added by chap-
   27  ter 93 of the laws of 1965, is amended to read as follows:
   28    (c) (1) Fuel, gas, electricity,  refrigeration  and  steam,  and  gas,
   29  electric,  refrigeration and steam service of whatever nature for use or
   30  consumption directly and  exclusively  in  the  production  of  tangible
   31  personal  property,  gas, electricity, refrigeration or steam, for sale,
   32  by  manufacturing,   processing,   assembling,   generating,   refining,
   33  mining[,]  or  extracting[, farming, agriculture, horticulture or flori-
   34  culture,] shall be exempt from the taxes imposed under subdivisions  (a)
   35  and  (b)  of  section  eleven  hundred five and the compensating use tax
   36  imposed under section eleven hundred ten of this article.
   37    (2) Fuel, gas, electricity, refrigeration and steam,  and  gas,  elec-
   38  tric,  refrigeration  and  steam  service  of whatever nature for use or
   39  consumption either in the production of tangible personal property,  for
   40  sale,  by  farming  or  in  a commercial horse boarding operation, or in
   41  both, shall be exempt from the taxes imposed under subdivisions (a)  and
   42  (b)  of section eleven hundred five and the compensating use tax imposed
   43  under section eleven hundred ten of this article.
   44    § 8. Subdivision (j) of section 1115 of the tax  law,  as  amended  by
   45  chapter 261 of the laws of 1988, is amended to read as follows:
   46    (j) The exemptions provided in this section shall not apply to the tax
   47  required  to  be  prepaid  pursuant  to the provisions of section eleven
   48  hundred two of this article nor to the taxes imposed by sections  eleven
   49  hundred  five  and  eleven  hundred  ten of this article with respect to
   50  receipts from sales and uses of motor fuel or diesel motor fuel,  except
   51  that the exemption provided in paragraph nine of subdivision (a) of this
   52  section  shall  apply  to the tax required to be prepaid pursuant to the
   53  provisions of section eleven hundred two of  this  article  and  to  the
   54  taxes  imposed by sections eleven hundred five and eleven hundred ten of
   55  this article with respect to  sales  and  uses  of  kero-jet  fuel.  The
   56  exemption  provided  in  subdivision  (c) of this section shall apply to

       S. 6295                            108                           A. 9295

    1  sales and uses of diesel motor fuel which is not enhanced  diesel  motor
    2  fuel but only if all of such fuel is consumed other than on the highways
    3  of this state, provided, however, this exemption shall in no event apply
    4  to  a  sale  of diesel motor fuel which involves a delivery at a filling
    5  station or into a repository which is equipped  with  a  hose  or  other
    6  apparatus  by  which  such fuel can be dispensed into the fuel tank of a
    7  motor vehicle. The exemption provided in subdivision (c) of this section
    8  shall apply to sales and uses of no more than four thousand five hundred
    9  gallons of diesel motor fuel in a thirty-day period for use or  consump-
   10  tion  [directly  and  exclusively]  either in the production for sale of
   11  tangible personal property by farming or in a commercial horse  boarding
   12  operation,  or  in  both  but only if all of such fuel is consumed other
   13  than on the highways of this state (except for the use of  the  highways
   14  to reach adjacent farmlands or adjacent lands used in a commercial horse
   15  boarding operation, or both), provided, however, such exemption shall be
   16  applicable  to  the  sale or use of more than four thousand five hundred
   17  gallons of diesel motor fuel in a thirty-day  period  for  such  use  or
   18  consumption  in  accordance  with a prior clearance given by the commis-
   19  sioner [of taxation and finance].
   20    § 9. Paragraph 1 of subdivision (a) of section 1210 of the tax law, as
   21  separately amended by section 4 of part D, section  5  of  part  KK  and
   22  section  6  of  part Y of chapter 407 of the laws of 1999, is amended to
   23  read as follows:
   24    (1) Either, all of the taxes described in article twenty-eight of this
   25  chapter, at the same uniform rate, as to which taxes all  provisions  of
   26  the  local  laws, ordinances or resolutions imposing such taxes shall be
   27  identical, except as to rate and except as  otherwise  provided  herein,
   28  with  the corresponding provisions in such article twenty-eight, includ-
   29  ing the definition and exemption provisions of such article, so  far  as
   30  the  provisions  of  such article twenty-eight can be made applicable to
   31  the taxes imposed by such city or county and with such  limitations  and
   32  special provisions as are set forth in this article.  However, any local
   33  law  enacted  by  any  city  of  one million or more, imposing the taxes
   34  authorized by this subdivision, shall omit  the  exemption  provided  in
   35  subdivision  (c) of section eleven hundred fifteen and, unless such city
   36  elects otherwise, the provision for refund or credit contained in clause
   37  six of subdivision (a) of section eleven hundred nineteen, and may  omit
   38  (A)  the  exception  provided  in  paragraph three of subdivision (c) of
   39  section eleven hundred five for receipts from laundering,  dry-cleaning,
   40  tailoring,  weaving,  pressing,  shoe repairing and shoe shining and (B)
   41  the exception provided in paragraph one of subdivision  (f)  of  section
   42  eleven hundred five for charges to a patron for admission to, or use of,
   43  facilities  for  sporting  activities  in  which  such patron is to be a
   44  participant, such as bowling alleys and swimming pools. Furthermore, any
   45  local law enacted by a city of one million or more  imposing  the  taxes
   46  authorized  by  this subdivision may impose the taxes described in para-
   47  graph six of subdivision (c) of section eleven hundred five at a rate in
   48  addition to the rate prescribed by this section not to  exceed  two  per
   49  centum  in multiples of one-half of one per centum. The taxes authorized
   50  under this subdivision may not be imposed by a city or county unless the
   51  local law, ordinance or resolution imposes such taxes so as  to  include
   52  all  portions  and  all  types of receipts, charges or rents, subject to
   53  state tax under sections eleven hundred five  and  eleven  hundred  ten,
   54  except  as  provided in the following sentence. Any local law, ordinance
   55  or resolution enacted by any city of less than one  million  or  by  any
   56  county  or school district, imposing the taxes authorized by this subdi-

       S. 6295                            109                           A. 9295

    1  vision, shall, notwithstanding any provision of  law  to  the  contrary,
    2  exclude  from  the  operation  of such local taxes all sales of tangible
    3  personal property for use or consumption directly and  predominantly  in
    4  the  production of tangible personal property, gas, electricity, refrig-
    5  eration or steam, for sale, by  manufacturing,  processing,  generating,
    6  assembly,  refining, mining[,] or extracting [or farming and]; all sales
    7  of telephone central office equipment and station apparatus or  compara-
    8  ble  telegraph equipment for use directly and predominantly in receiving
    9  at destination or in initiating and  switching  telephone  or  telegraph
   10  communication, or in receiving, amplifying, processing, transmitting and
   11  retransmitting telephone or telegraph signals; and all sales of tangible
   12  personal  property  for  use  or consumption predominantly either in the
   13  production of tangible personal property, for sale, by farming or  in  a
   14  commercial  horse boarding operation, or in both; and, unless such city,
   15  county or school district elects otherwise, shall omit the provision for
   16  credit or refund contained in clause six of subdivision (a)  of  section
   17  eleven  hundred nineteen. Any local law, ordinance or resolution enacted
   18  by any city, county or school district, imposing the taxes authorized by
   19  this  subdivision,  shall  omit  the  clothing  and  footwear  exemption
   20  provided  for  in  paragraph thirty of subdivision (a) of section eleven
   21  hundred fifteen, unless such city,  county  or  school  district  elects
   22  otherwise;  provided  that  if  such  a  city having a population of one
   23  million or more enacts the resolution described in  subdivision  (k)  of
   24  this section or repeals such resolution, such resolution or repeal shall
   25  also  be  deemed to amend any local law, ordinance or resolution enacted
   26  by such a city imposing such taxes pursuant to  the  authority  of  this
   27  subdivision,  whether  or  not such taxes are suspended at the time such
   28  city enacts its resolution pursuant to subdivision (k) of  this  section
   29  or  at  the  time  of  any such repeal; provided, further, that any such
   30  local law, ordinance or resolution and section eleven hundred seven,  as
   31  deemed to be amended in the event a city of one million or more enacts a
   32  resolution pursuant to the authority of subdivision (k) of this section,
   33  shall  be  further  amended, as provided in section twelve hundred eigh-
   34  teen, so that the clothing and footwear exemption in any such local law,
   35  ordinance or resolution or in such section eleven hundred seven  is  the
   36  same  as  the  clothing  and  footwear  exemption in paragraph thirty of
   37  subdivision (a) of section eleven hundred fifteen.
   38    § 10. This act shall take effect on March 1, 2001, and shall apply  to
   39  sales  made,  services rendered and uses occurring on or after that date
   40  although made, rendered or occurring under a prior  contract;  provided,
   41  further,  that the commissioner of taxation and finance shall be author-
   42  ized on and after the date this act shall have  become  a  law  to  take
   43  steps necessary to implement these provisions on their effective date.

   44                                   PART P

   45    Section  1.  The  opening paragraph of subdivision 1 of section 210 of
   46  the tax law, as amended by chapter 190 of the laws of 1990,  is  amended
   47  to read as follows:
   48    The tax imposed by subdivision one of section two hundred nine of this
   49  chapter  shall  be[,]: (A) in the case of each taxpayer other than a New
   50  York S corporation or a qualified homeowners association, the sum of (1)
   51  the highest of the amounts prescribed in paragraphs (a),  (b),  (c)  and
   52  (d)  of  this subdivision and (2) the amount prescribed in paragraph (e)
   53  of this subdivision, [and,] (B) in the case of each New  York  S  corpo-
   54  ration,  the amount prescribed in paragraph (g) of this subdivision, and

       S. 6295                            110                           A. 9295

    1  (C) in the case of a qualified homeowners association, the  sum  of  (1)
    2  the  highest of the amounts prescribed in paragraphs (a), (b) and (c) of
    3  this subdivision and (2) the amount prescribed in paragraph (e) of  this
    4  subdivision.  For  purposes of this paragraph, the term "qualified home-
    5  owners association" means a homeowners  association,  as  such  term  is
    6  defined  in  subsection  (c) of section five hundred twenty-eight of the
    7  internal revenue code without regard to subparagraph  (E)  of  paragraph
    8  one  of  such  subsection (relating to elections to be taxed pursuant to
    9  such section), which has no homeowners association  taxable  income,  as
   10  such  term  is  defined  in  subsection (d) of such section.   Provided,
   11  however, that in the case of a small business taxpayer (other than a New
   12  York S corporation) as defined in paragraph (f) of this subdivision,  if
   13  the  amount  prescribed  in such paragraph (b) is higher than the amount
   14  prescribed in such paragraph (a) solely by reason of the application  of
   15  the  rate  applicable  to small business taxpayers, then with respect to
   16  such taxpayer the tax referred to in the previous sentence shall be  the
   17  sum  of (1) the highest of the amounts prescribed in paragraphs (a), (c)
   18  and (d) of this subdivision and (2) the amount prescribed  in  paragraph
   19  (e) of this subdivision.
   20    § 2. This act shall take effect immediately and shall apply to taxable
   21  years beginning on and after January 1, 2000.

   22                                   PART Q

   23    Section  1.  Subdivision (a) of section 301-a of the tax law, as added
   24  by chapter 190 of the laws of 1990, is amended to read as follows:
   25    (a) General. Notwithstanding any other provision of this  chapter,  or
   26  of  any  other  law, for taxable months commencing on or after the first
   27  day of September, nineteen hundred ninety, there is hereby imposed  upon
   28  every  petroleum  business  for  the  privilege of engaging in business,
   29  doing business, employing capital, owning or leasing property, or  main-
   30  taining an office in this state, a monthly tax for each or any part of a
   31  taxable  month  equal  to the sum of the motor fuel component determined
   32  pursuant to subdivision (b) of this section, the automotive-type  diesel
   33  motor fuel component determined pursuant to paragraph one of subdivision
   34  (c)  of this section, the nonautomotive-type diesel motor fuel component
   35  determined pursuant to paragraph two of subdivision (c) of this  section
   36  and  the  residual  petroleum  product  component determined pursuant to
   37  subdivision (d) of this section. [In no event shall the tax  imposed  by
   38  this  article be less than twenty-five dollars for each or any part of a
   39  taxable month.]
   40    § 2. Subdivision (a) of section 301-e of the tax law,  as  amended  by
   41  chapter 2 of the laws of 1995, is amended to read as follows:
   42    (a)  Notwithstanding  any other provision of this chapter, for taxable
   43  months commencing on and after the  first  day  of  September,  nineteen
   44  hundred  ninety,  there is hereby imposed upon every aviation fuel busi-
   45  ness for the privilege of engaging in business, doing business,  employ-
   46  ing  capital,  owning  or  leasing property, or maintaining an office in
   47  this state, for all or any part of each of its taxable months a  monthly
   48  tax  equal  to the sum of (1) the aviation gasoline component determined
   49  pursuant to subdivision (b) of this section and (2) the kero-jet  compo-
   50  nent  determined  pursuant  to  subdivision  (c) of this section. [In no
   51  event shall the tax imposed by this article be less than two dollars for
   52  each or any part of a taxable month.] Provided, however, the commission-
   53  er may permit the tax imposed under this subdivision and returns related

       S. 6295                            111                           A. 9295

    1  to such tax to be paid and filed for a period  covering  twelve  consec-
    2  utive taxable months by aviation fuel businesses which are not airlines.
    3    § 3. This act shall take effect March 1, 2001, provided, however, that
    4  any  rules  or regulations necessary to implement the provisions of this
    5  act may be promulgated and any procedures, forms, or instructions neces-
    6  sary for such implementation may be adopted and issued on and after  the
    7  date  this  act  shall have become a  law; and the provisions of article
    8  13-A of the tax law amended by this act shall continue  in  effect  with
    9  respect  to  the  administration,  collection  and  enforcement of taxes
   10  accruing prior to repeal or amendment.

   11                                   PART R

   12    Section 1. The opening paragraph of subdivision a of section  1604  of
   13  the  tax  law, as amended by chapter 913 of the laws of 1977, is amended
   14  to read as follows:
   15    In addition to the powers and duties provided  in  other  sections  of
   16  this article, the division shall have the power and it shall be its duty
   17  to  operate  and  administer  the lottery including any [lottery for the
   18  support of winter sports physical education in commemoration of the XIII
   19  winter olympic games] joint, multi-jurisdiction, or out-of-state lottery
   20  in cooperation with a government-authorized lottery of one or more other
   21  jurisdictions, and to promulgate rules  and  regulations  governing  the
   22  establishment  and  operation  thereof, including but not limited to the
   23  following:
   24    § 2. Paragraph 3 of subdivision a of section 1612 of the tax  law,  as
   25  amended by chapter 2 of the laws of 1995, is amended to read as follows:
   26    (3) fifty percent of the total amount for which tickets have been sold
   27  for  games  known  as: (A) the "Daily Numbers Game" or "Win 4", discrete
   28  games in which the participants select no more than  three  or  four  of
   29  their own numbers to match with three or four numbers drawn by the divi-
   30  sion  for  purposes of determining winners of such games, (B) "Pick 10",
   31  offered no more than once daily, in which  participants  select  from  a
   32  specified  field  of  numbers a subset of ten numbers to match against a
   33  subset of numbers to be drawn by the division from such field of numbers
   34  for the purpose of determining winners of such game, [and] (C) "Take 5",
   35  offered no more than once daily, in which  participants  select  from  a
   36  specified  field  of numbers a subset of five numbers to match against a
   37  subset of five numbers to be drawn by the division from  such  field  of
   38  numbers  for  purposes  of determining winners of such game, and (D) any
   39  joint, multi-jurisdiction, or out-of-state lottery game,  provided  that
   40  prior  to  the introduction of such game there must have been a detailed
   41  description of such game  in  the  annual  financial  plan  required  by
   42  section sixteen hundred fifteen of this article; or
   43    § 3. Section 1617 of the tax law is REPEALED and a new section 1617 is
   44  added to read as follows:
   45    §  1617.   Joint, multi-jurisdiction, or out-of-state lottery. Subject
   46  to the provisions of sections sixteen hundred twelve and sixteen hundred
   47  fifteen of this article, the director may enter into an agreement with a
   48  government-authorized lottery of one or more other jurisdictions provid-
   49  ing for the operation and administration of a joint, multi-jurisdiction,
   50  or out-of-state lottery. Such a joint,  multi-jurisdiction,  or  out-of-
   51  state lottery may include a combined drawing, a combined prize pool, the
   52  transfer  of  sales  and  prize  monies to other jurisdictions as may be
   53  necessary, and such other cooperative arrangements as the director deems
   54  necessary or desirable.

       S. 6295                            112                           A. 9295

    1    § 4. This act shall take effect immediately.

    2                                   PART S

    3    Section  1.  Section 282-b of the tax law, as amended by chapter 55 of
    4  the laws of 1992, is amended to read as follows:
    5    § 282-b. Additional Diesel motor fuel tax.  In  addition  to  the  tax
    6  imposed  by section two hundred eighty-two-a of this chapter, a like tax
    7  shall be imposed at the rate of three cents per gallon upon sale or  use
    8  within  the  state  of  Diesel motor fuel or upon the delivery of Diesel
    9  motor fuel to a filling station or into the fuel tank of a motor vehicle
   10  for use in the operation thereof.  Except as otherwise provided in  this
   11  section,  all of the provisions of this article shall apply with respect
   12  to the additional tax imposed by this section to the same extent  as  if
   13  it  were imposed by said section two hundred eighty-two-a.  Beginning on
   14  April first, nineteen hundred ninety-one, four and one-sixth per  centum
   15  of  the  moneys  received  by  the  department [of taxation and finance]
   16  pursuant to the provisions of this section shall  be  deposited  to  the
   17  credit  of  the  emergency  highway reconditioning and preservation fund
   18  reserve account established pursuant to the provisions of paragraph  (b)
   19  of  subdivision  two  of  section  eighty-nine of the state finance law.
   20  Beginning on April first, nineteen hundred  ninety-one,  four  and  one-
   21  sixth  per  centum of the moneys received by the department [of taxation
   22  and finance] pursuant to the provisions of this section shall be  depos-
   23  ited  to  the  credit  of  the emergency highway construction and recon-
   24  struction fund reserve account established pursuant to the provisions of
   25  paragraph (b) of subdivision two of section eighty-nine-a of  the  state
   26  finance  law.  Beginning on April first, nineteen hundred ninety-two, an
   27  additional eight and one-third per centum of the moneys received by  the
   28  department  [of taxation and finance] pursuant to the provisions of this
   29  section shall be deposited to the credit of the emergency highway recon-
   30  ditioning and preservation fund reserve account established pursuant  to
   31  the  provisions  of  paragraph (b) of subdivision two of section eighty-
   32  nine of the state  finance  law.  Beginning  on  April  first,  nineteen
   33  hundred  ninety-two, an additional eight and one-third per centum of the
   34  moneys received by the department [of taxation and finance] pursuant  to
   35  the  provisions  of this section shall be deposited to the credit of the
   36  emergency highway construction and reconstruction fund  reserve  account
   37  established  pursuant  to the provisions of paragraph (b) of subdivision
   38  two of section eighty-nine-a of the state finance  law.    Beginning  on
   39  April  first,  two  thousand  one, seventy-five per centum of the moneys
   40  received by the department pursuant to the provisions  of  this  section
   41  shall  be  deposited in the dedicated fund accounts pursuant to subdivi-
   42  sion (d) of section three hundred one-j of this  chapter.  Beginning  on
   43  April  first,  two  thousand  three,  all  of the moneys received by the
   44  department pursuant to the provisions of this section shall be deposited
   45  in the dedicated fund accounts pursuant to subdivision  (d)  of  section
   46  three hundred one-j of this chapter.
   47    §  2.  Section  282-c of the tax law, as amended by chapter 166 of the
   48  laws of 1991, is amended to read as follows:
   49    § 282-c. Supplemental Diesel motor fuel tax. In addition to the  taxes
   50  imposed   by   sections   two   hundred  eighty-two-a  and  two  hundred
   51  eighty-two-b of this chapter, a like tax shall be imposed at the rate of
   52  one cent per gallon upon the sale or use  within  the  state  of  Diesel
   53  motor  fuel  or  upon  the  delivery  of  Diesel motor fuel to a filling
   54  station or into the fuel tank of a motor vehicle for use in  the  opera-

       S. 6295                            113                           A. 9295

    1  tion  thereof.  Except for paragraph (b) of subdivision three of section
    2  two hundred eighty-nine-c, all the  provisions  of  this  article  shall
    3  apply  with  respect  to the supplemental tax imposed by this section to
    4  the same extent as if it were imposed by said section two hundred eight-
    5  y-two-a.  On and after the first day of October, nineteen hundred seven-
    6  ty-two, twenty-five per centum of the monies received by the  department
    7  [of  taxation  and  finance]  pursuant to the provisions of this section
    8  shall be deposited to the credit of the emergency highway reconditioning
    9  and preservation fund established pursuant to the provisions of  section
   10  eighty-nine of the state finance law. Beginning on April first, nineteen
   11  hundred  eighty-three,  twenty-five per centum of the monies received by
   12  the department [of taxation and finance] pursuant to the  provisions  of
   13  this  section  shall be deposited to the credit of the emergency highway
   14  construction  and  reconstruction  fund  established  pursuant  to   the
   15  provisions of section eighty-nine-a of the state finance law.  Beginning
   16  on  April  first, nineteen hundred ninety, an additional twelve and one-
   17  half per centum of the moneys received by the  department  [of  taxation
   18  and  finance] pursuant to the provisions of this section shall be depos-
   19  ited to the credit of the emergency highway reconditioning and preserva-
   20  tion fund reserve account established  pursuant  to  the  provisions  of
   21  paragraph  (b)  of  subdivision  two of section eighty-nine of the state
   22  finance law. Beginning on April first, nineteen hundred ninety, an addi-
   23  tional twelve and one-half per centum of  the  moneys  received  by  the
   24  department  [of taxation and finance] pursuant to the provisions of this
   25  section shall be deposited  to  the  credit  of  the  emergency  highway
   26  construction  and reconstruction fund reserve account established pursu-
   27  ant to the provisions of paragraph (b) of  subdivision  two  of  section
   28  eighty-nine-a  of the state finance law. Beginning on April first, nine-
   29  teen hundred ninety-one, an additional twelve and one-half per centum of
   30  the moneys received by the department [of taxation and finance] pursuant
   31  to the provisions of this section shall be deposited to  the  credit  of
   32  the  emergency  highway  reconditioning  and  preservation  fund reserve
   33  account established pursuant to  the  provisions  of  paragraph  (b)  of
   34  subdivision  two of section eighty-nine of the state finance law. Begin-
   35  ning on April first, nineteen hundred ninety-one, an  additional  twelve
   36  and  one-half  per  centum  of the moneys received by the department [of
   37  taxation and finance] pursuant to the provisions of this  section  shall
   38  be  deposited  to  the  credit  of the emergency construction and recon-
   39  struction fund reserve account established pursuant to the provisions of
   40  paragraph (b) of subdivision two of section eighty-nine-a of  the  state
   41  finance  law.   Beginning on April first, two thousand three, all of the
   42  moneys received by the department pursuant to  the  provisions  of  this
   43  section  shall  be  deposited in the dedicated fund accounts pursuant to
   44  subdivision (d) of section three hundred one-j of this chapter.
   45    § 3. Section 284-a of the tax law, as amended by  chapter  55  of  the
   46  laws of 1992, is amended to read as follows:
   47    §  284-a. Additional motor fuel tax. In addition to the tax imposed by
   48  section two hundred eighty-four of this chapter, a  like  tax  shall  be
   49  imposed  at the rate of three cents per gallon upon motor fuel imported,
   50  manufactured or sold within this state by  a  distributor.    Except  as
   51  otherwise  provided  in this section, all the provisions of this article
   52  except subdivision two of section  two  hundred  eighty-nine-e  of  this
   53  article  shall  apply with respect to the additional tax imposed by this
   54  section to the same extent as if it were imposed  by  said  section  two
   55  hundred  eighty-four. Beginning on April first, nineteen hundred ninety-
   56  one, four and one-sixth per centum of the moneys received by the depart-

       S. 6295                            114                           A. 9295

    1  ment [of taxation and  finance]  pursuant  to  the  provisions  of  this
    2  section shall be deposited to the credit of the emergency highway recon-
    3  ditioning  and preservation fund reserve account established pursuant to
    4  the  provisions  of  paragraph (b) of subdivision two of section eighty-
    5  nine of the state  finance  law.  Beginning  on  April  first,  nineteen
    6  hundred ninety-one, four and one-sixth per centum of the moneys received
    7  by  the  department [of taxation and finance] pursuant to the provisions
    8  of this section shall be deposited to the credit of the emergency  high-
    9  way  construction  and  reconstruction  fund reserve account established
   10  pursuant to the provisions  of  paragraph  (b)  of  subdivision  two  of
   11  section  eighty-nine-a  of  the  state  finance  law. Beginning on April
   12  first, nineteen hundred ninety-two, an additional  eight  and  one-third
   13  per  centum  of  the  moneys received by the department [of taxation and
   14  finance] pursuant to the provisions of this section shall  be  deposited
   15  to  the  credit of the emergency highway reconditioning and preservation
   16  fund reserve account established pursuant to the provisions of paragraph
   17  (b) of subdivision two of section eighty-nine of the state finance  law.
   18  Beginning  on  April  first,  nineteen hundred ninety-two, an additional
   19  eight and one-third per centum of the moneys received by the  department
   20  [of  taxation  and  finance]  pursuant to the provisions of this section
   21  shall be deposited to the credit of the emergency  highway  construction
   22  and  reconstruction  fund  reserve  account  established pursuant to the
   23  provisions of paragraph (b) of subdivision two of section  eighty-nine-a
   24  of  the  state  finance  law.    Beginning on April first, two thousand,
   25  seventy-five per centum of the moneys received by the department  pursu-
   26  ant  to  the  provisions of this section shall be deposited in the dedi-
   27  cated fund accounts pursuant to subdivision (d) of section three hundred
   28  one-j of this chapter. Beginning on April first, two thousand three, all
   29  of the moneys received by the department pursuant to the  provisions  of
   30  this  section shall be deposited in the dedicated fund accounts pursuant
   31  to subdivision (d) of section three hundred one-j of this chapter.
   32    § 4. Section 284-c of the tax law, as amended by chapter  166  of  the
   33  laws of 1991, is amended to read as follows:
   34    § 284-c. Supplemental motor fuel tax. In addition to the taxes imposed
   35  by  sections  two  hundred  eighty-four and two hundred eighty-four-a of
   36  this chapter, a like tax shall be imposed at the rate of  one  cent  per
   37  gallon  upon motor fuel imported, manufactured or sold within this state
   38  by a distributor. Except for  paragraph  (b)  of  subdivision  three  of
   39  section  two  hundred  eighty-nine-c, all the provisions of this article
   40  shall apply with respect to the supplemental tax imposed by this section
   41  to the same extent as if it were imposed by  said  section  two  hundred
   42  eighty-four.  On  and  after  the first day of October, nineteen hundred
   43  seventy-two, twenty-five per  centum  of  the  monies  received  by  the
   44  department  [of taxation and finance] pursuant to the provisions of this
   45  section shall be deposited to the credit of the emergency highway recon-
   46  ditioning and preservation fund established pursuant to  the  provisions
   47  of  section  eighty-nine  of  the  state finance law. Beginning on April
   48  first, nineteen hundred eighty-three,  twenty-five  per  centum  of  the
   49  monies  received by the department [of taxation and finance] pursuant to
   50  the provisions of this section shall be deposited to the credit  of  the
   51  emergency  highway  construction  and  reconstruction  fund  established
   52  pursuant to the provisions of section eighty-nine-a of the state finance
   53  law.  Beginning on April first, nineteen hundred ninety,  an  additional
   54  twelve  and one-half per centum of the monies received by the department
   55  [of taxation and finance] pursuant to the  provisions  of  this  section
   56  shall be deposited to the credit of the emergency highway reconditioning

       S. 6295                            115                           A. 9295

    1  and  preservation  fund  reserve  account  established  pursuant  to the
    2  provisions of paragraph (b) of subdivision two of section eighty-nine of
    3  the state finance law. Beginning on April first, nineteen hundred  nine-
    4  ty,  an additional twelve and one-half per centum of the moneys received
    5  by the department [of taxation and finance] pursuant to  the  provisions
    6  of  this section shall be deposited to the credit of the emergency high-
    7  way construction and reconstruction  fund  reserve  account  established
    8  pursuant  to  the  provisions  of  paragraph  (b)  of subdivision two of
    9  section eighty-nine-a of the  state  finance  law.  Beginning  on  April
   10  first,  nineteen  hundred  ninety-one, an additional twelve and one-half
   11  per centum of the moneys received by the  department  [of  taxation  and
   12  finance]  pursuant  to the provisions of this section shall be deposited
   13  to the credit of the emergency highway reconditioning  and  preservation
   14  fund reserve account established pursuant to the provisions of paragraph
   15  (b)  of subdivision two of section eighty-nine of the state finance law.
   16  Beginning on April first, nineteen  hundred  ninety-one,  an  additional
   17  twelve  and one-half per centum of the moneys received by the department
   18  [of taxation and finance] pursuant to the  provisions  of  this  section
   19  shall  be  deposited to the credit of the emergency highway construction
   20  and reconstruction fund reserve  account  established  pursuant  to  the
   21  provisions  of paragraph (b) of subdivision two of section eighty-nine-a
   22  of the state finance law.  Beginning on April first, two thousand three,
   23  all of the moneys received by the department pursuant to the  provisions
   24  of this section shall be deposited in the dedicated fund accounts pursu-
   25  ant to subdivision (d) of section three hundred one-j of this chapter.
   26    §  5.  Subdivision  1  of  section 289-e of the tax law, as amended by
   27  chapter 329 of the laws of 1991, is amended and a new subdivision  3  is
   28  added to read as follows:
   29    1.  All  taxes,  interest, penalties and fees collected or received by
   30  the commissioner [of taxation and finance] under the  taxes  imposed  by
   31  this article, except as provided otherwise in subdivision two and subdi-
   32  vision  three of this section and sections two hundred eighty-two-b, two
   33  hundred eighty-two-c, two hundred eighty-four-a and two hundred  eighty-
   34  four-c,  other  than  those imposed by section two hundred eighty-four-b
   35  and the fee imposed by section two hundred eighty-four-d  and  penalties
   36  and interest on such fee, shall be deposited and disposed of pursuant to
   37  the  provisions  of  section  one hundred seventy-one-a of this chapter;
   38  provided that an amount equal to thirty-seven and one-half per centum of
   39  the moneys collected under section two hundred eighty-four of this chap-
   40  ter shall be appropriated and  used  for  the  acquisition  of  property
   41  necessary for the construction and reconstruction of highways and bridg-
   42  es  or  culverts  on the state highway system, and for the construction,
   43  maintenance and repair of such highways and  bridges  or  culverts,  all
   44  under the direction of the commissioner of transportation.
   45    3.  Subject  to the provisions of section one hundred seventy-one-a of
   46  this chapter relating to refunds and reimbursements, all  taxes,  inter-
   47  est,  penalties and fees collected or received by the commissioner after
   48  March thirty-first, two thousand, under the taxes imposed by section two
   49  hundred eighty-two-a of this article shall be deposited in the dedicated
   50  fund accounts pursuant to subdivision (d) of section three hundred one-j
   51  of this chapter.
   52    § 6. Subdivision (d) of section 301-h of the tax law,  as  amended  by
   53  chapter 170 of the laws of 1994, is amended to read as follows:
   54    (d)  Disposition.  Any  provision  of  this  article  to  the contrary
   55  notwithstanding, the full amount of tax, as well as interest and  penal-
   56  ties  relating  thereto,  collected  or received by the commissioner [of

       S. 6295                            116                           A. 9295

    1  taxation and finance] under this section shall be deposited and disposed
    2  of pursuant to the provisions of section one  hundred  seventy-one-a  of
    3  this  chapter.    Beginning  on  April  first, two thousand one, all the
    4  moneys  received  by the commissioner pursuant to the provisions of this
    5  section shall be deposited in the dedicated fund  accounts  pursuant  to
    6  subdivision (d) of section three hundred one-j of this article.
    7    §  7.  Subdivision  (d) of section 301-j of the tax law, as separately
    8  amended by chapters 56 and 57 of the laws  of 1993, is amended  to  read
    9  as follows:
   10    (d)  Deposit  and  disposition of revenue. All taxes, and any interest
   11  and penalties relating thereto, collected or received  with  respect  to
   12  the  supplemental  petroleum  and  aviation fuel business tax imposed by
   13  this section up to and including March  thirty-first,  nineteen  hundred
   14  ninety-three  shall  be  deposited  and  disposed  of  pursuant  to  the
   15  provisions of section one hundred seventy-one-a of this chapter.  Except
   16  as otherwise provided, on and after April first, nineteen hundred  nine-
   17  ty-three,  all  taxes,  and any interest and penalties relating thereto,
   18  collected or received in any month with  respect  to  such  supplemental
   19  petroleum  and  aviation  fuel  business  tax  imposed  by this section,
   20  together with [the] any other moneys specified in  [clause  (i)  of  the
   21  first  paragraph  of subdivision (b) of section three hundred twelve of]
   22  this chapter to be deposited under this subdivision, shall be deposited,
   23  on or before the fifteenth day of each succeeding month, proportionately
   24  into the following [funds] dedicated  fund  accounts  without  priority;
   25  sixty-three  percent  in  the  dedicated  highway  and bridge trust fund
   26  established pursuant to section eighty-nine-b of the state finance  law,
   27  thirty-four  percent  in  the  dedicated  mass transportation trust fund
   28  established pursuant to section eighty-nine-c of the state  finance  law
   29  to  be  distributed as follows: eighty-five percent of such amount shall
   30  be allocated to the New York city transit authority and its subsidiaries
   31  and the Staten Island rapid  transit  operating  authority  and  fifteen
   32  percent  of  such amount shall be allocated to the Long Island Rail Road
   33  Company and metro north commuter railroad company in accordance with the
   34  procedures for payment and distribution specified in section  one  thou-
   35  sand  two  hundred seventy-c of the public authorities law, for payment,
   36  subject to appropriation, to the metropolitan  transportation  authority
   37  dedicated tax fund established pursuant to section twelve hundred seven-
   38  ty-c  of the public authorities law, and three percent in such dedicated
   39  mass transportation trust fund to be distributed, subject  to  appropri-
   40  ation,  for  purposes  authorized  by section eighty-nine-c of the state
   41  finance law, to entities other than the mass transit operating  agencies
   42  which receive money from the metropolitan transportation authority dedi-
   43  cated  tax  fund.  Notwithstanding  any  general  or  special law to the
   44  contrary, other than a  law  which  makes  specific  reference  to  this
   45  sentence  of  this  section, so long as such metropolitan transportation
   46  authority dedicated tax fund shall exist,  any  appropriation  from  the
   47  dedicated mass transportation trust fund to the metropolitan transporta-
   48  tion authority, its affiliates or its subsidiaries shall be deemed to be
   49  an  appropriation  to  the metropolitan transportation authority and the
   50  total amount paid pursuant to such appropriation  or  appropriations  or
   51  section  thirty-one  of [a] chapter fifty-six of the laws of [1993 which
   52  enacted this  sentence]  nineteen  hundred  ninety-three  including  the
   53  second  clause  of  the  first sentence of subdivisions a and b thereof,
   54  shall be deposited to such metropolitan transportation  authority  dedi-
   55  cated  tax  fund  and  distributed  in accordance with the provisions of
   56  section twelve hundred seventy-c of the public authorities law.

       S. 6295                            117                           A. 9295

    1    Prior to making deposits as provided in this  subdivision,  the  comp-
    2  troller shall retain such amount as the commissioner may determine to be
    3  necessary,  subject  to  the approval of the director of the budget, for
    4  reasonable costs of the department [of taxation and finance] in adminis-
    5  tering  and  collecting the taxes deposited pursuant to this subdivision
    6  and for refunds and reimbursements with respect to such  taxes,  out  of
    7  which  the  comptroller  shall pay any refunds or reimbursements of such
    8  taxes to which taxpayers shall be entitled. Provided, further,  however,
    9  that,  prior  to such deposit, from the amounts so collected or received
   10  during the period commencing on January first, nineteen hundred  ninety-
   11  four  and ending on March thirty-first, nineteen hundred ninety-four, an
   12  amount equal to the portion of the  taxes,  interest  and  penalties  so
   13  received  or  collected  resulting  from the amendments made by sections
   14  forty-two, forty-three and forty-four of [a] chapter fifty-seven of  the
   15  laws of nineteen hundred ninety-three [that enacted this sentence] shall
   16  be  deposited  and disposed of pursuant to the provisions of subdivision
   17  one of section one hundred seventy-one-a of this chapter.
   18    § 8.  Subdivision (b) of section 312 of the tax  law,  as  amended  by
   19  section  6  of  part H of chapter 407 of the laws of 1999, is amended to
   20  read as follows:
   21    (b) Of all of the taxes collected or received by the commissioner  [of
   22  taxation  and finance] on or before March thirty-first, nineteen hundred
   23  ninety-one under the taxes imposed by sections three hundred  one-a  and
   24  three  hundred  one-e  of  this  article, and all interest and penalties
   25  relating thereto,  eighty-seven  and  five-hundredths  percent  of  such
   26  collections   shall  be  deposited  and  disposed  of  pursuant  to  the
   27  provisions of section one hundred seventy-one-a of this chapter and  the
   28  balance  thereof shall be deposited in the mass transportation operating
   29  assistance fund to the credit of the  metropolitan  mass  transportation
   30  operating assistance account and the public transportation systems oper-
   31  ating  assistance  account thereof in the manner provided by subdivision
   32  eleven of section one hundred eighty-two-a of  this  chapter.    Of  all
   33  taxes,  interest and penalties collected or received after March thirty-
   34  first, nineteen hundred ninety-one, and  before  April  first,  nineteen
   35  hundred  ninety-three,  from the taxes imposed by sections three hundred
   36  one-a and three hundred one-e of  this  article,  initially  thirty-five
   37  percent  shall be deposited and disposed of pursuant to such section one
   38  hundred seventy-one-a. The balance thereof shall then be disposed of  as
   39  follows:  seventy-two  and  seven-tenths  percent shall be deposited and
   40  disposed of pursuant to such section one hundred seventy-one-a and twen-
   41  ty-seven and three-tenths percent shall be deposited in such mass trans-
   42  portation operating assistance fund as  prescribed  in  the  aforestated
   43  manner.  Except as otherwise provided, of all taxes, interest and penal-
   44  ties collected or received after March  thirty-first,  nineteen  hundred
   45  ninety-three, and before April first, nineteen hundred ninety-four, from
   46  the  taxes  imposed  by  sections  three hundred one-a and three hundred
   47  one-e of this article, (i) initially fifty-four percent shall be  depos-
   48  ited, as prescribed by subdivision (d) of section three hundred one-j of
   49  this chapter, (ii) twenty-eight and three-tenths percent shall be depos-
   50  ited  and disposed of pursuant to such section one hundred seventy-one-a
   51  of this chapter in the general fund and (iii) seventeen and seven-tenths
   52  percent shall be deposited in such mass transportation operating assist-
   53  ance fund as prescribed in the aforestated  manner.  Provided,  however,
   54  that,  prior  to such deposit, from the amounts so collected or received
   55  during the period commencing on January first, nineteen hundred  ninety-
   56  four  and ending on March thirty-first, nineteen hundred ninety-four, an

       S. 6295                            118                           A. 9295

    1  amount equal to the portion of the  taxes,  interest  and  penalties  so
    2  received  or  collected  resulting  from the amendments made by sections
    3  forty-two, forty-three and forty-four of [a] chapter fifty-seven of  the
    4  laws of nineteen hundred ninety-three [that enacted this sentence] shall
    5  be  deposited  and disposed of pursuant to the provisions of subdivision
    6  one of section one hundred seventy-one-a  of  this  chapter.  Except  as
    7  otherwise  provided,  of  all taxes, interest and penalties collected or
    8  received on or after April first, nineteen hundred ninety-four, from the
    9  taxes imposed by sections three hundred one-a and three hundred one-e of
   10  this article, (i) initially fifty-four percent shall  be  deposited,  as
   11  prescribed  by  subdivision  (d)  of section three hundred one-j of this
   12  article, (ii) twenty-eight and three-tenths percent shall  be  deposited
   13  and  disposed  of  pursuant to such section one hundred seventy-one-a of
   14  this chapter in the general fund, (iii) seven and  nine  hundred  sixty-
   15  five  thousandths percent shall be deposited in such mass transportation
   16  operating assistance fund as prescribed in the  aforestated  manner  and
   17  (iv)  nine  and  seven  hundred thirty-five thousandths percent shall be
   18  deposited  in  the  revenue  accumulation  fund.  Except  as   otherwise
   19  provided,  of all taxes, interest and penalties collected or received on
   20  or after  September  first,  nineteen  hundred  ninety-four  and  before
   21  September first, nineteen hundred ninety-five, from the taxes imposed by
   22  sections  three  hundred  one-a and three hundred one-e of this article,
   23  (i) initially fifty-nine percent shall be deposited,  as  prescribed  by
   24  subdivision  (d)  of  section  three hundred one-j of this article, (ii)
   25  twenty-two and four-tenths percent shall be deposited  and  disposed  of
   26  pursuant  to  such  section one hundred seventy-one-a of this chapter in
   27  the general fund, (iii) eight  and  three  hundred  seventy  thousandths
   28  percent shall be deposited in such mass transportation operating assist-
   29  ance  fund  as prescribed in the aforestated manner and (iv) ten and two
   30  hundred thirty thousandths percent shall be  deposited  in  the  revenue
   31  accumulation  fund. Except as otherwise provided, of all taxes, interest
   32  and penalties, collected or received on or after September first,  nine-
   33  teen  hundred ninety-five and before April first, nineteen hundred nine-
   34  ty-six from the taxes imposed by sections three hundred one-a and  three
   35  hundred  one-e of this article, (i) initially sixty-two and eight-tenths
   36  percent shall be deposited as prescribed by subdivision (d)  of  section
   37  three  hundred  one-j  of  this  article, (ii) eighteen percent shall be
   38  deposited and disposed of pursuant to section one hundred  seventy-one-a
   39  of  this  chapter in the general fund, (iii) eight and six hundred forty
   40  thousandths percent shall be deposited in such mass transportation oper-
   41  ating assistance fund as prescribed in the aforestated manner  and  (iv)
   42  ten and five hundred sixty thousandths percent shall be deposited in the
   43  revenue  accumulation  fund. Except as otherwise provided, of all taxes,
   44  interest and penalties collected or received on or  after  April  first,
   45  nineteen  hundred ninety-six, and before January first, nineteen hundred
   46  ninety-seven from the taxes imposed by sections three hundred one-a  and
   47  three  hundred  one-e  of  this  article,  (i) initially sixty-three and
   48  three-tenths percent shall be deposited, as  prescribed  by  subdivision
   49  (d)  of  section three hundred one-j of this article, (ii) seventeen and
   50  four-tenths percent shall be deposited and disposed of pursuant to  such
   51  section  one  hundred  seventy-one-a of this chapter in the general fund
   52  and (iii) nineteen and three-tenths percent shall be deposited  in  such
   53  mass  transportation  operating  assistance  fund  as  prescribed in the
   54  aforestated manner.  Except as otherwise provided, of all taxes,  inter-
   55  est and penalties collected or received on or after January first, nine-
   56  teen  hundred  ninety-seven  and  before January first, nineteen hundred

       S. 6295                            119                           A. 9295

    1  ninety-eight from the taxes imposed by sections three hundred one-a  and
    2  three  hundred  one-e  of this article, (i) initially sixty-six and two-
    3  tenths percent shall be deposited, as prescribed by subdivision  (d)  of
    4  section  three hundred one-j of this article, (ii) fourteen and one-half
    5  percent shall be deposited and disposed of pursuant to such section  one
    6  hundred  seventy-one-a  of  this  chapter  in the general fund and (iii)
    7  nineteen and three-tenths percent shall be deposited in such mass trans-
    8  portation operating assistance fund as  prescribed  in  the  aforestated
    9  manner.  Except as otherwise provided, of all taxes, interest and penal-
   10  ties  collected  or received on or after January first, nineteen hundred
   11  ninety-eight and before April first, nineteen hundred  ninety-nine  from
   12  the  taxes  imposed  by  sections  three hundred one-a and three hundred
   13  one-e of this article, (i) initially sixty-eight and  one-tenth  percent
   14  shall  be  deposited,  as prescribed by subdivision (d) of section three
   15  hundred one-j of this article, (ii) twelve and four-tenths percent shall
   16  be deposited and disposed of pursuant to such section one hundred seven-
   17  ty-one-a of this chapter in the general  fund  and  (iii)  nineteen  and
   18  one-half  percent shall be deposited in such mass transportation operat-
   19  ing assistance fund as prescribed in the aforestated manner.  Except  as
   20  otherwise  provided,  of  all taxes, interest and penalties collected or
   21  received on or after April first, nineteen hundred ninety-nine, from the
   22  taxes imposed by sections three hundred one-a and three hundred one-e of
   23  this article, (i) initially sixty-nine and eight-tenths percent shall be
   24  deposited, as prescribed by subdivision (d)  of  section  three  hundred
   25  one-j of this article, (ii) ten and seven-tenths percent shall be depos-
   26  ited  and disposed of pursuant to such section one hundred seventy-one-a
   27  of this chapter in the general fund  and  (iii)  nineteen  and  one-half
   28  percent shall be deposited in such mass transportation operating assist-
   29  ance  fund  as prescribed in the aforestated manner. Except as otherwise
   30  provided, of all taxes, interest and penalties collected or received  on
   31  or  after  April  first,  two  thousand  one,  from the taxes imposed by
   32  sections three hundred one-a and three hundred one-e  of  this  article,
   33  (i)  initially  [seventy  and  one-half] eighty and three-tenths percent
   34  shall be deposited, as prescribed by subdivision (d)  of  section  three
   35  hundred one-j of this article[,] and (ii) [nine and eight-tenths percent
   36  shall  be deposited and disposed of pursuant to such section one hundred
   37  seventy-one-a of this chapter in the general fund  and  (iii)]  nineteen
   38  and  seven-tenths percent shall be deposited in such mass transportation
   39  operating assistance fund as prescribed in the aforestated manner.
   40    Provided, further, that on or before  the  twenty-fifth  day  of  each
   41  month  commencing  with October, nineteen hundred ninety and terminating
   42  with the month of March, two thousand one, the comptroller shall  deduct
   43  the  amount  of  six  hundred  twenty-five thousand dollars prior to any
   44  deposit or disposition of the taxes, interest and penalties collected or
   45  received pursuant to such sections three hundred one-a and three hundred
   46  one-e and shall pay such amount to the state treasury to the  credit  of
   47  the  general fund.  Provided, further that on or before the twenty-fifth
   48  day of each month commencing with April, two  thousand  one,  the  comp-
   49  troller  shall  deduct  the  amount  of six hundred twenty-five thousand
   50  dollars prior to any deposit or disposition of the taxes, interest,  and
   51  penalties  collected or received pursuant to such sections three hundred
   52  one-a and three hundred one-e and shall deposit such amount in the dedi-
   53  cated fund accounts pursuant to subdivision (d) of section three hundred
   54  one-j of  this  article.  Provided,  further,  that  commencing  January
   55  fifteenth,  nineteen  hundred ninety-one, and on or before the tenth day
   56  of March and the fifteenth day of June and September of such  year,  the

       S. 6295                            120                           A. 9295

    1  commissioner  [of  taxation  and  finance]  shall,  based on information
    2  supplied by taxpayers and other appropriate sources, estimate the amount
    3  of the utility credit authorized by section three hundred one-d of  this
    4  article which has been accrued to reduce tax liability under section one
    5  hundred  eighty-six-a  of this chapter during the period covered by such
    6  estimate and certify to the state comptroller such estimated amount. The
    7  comptroller shall forthwith, after receiving  such  certificate,  deduct
    8  the  amount of such credit so certified by the commissioner [of taxation
    9  and finance] prior to any deposit or disposition of the taxes,  interest
   10  and  penalties  collected  or  received  pursuant to such sections three
   11  hundred one-a and three hundred one-e  and  shall  pay  such  amount  so
   12  certified  and  deducted  into  the  state treasury to the credit of the
   13  general fund. As soon as practicable after April first, nineteen hundred
   14  ninety-one, nineteen hundred ninety-two  and  nineteen  hundred  ninety-
   15  three,  but  before  June  fifteenth of each such year, the commissioner
   16  shall determine the amount of the utility  tax  credit  which  has  been
   17  actually  used  to  reduce  tax liability under such section one hundred
   18  eighty-six-a and shall certify the difference between such actual amount
   19  and the earlier estimated amount. Also, subsequently, during the  fiscal
   20  year  when  the  commissioner  becomes aware of changes or modifications
   21  with respect to actual credit usage, the commissioner shall, as soon  as
   22  practicable,  issue  a  certification  setting  forth  the amount of any
   23  required adjustment to the amount  of  actual  credit  usage  previously
   24  certified.  After  receiving  the  certificate  of the commissioner with
   25  respect to actual credit usage or modification of the  same,  the  comp-
   26  troller shall forthwith adjust general fund receipts and the revenues to
   27  be deposited or disposed of under this article to reflect the difference
   28  so  certified  by  the  commissioner.  The commissioner [of taxation and
   29  finance] shall not be liable for any overestimate  or  underestimate  of
   30  the  amount  of  the utility credit which has been accrued to reduce tax
   31  liability under such section one hundred  eighty-six-a.  Nor  shall  the
   32  commissioner  be  liable  for  any  inaccuracy  in  any certificate with
   33  respect to the amount of such  credit  actually  used  or  any  required
   34  adjustment  with  respect  to  actual credit usage, but the commissioner
   35  shall as soon as practicable after discovery of  any  error  adjust  the
   36  next certification under this section to reflect any such error.
   37    On  or before July thirty-first, nineteen hundred ninety-two and on or
   38  before July thirty-first, nineteen hundred ninety-three, the commission-
   39  er [of taxation and finance] shall conduct the following  reconciliation
   40  with  respect  to the preceding fiscal year: he shall multiply the total
   41  of all taxes, penalties and interest, after refunds and  reimbursements,
   42  which  are  derived  from  the motor fuel component, the automotive-type
   43  diesel motor fuel component and the aviation gasoline component by twen-
   44  ty fifty-fifths; the total of all taxes, penalties and  interest,  after
   45  refunds  and  reimbursements,  which are derived from the nonautomotive-
   46  type diesel motor fuel component (excluding taxes, penalties and  inter-
   47  est  which  are derived from product with respect to which the credit or
   48  reimbursement provided by section three hundred one-d is taken) by twen-
   49  ty-fiftieths; and all taxes, penalties and interest, after  refunds  and
   50  reimbursements,  which  are  derived from the residual petroleum product
   51  component (excluding taxes, penalties and  interest  which  are  derived
   52  from  product with respect to which the credit or reimbursement provided
   53  by section three  hundred  one-d  is  taken)  by  twenty-fortieths.  The
   54  products  of  the  foregoing multiplications shall be added together and
   55  the resulting sum of such products shall be compared with the  total  of
   56  the  amounts  initially distributed during such fiscal year with respect

       S. 6295                            121                           A. 9295

    1  to such components (excluding receipts derived from product with respect
    2  to which the credit or reimbursement provided by section  three  hundred
    3  one-d  is  taken  and  excluding any amount which represents a reconcil-
    4  iation  adjustment  pursuant  to this paragraph) pursuant to section one
    5  hundred seventy-one-a of  this  chapter  which  represented  thirty-five
    6  percent  of  the  total, after refunds and reimbursements, of all taxes,
    7  penalties and interest collected or received  during  such  fiscal  year
    8  under  sections  three  hundred one-a and three hundred one-e during the
    9  months of such fiscal year with respect to such components. The  commis-
   10  sioner  shall  then  certify  the amount of such difference to the comp-
   11  troller. If the amounts initially distributed in such  fiscal  year  are
   12  greater than the sum of such products, the comptroller shall withhold an
   13  amount equal to twenty-seven and three-tenths percent of such difference
   14  from  the first moneys otherwise payable to the general fund pursuant to
   15  this subdivision and shall pay such amount to  the  mass  transportation
   16  operating  assistance fund to the credit of the metropolitan mass trans-
   17  portation operating assistance account  and  the  public  transportation
   18  systems  operating assistance account thereof in the aforestated manner.
   19  If the amounts initially distributed in such fiscal year are  less  than
   20  the sum of such products, the comptroller shall withhold an amount equal
   21  to  twenty-seven  and  three-tenths  percent of such difference from the
   22  first moneys otherwise payable  to  the  mass  transportation  operating
   23  assistance  fund  pursuant to this subdivision and shall pay such amount
   24  to the general fund.
   25    When the commissioner becomes aware of changes or  modifications  with
   26  respect  to  the distribution of revenue under this article, the commis-
   27  sioner shall, as soon as  practicable,  issue  a  certification  setting
   28  forth the amount of any required adjustment. After receiving the certif-
   29  icate  of  the  commissioner  with respect to any adjustments, the comp-
   30  troller shall forthwith adjust general fund receipts and the revenues to
   31  be deposited or disposed of under this article to reflect the difference
   32  so certified by the commissioner.  The  commissioner  [of  taxation  and
   33  finance]  shall  not  be liable for any overestimate or underestimate of
   34  the amount of the distribution. Nor shall the commissioner be liable for
   35  any inaccuracy in any certificate with respect  to  the  amount  of  the
   36  distribution  or  any  required  adjustment with respect to the distrib-
   37  ution, but the commissioner shall as soon as practicable after discovery
   38  of any error adjust the next certification under this section to reflect
   39  any such error.
   40    Prior to making deposits as provided in this  subdivision,  the  comp-
   41  troller shall retain such amount as the commissioner may determine to be
   42  necessary,  subject  to  the approval of the director of the budget, for
   43  reasonable costs of the department [of taxation and finance] in adminis-
   44  tering and collecting the taxes deposited pursuant to  this  subdivision
   45  and  for  refunds  and reimbursements with respect to such taxes, out of
   46  which the comptroller shall pay any refunds or  reimbursements  of  such
   47  taxes to which taxpayers shall be entitled.
   48    §  9. Subdivision 21 of section 401 of the vehicle and traffic law, as
   49  amended by chapter 55 of the laws of 1992 and the opening  paragraph  as
   50  amended  by  section  75 of part A of chapter 56 of the laws of 1998, is
   51  amended to read as follows:
   52    21. The commissioner shall deposit daily the percentages listed  below
   53  of  all fees collected or received by the commissioner after March thir-
   54  ty-first, nineteen hundred ninety-three pursuant to certain registration
   55  fees imposed by (a) paragraph a of subdivision six, (b) all schedules of
   56  subdivision seven and (c) paragraph  a  of  subdivision  eight  of  this

       S. 6295                            122                           A. 9295

    1  section  in  a  responsible  bank, banking house or trust company, which
    2  shall pay the highest rate of interest to the state for such deposit  to
    3  the  credit  of  the comptroller on account of the dedicated highway and
    4  bridge  trust  fund established pursuant to section eighty-nine-b of the
    5  state finance law. The commissioner shall so deposit thirteen percent of
    6  all such registration fees so collected or so received after March thir-
    7  ty-first, nineteen hundred ninety-three, seventeen percent of  all  such
    8  registration  fees  so  collected  or so received after December thirty-
    9  first, nineteen hundred ninety-four, twenty percent of all  such  regis-
   10  tration  fees  so  collected or so received after December thirty-first,
   11  nineteen hundred ninety-five, twenty-eight percent of all such registra-
   12  tion fees so collected or so received after March thirty-first, nineteen
   13  hundred ninety-eight, thirty-four percent of all such registration  fees
   14  so collected or so received after June thirtieth, nineteen hundred nine-
   15  ty-eight,  and  forty-five and five-tenths percent of all such registra-
   16  tion fees so collected or so received after January thirty-first,  nine-
   17  teen  hundred  ninety-nine.  Every  bank, banking house or trust company
   18  that accepts such deposits shall execute and file in the office  of  the
   19  department of audit and control an undertaking to the state, in the sum,
   20  and  with such sureties, as are required and approved by the comptroller
   21  for the safe keeping and prompt payment on legal demand therefor of  all
   22  such  moneys held by or on deposit in such bank, banking house, or trust
   23  company, with interest thereon on daily balances at  such  rate  as  the
   24  comptroller  may fix. Every such undertaking shall have endorsed thereon
   25  or annexed thereto the approval of the attorney general as to its form.
   26    The commissioner shall deposit daily the percentages listed  below  of
   27  all  fees  collected or received by the commissioner after March thirty-
   28  first, two thousand one pursuant to certain registration fees imposed by
   29  (a) paragraph a of subdivision six, (b)  all  schedules  of  subdivision
   30  seven,  and  (c)  paragraph  a of subdivision eight of this section in a
   31  responsible bank, banking house or trust company, which  shall  pay  the
   32  highest  rate of interest to the state for such deposit to the credit of
   33  the comptroller on account of the dedicated  highway  and  bridge  trust
   34  fund  established pursuant to section eighty-nine-b of the state finance
   35  law and the dedicated mass transportation trust fund established  pursu-
   36  ant  to section eighty-nine-c of the state finance law and to distribute
   37  such deposit pursuant to the provisions of subdivision  (d)  of  section
   38  three hundred one-j of the tax law. In addition to the percentages spec-
   39  ified  in  the opening paragraph of this section, the commissioner shall
   40  so deposit twenty-three and five-tenths percent of all such registration
   41  fees so collected or so received after March thirty-first, two  thousand
   42  one and fifty-four and five-tenths percent of all such registration fees
   43  so  collected or so received after March thirty-first, two thousand two.
   44  Every bank, banking house or trust company that  accepts  such  deposits
   45  shall  execute  and  file  in  the office of the department of audit and
   46  control an undertaking to the state, in the sum, and with such sureties,
   47  as are required and approved by the comptroller for the safe keeping and
   48  prompt payment on legal demand therefor of all such moneys held by or in
   49  deposit in such bank, banking house  or  trust  company,  with  interest
   50  thereon on daily balances at such rate as the comptroller may fix. Every
   51  such  undertaking  shall  have  endorsed  thereon or annexed thereto the
   52  approval of the attorney general as to its form.
   53    Of the revenues so deposited, the  comptroller  shall  retain  in  his
   54  hands  such amount as the commissioner may determine to be necessary for
   55  refunds or reimbursements of the fees collected or received pursuant  to
   56  (a)  paragraph  a  of  subdivision six, (b) all schedules of subdivision

       S. 6295                            123                           A. 9295

    1  seven and (c) paragraph a of subdivision eight of this section to  which
    2  registrants  shall be entitled under the provisions of this article, out
    3  of which amount the commissioner shall pay any refunds or reimbursements
    4  of  the fees collected or received pursuant to (a) paragraph a of subdi-
    5  vision six, (b) all schedules of subdivision seven and (c)  paragraph  a
    6  of subdivision eight of this section to which registrants shall be enti-
    7  tled  under such provisions. The comptroller, after reserving the amount
    8  to pay such refunds or reimbursements, shall, on or before the last  day
    9  of  each  month,  deposit the balance of the revenue so deposited during
   10  such month into the dedicated highway and bridge trust fund  established
   11  pursuant to section eighty-nine-b of the state finance law and the dedi-
   12  cated  mass  transportation  trust  fund established pursuant to section
   13  eighty-nine-c of the state finance law.
   14    § 10. Notwithstanding any other law, rule or regulation to the contra-
   15  ry, the comptroller is hereby authorized  and  directed  to  deposit  in
   16  equal  monthly installments and distribute pursuant to the provisions of
   17  subdivision (d) of section 301-j of the tax law amounts listed below  to
   18  the  credit of the dedicated highway and bridge trust fund and the dedi-
   19  cated mass transportation trust fund from taxes now deposited  into  the
   20  general  fund  pursuant  to  provisions  of the vehicle and traffic law:
   21  twenty-five million six hundred thousand  dollars  from  April  1,  2002
   22  through March 31, 2003, sixty-two million three hundred thousand dollars
   23  from  April  1,  2003  though March 31, 2004, and one hundred sixty-four
   24  million five hundred thousand dollars from April 1, 2004  through  March
   25  31, 2005 and the same amount each year thereafter.
   26    §  11.     Paragraph (a) of subdivision 3 of section 89-b of the state
   27  finance law, as amended by chapter 56 of the laws of 1993, is amended to
   28  read as follows:
   29    (a) The special obligation reserve and payment account  shall  consist
   30  (i)  of all moneys required to be deposited in the dedicated highway and
   31  bridge trust fund pursuant to the provisions  of  sections  two  hundred
   32  eighty-nine-e,  three  hundred one-j and five hundred fifteen of the tax
   33  law, section four hundred one  of  the  vehicle  and  traffic  law,  and
   34  section  thirty-one of this chapter which amends this sentence, (ii) all
   35  fees, fines or penalties collected by the commissioner of transportation
   36  pursuant to section fifty-two and subdivisions five, eight and twelve of
   37  section eighty-eight of the highway law, subdivision fifteen of  section
   38  three  hundred  eighty-five  of  the  vehicle  and  traffic law, section
   39  fifteen of this chapter, excepting moneys deposited with  the  state  on
   40  account of betterments performed pursuant to subdivision twenty-seven or
   41  subdivision thirty-five of section ten of the highway law, and (iii) any
   42  other  moneys collected therefor or credited or transferred thereto from
   43  any other fund, account or source.
   44    § 12. Sections 89 and 89-a of the state finance law are REPEALED.
   45    § 13. The closing paragraph of section  52  of  the  highway  law,  as
   46  amended  by  chapter  297  of  the  laws  of 1972, is amended to read as
   47  follows:
   48    Any person, firm or corporation violating this section shall be liable
   49  to a fine of not less than twenty-five dollars nor more than  one  thou-
   50  sand  dollars  for  each day of violation to be recovered by the commis-
   51  sioner of transportation [and paid into the state treasury to the credit
   52  of the capital  construction  fund].    All  fees,  fines  or  penalties
   53  collected  or  recovered  by  the  commissioner pursuant to this section
   54  shall be deposited  by  the  comptroller  into  the  special  obligation
   55  reserve  and  payment  account of the dedicated highway and bridge trust
   56  fund established pursuant to section eighty-nine-b of the state  finance

       S. 6295                            124                           A. 9295

    1  law, excepting monies deposited with the state on account of betterments
    2  performed  pursuant  to  subdivision twenty-seven or subdivision thirty-
    3  five of section ten of this chapter.
    4    §  14. Subdivision 15 of section 385 of the vehicle and traffic law is
    5  amended by adding a new paragraph (i) to read as follows:
    6    (i) All moneys collected by the commissioner of transportation  pursu-
    7  ant  to  this subdivision shall be deposited by the comptroller into the
    8  special obligation reserve and payment account of the dedicated  highway
    9  and  bridge  trust fund established pursuant to section eighty-nine-b of
   10  the state finance law.
   11    § 15. Section 15 of the state finance law is amended by adding  a  new
   12  subdivision 6 to read as follows:
   13    6.  All  fees collected by the commissioner of transportation pursuant
   14  to the provisions of this section shall be deposited by the  comptroller
   15  into the special obligation reserve and payment account of the dedicated
   16  highway  and  bridge  trust fund established pursuant to section eighty-
   17  nine-b of this chapter.
   18    § 16. This act shall take effect immediately; provided, however, that:
   19    (a) section eight of this act shall take effect on the  same  date  as
   20  section  6  of  part  H  of chapter 407 of the laws of 1999, as amended,
   21  takes effect.
   22    (b) sections eleven, thirteen, fourteen and fifteen of this act  shall
   23  take effect April 1, 2000.
   24    (c) section twelve of this act shall take effect April 1, 2003.
         REPEAL  NOTE.--Sections 89 and 89-a of the state finance law, proposed
       to be repealed by section twelve of this act,  establish,  respectively,
       the emergency highway reconditioning and preservation fund and the emer-
       gency highway construction and reconstruction fund.
   25    § 2. Severability clause. If any clause, sentence, paragraph, subdivi-
   26  sion,  section  or  part  contained  in  any  part  of this act shall be
   27  adjudged by any court of competent  jurisdiction  to  be  invalid,  such
   28  judgment  shall not affect, impair, or invalidate the remainder thereof,
   29  but shall be confined in its operation to the  clause,  sentence,  para-
   30  graph,  subdivision,  section  or  part  contained  in  any part thereof
   31  directly involved in the controversy in which such judgment  shall  have
   32  been rendered. It is hereby declared to be the intent of the legislature
   33  that  this  act  would have been enacted even if such invalid provisions
   34  had not been included herein.
   35    § 3. This act shall take effect immediately  provided,  however,  that
   36  the  applicable effective date of Parts A through S of this act shall be
   37  as specifically set forth in the last section of such Parts.