S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
           S. 2609                                                  A. 3009
                             S E N A T E - A S S E M B L Y
                                   January 22, 2013
                                      ___________
       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 by the Governor 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, in relation to the temporary metropolitan
         transportation business tax surcharge (Part A); to amend the tax  law,
         in  relation to the empire state film production credit and the empire
         state film post production credit; and to amend part Y-1 of chapter 57
         of the laws of 2009 amending the tax law relating to the empire  state
         film  production credit, in relation to reports (Part B); to amend the
         economic development law, the tax law and the administrative  code  of
         the  city  of New York, in relation to establishing the New York inno-
         vation hot spot program (Part C); to amend the tax law and the  admin-
         istrative  code  of the city of New York, in relation to extending for
         three years the charitable contributions  deduction  limitation  (Part
         D);  to  amend  the tax law and the administrative code of the city of
         New York, in relation to the exclusion  of  certain  royalty  payments
         from  the  entire  net  income or other taxable basis of corporations,
         banking corporations, and insurance corporations, from  the  unrelated
         business income of corporations, and from the adjusted gross income of
         individual  taxpayers; and to repeal certain provisions of the tax law
         relating thereto (Part E); to amend the tax law, in  relation  to  the
         historic  preservation  tax  credit (Part F); to amend the tax law, in
         relation to providing a tax credit  for  electric  vehicle  recharging
         property  (Part  G);  to amend chapter 61 of the laws of 2011 amending
         the real property tax law and  other  laws  relating  to  establishing
         standards for electronic real property tax administration, in relation
         to  making  permanent,  provisions  relating  to  mandatory electronic
         filing of tax documents and improving  sales  tax  compliance  and  to
         repeal  certain  provisions of the tax law and the administrative code
         of the city of New York relating thereto (Part H); to  amend  the  tax
         law,  in  relation to exempting sales made at a Taste-NY facility from
         sales and compensating use taxes; and to amend the alcoholic  beverage
         control  law,  in relation to allowing sales of all types of alcoholic
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD12574-01-3
       S. 2609                             2                            A. 3009
         beverages at a Taste-NY facility (Part I); to amend the general munic-
         ipal law and the public authorities law,  in  relation  to  industrial
         development  agencies  and authorities (Part J); to amend the tax law,
         in  relation  to  expanding  the  exemption of CNG in the sales tax to
         include natural gas purchased and used to produce CNG for  use  exclu-
         sively  and  directly  in  the  engine of a motor vehicle (Part K); to
         amend the  tax  law,  in  relation  to  allowing  voluntary  ambulance
         services,  fire companies, fire departments and rescue squads to claim
         reimbursement of the petroleum business tax for  fuel  used  in  their
         vehicles  (Part  L); to amend the tax law, in relation to the power of
         the commissioner of taxation and finance to refuse to issue a  certif-
         icate of authority to collect the sales and use taxes and the power of
         the  commissioner of taxation and finance to revoke such a certificate
         once granted and penalties related to  the  operation  of  a  business
         without  such  certificate (Part M); to amend the tax law, in relation
         to allowing the department of taxation and finance to refuse a certif-
         icate of registration to retail  dealers  of  cigarettes  and  tobacco
         products  if  such  dealers  have certain tax liabilities or have been
         convicted of a tax crime within one year of applying for or renewing a
         certificate of registration  (Part  N);  to  amend  the  tax  law,  in
         relation to increasing the penalty for the possession of unstamped and
         unlawfully  stamped  cigarettes  (Part  O);  to amend the tax law, the
         vehicle and traffic law and the insurance  law,  in  relation  to  the
         suspension  of  drivers' licenses of persons who are delinquent in the
         payment of past-due tax liabilities (Part P); to amend the tax law, in
         relation to serving an income execution with respect to individual tax
         debtors without filing a warrant (Part Q); to amend the  tax  law,  in
         relation to the authority of counties to impose sales and compensating
         use  taxes pursuant to the authority of article 29 of such law; and to
         repeal certain provisions of sections 1210 and 1224 and section 1210-E
         of such law relating thereto (Part  R);  to  amend  the  tax  law,  in
         relation  to a keno style lottery game (Part S); to amend the tax law,
         in relation to vendor fees paid to vendor  tracks  (Part  T);  and  to
         amend  the  racing, pari-mutuel wagering and breeding law, in relation
         to licenses for simulcast facilities, sums relating  to  track  simul-
         cast,  simulcast  of  out-of-state thoroughbred races, simulcasting of
         races run by out-of-state harness tracks and distributions of  wagers;
         to  amend  chapter 281 of the laws of 1994, amending the racing, pari-
         mutuel wagering and breeding law and other laws relating to simulcast-
         ing and chapter 346 of the laws of 1990, amending the racing, pari-mu-
         tuel wagering and breeding law and other laws relating to simulcasting
         and the imposition of certain taxes, in relation to  making  permanent
         certain  provisions thereof; to amend the racing, pari-mutuel wagering
         and breeding law, in relation to making permanent  certain  provisions
         thereof;  and  to  repeal subdivision 5 of section 1012 of the racing,
         pari-mutuel wagering and breeding law relating to  telephone  accounts
         and  telephone  wagering  and  section 1014 of the racing, pari-mutuel
         wagering and breeding law relating  to  simulcasting  of  out-of-state
         thoroughbred races (Part U)
         THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
       BLY, 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 2013-2014
       S. 2609                             3                            A. 3009
    1  state  fiscal  year.  Each  component  is wholly contained within a Part
    2  identified as Parts A through U. The effective date for each  particular
    3  provision contained within such Part is set forth in the last section of
    4  such Part. Any provision in any section contained within a Part, includ-
    5  ing the effective date of the Part, which makes a reference to a section
    6  "of  this  act", when used in connection with that particular component,
    7  shall be deemed to mean and refer to the corresponding  section  of  the
    8  Part  in  which  it  is  found. Section three of this act sets forth the
    9  general effective date of this act.
   10                                   PART A
   11    Section 1. Subdivision 1 of section 183-a of the tax law,  as  amended
   12  by  section 1 of part II-1 of chapter 57 of the laws of 2008, is amended
   13  to read as follows:
   14    1. The term "corporation" as used in this  section  shall  include  an
   15  association,  within the meaning of paragraph three of subsection (a) of
   16  section seventy-seven hundred one of the internal revenue code  (includ-
   17  ing  a limited liability company), a publicly traded partnership treated
   18  as a corporation for purposes of the internal revenue code  pursuant  to
   19  section seventy-seven hundred four thereof and any business conducted by
   20  a  trustee  or  trustees  wherein  interest or ownership is evidenced by
   21  certificates or other written  instruments.  Every  corporation,  joint-
   22  stock  company  or  association formed for or principally engaged in the
   23  conduct of canal, steamboat, ferry (except  a  ferry  company  operating
   24  between any of the boroughs of the city of New York under a lease grant-
   25  ed  by  the  city),  express,  navigation,  pipe line, transfer, baggage
   26  express, omnibus, taxicab, telegraph, or telephone business,  or  formed
   27  for  or  principally  engaged  in  the conduct of two or more such busi-
   28  nesses, and every corporation, joint-stock company or association formed
   29  for or principally engaged in the conduct of  a  railroad,  palace  car,
   30  sleeping  car  or trucking business or formed for or principally engaged
   31  in the conduct of two or more of such businesses and which has  made  an
   32  election pursuant to subdivision ten of section one hundred eighty-three
   33  of  this  article,  and  every other corporation, joint-stock company or
   34  association principally engaged in the conduct of  a  transportation  or
   35  transmission  business,  except  a  corporation,  joint-stock company or
   36  association formed for or principally engaged in the conduct of a  rail-
   37  road,  palace  car,  sleeping  car or trucking business or formed for or
   38  principally engaged in the conduct of two or more of such businesses and
   39  which has not made the election  provided  for  in  subdivision  ten  of
   40  section  one  hundred  eighty-three of this article, and except a corpo-
   41  ration, joint-stock company or association principally  engaged  in  the
   42  conduct  of aviation (including air freight forwarders acting as princi-
   43  pal and like indirect air carriers) and except a corporation principally
   44  engaged in providing telecommunication  services  between  aircraft  and
   45  dispatcher,  aircraft  and  air  traffic  control  or ground station and
   46  ground station (or any combination of the foregoing),  at  least  ninety
   47  percent  of  the voting stock of which corporation is owned, directly or
   48  indirectly, by air carriers and which corporation's  principal  function
   49  is  to  fulfill  the  requirements  of (i) the federal aviation adminis-
   50  tration (or the successor  thereto)  or  (ii)  the  international  civil
   51  aviation organization (or the successor thereto), relating to the exist-
   52  ence of a communication system between aircraft and dispatcher, aircraft
   53  and  air  traffic  control  or ground station and ground station (or any
   54  combination of the foregoing) for the purposes of air safety and naviga-
       S. 2609                             4                            A. 3009
    1  tion and except a corporation, joint-stock company or association  which
    2  is  liable  to  taxation under article thirty-two of this chapter, shall
    3  pay for the privilege of exercising its corporate franchise, or of doing
    4  business,  or  of employing capital, or of owning or leasing property in
    5  the metropolitan commuter transportation district in such  corporate  or
    6  organized  capacity, or of maintaining an office in such district, a tax
    7  surcharge for all or any part of its years commencing on or after  Janu-
    8  ary  first, nineteen hundred eighty-two but ending before December thir-
    9  ty-first, two thousand [thirteen]  EIGHTEEN,  which  tax  surcharge,  in
   10  addition  to the tax imposed by section one hundred eighty-three of this
   11  article, shall be computed at the rate of eighteen percent  of  the  tax
   12  imposed  under  such  section one hundred eighty-three for such years or
   13  any part of such years ending  before  December  thirty-first,  nineteen
   14  hundred eighty-three after the deduction of any credits otherwise allow-
   15  able under this article, and at the rate of seventeen percent of the tax
   16  imposed  under  such  section  for  such years or any part of such years
   17  ending on or after December thirty-first, nineteen hundred  eighty-three
   18  after  the deduction of any credits otherwise allowable under this arti-
   19  cle; provided, however, that  such  rates  of  tax  surcharge  shall  be
   20  applied  only  to  that  portion  of  the  tax imposed under section one
   21  hundred eighty-three of this article after the deduction of any  credits
   22  otherwise  allowable  under  this  article  which is attributable to the
   23  taxpayer's business activity carried on within the metropolitan commuter
   24  transportation district as so determined in the manner prescribed by the
   25  rules and regulations promulgated by  the  commissioner;  and  provided,
   26  further,  that  the  tax  surcharge imposed by this section shall not be
   27  imposed upon any taxpayer for more than [three] FOUR  hundred  [seventy-
   28  two] THIRTY-TWO months.
   29    S  2.  The  opening paragraph of subdivision 1 of section 184-a of the
   30  tax law, as amended by section 2 of part II-1 of chapter 57 of the  laws
   31  of 2008, is amended to read as follows:
   32    The  term "corporation" as used in this section shall include an asso-
   33  ciation, within the meaning of paragraph  three  of  subsection  (a)  of
   34  section  seventy-seven hundred one of the internal revenue code (includ-
   35  ing a limited liability company),  and  a  publicly  traded  partnership
   36  treated  as  a  corporation  for  purposes  of the internal revenue code
   37  pursuant to section seventy-seven hundred four thereof.    Every  corpo-
   38  ration,  joint-stock  company  or  association formed for or principally
   39  engaged in the conduct of canal, steamboat, ferry (except a ferry compa-
   40  ny operating between any of the boroughs of the city of New York under a
   41  lease granted by the city), express, navigation,  pipe  line,  transfer,
   42  baggage  express,  omnibus,  taxicab, telegraph or local telephone busi-
   43  ness, or formed for or principally engaged in the conduct of two or more
   44  such businesses, and every corporation, joint-stock company  or  associ-
   45  ation  formed  for  or  principally  engaged in the conduct of a surface
   46  railroad, whether or not operated by steam,  subway  railroad,  elevated
   47  railroad,  palace  car, sleeping car or trucking business or principally
   48  engaged in the conduct of two or more such businesses and which has made
   49  an election pursuant to subdivision ten of section one  hundred  eighty-
   50  three  of this article, and every other corporation, joint-stock company
   51  or association formed for or principally engaged in  the  conduct  of  a
   52  transportation  or  transmission  business (other than a telephone busi-
   53  ness) except a corporation, joint-stock company  or  association  formed
   54  for or principally engaged in the conduct of a surface railroad, whether
   55  or  not  operated  by  steam, subway railroad, elevated railroad, palace
   56  car, sleeping car or trucking business or  principally  engaged  in  the
       S. 2609                             5                            A. 3009
    1  conduct  of  two  or  more  such  businesses  and which has not made the
    2  election provided for in subdivision ten of section one hundred  eighty-
    3  three  of this article, and except a corporation, joint-stock company or
    4  association  principally  engaged  in the conduct of aviation (including
    5  air freight forwarders acting as principal and like indirect air  carri-
    6  ers)  and except a corporation principally engaged in providing telecom-
    7  munication services between aircraft and dispatcher,  aircraft  and  air
    8  traffic control or ground station and ground station (or any combination
    9  of  the foregoing), at least ninety percent of the voting stock of which
   10  corporation is owned, directly or indirectly, by air carriers and  which
   11  corporation's  principal  function is to fulfill the requirements of (i)
   12  the federal aviation administration (or the successor thereto)  or  (ii)
   13  the  international  civil aviation organization (or the successor there-
   14  to), relating  to  the  existence  of  a  communication  system  between
   15  aircraft  and  dispatcher,  aircraft  and  air traffic control or ground
   16  station and ground station (or any combination of the foregoing) for the
   17  purposes of air safety and navigation and except a  corporation,  joint-
   18  stock  company  or association which is liable to taxation under article
   19  thirty-two of this chapter, shall pay for the  privilege  of  exercising
   20  its  corporate franchise, or of doing business, or of employing capital,
   21  or of owning or leasing property in the metropolitan commuter  transpor-
   22  tation district in such corporate or organized capacity, or of maintain-
   23  ing  an  office in such district, a tax surcharge for all or any part of
   24  its taxable years commencing on or after January first, nineteen hundred
   25  eighty-two, but ending before December thirty-first, two thousand [thir-
   26  teen] EIGHTEEN, which tax surcharge, in addition to the tax  imposed  by
   27  section  one  hundred  eighty-four of this article, shall be computed at
   28  the rate of eighteen percent of the tax imposed under such  section  one
   29  hundred  eighty-four  for such taxable years or any part of such taxable
   30  years ending before December thirty-first, nineteen hundred eighty-three
   31  after the deduction of any credits otherwise allowable under this  arti-
   32  cle,  and at the rate of seventeen percent of the tax imposed under such
   33  section for such taxable years or any part of such taxable years  ending
   34  on  or  after December thirty-first, nineteen hundred eighty-three after
   35  the deduction of any credits otherwise  allowable  under  this  article;
   36  provided,  however,  that  such  rates of tax surcharge shall be applied
   37  only to that portion of the tax imposed under section one hundred eight-
   38  y-four of this article after the  deduction  of  any  credits  otherwise
   39  allowable  under  this  article  which is attributable to the taxpayer's
   40  business activity carried on within the metropolitan commuter  transpor-
   41  tation  district;  and provided, further, that the tax surcharge imposed
   42  by this section on corporations, joint-stock companies and  associations
   43  formed  for  or principally engaged in the conduct of telephone or tele-
   44  graph business shall be computed in accordance with this subdivision and
   45  paragraph (c) of subdivision two of this section as if  the  three-quar-
   46  ters  of  one  percent  rate  of  tax provided for in subdivision one of
   47  section one hundred eighty-four of this article were applicable to  such
   48  telephone  and  telegraph  businesses for taxable years commencing on or
   49  after January first, nineteen  hundred  eighty-five  and  ending  on  or
   50  before   December   thirty-first,   nineteen  hundred  eighty-nine;  and
   51  provided, further, that the tax surcharge imposed by this section  shall
   52  not  be  imposed  upon  any  taxpayer for more than [three] FOUR hundred
   53  [seventy-two] THIRTY-TWO months. Provided,  however,  that  for  taxable
   54  years  beginning  in  two  thousand and thereafter, for purposes of this
   55  subdivision the tax imposed under section  one  hundred  eighty-four  of
   56  this  article shall be deemed to have been imposed at the rate of three-
       S. 2609                             6                            A. 3009
    1  quarters of one percent, except that  in  the  case  of  a  corporation,
    2  joint-stock  company  or association which has made an election pursuant
    3  to subdivision ten of section one hundred eighty-three of this  article,
    4  for  purposes  of  this  subdivision  the  tax imposed under section one
    5  hundred eighty-four of this article shall be deemed to have been imposed
    6  at the rate of six-tenths of one percent.
    7    S 3. Subparagraph 1 of paragraph (a) of subdivision 1 of section 186-c
    8  of the tax law, as amended by section 3 of part II-1 of  chapter  57  of
    9  the laws of 2008, is amended to read as follows:
   10    (1)  Every  utility doing business in the metropolitan commuter trans-
   11  portation district shall pay a tax surcharge, in  addition  to  the  tax
   12  imposed  by section one hundred eighty-six-a of this article, for all or
   13  any parts of its taxable years commencing on  or  after  January  first,
   14  nineteen hundred eighty-two but ending before December thirty-first, two
   15  thousand  [thirteen]  EIGHTEEN,  to  be computed at the rate of eighteen
   16  percent of the tax imposed under section  one  hundred  eighty-six-a  of
   17  this  article  for  such taxable years or any part of such taxable years
   18  ending before December thirty-first, nineteen hundred eighty-three after
   19  the deduction of any credits otherwise allowable under this article, and
   20  at the rate of seventeen percent of the tax imposed under  such  section
   21  for  such  taxable  years or any part of such taxable years ending on or
   22  after December thirty-first, nineteen  hundred  eighty-three  after  the
   23  deduction  of  credits otherwise allowable under this article except any
   24  utility credit provided for  by  article  thirteen-A  of  this  chapter;
   25  provided,  however,  that  such  rates of tax surcharge shall be applied
   26  only to that portion of the tax imposed under section one hundred eight-
   27  y-six-a of this article after the deduction of credits otherwise  allow-
   28  able under this article, except any utility credit provided for by arti-
   29  cle  thirteen-A of this chapter, which is attributable to the taxpayer's
   30  gross income or gross operating income from business activity carried on
   31  within the metropolitan commuter transportation district; and  provided,
   32  further,  that  the  tax  surcharge imposed by this section shall not be
   33  imposed upon any taxpayer for more than [three] FOUR  hundred  [seventy-
   34  two] THIRTY-TWO months.
   35    S  4.  Subdivision  1  of  section 209-B of the tax law, as amended by
   36  section 4 of part II-1 of chapter 57 of the laws of 2008, is amended  to
   37  read as follows:
   38    1.  For  the  privilege  of  exercising its corporate franchise, or of
   39  doing business, or of employing capital, or of owning or leasing proper-
   40  ty in a corporate or organized capacity, or of maintaining an office  in
   41  the  metropolitan  commuter transportation district, for all or any part
   42  of its taxable year, there is hereby imposed on every corporation, other
   43  than a New York S corporation, subject to tax under section two  hundred
   44  nine  of  this  article,  or any receiver, referee, trustee, assignee or
   45  other fiduciary, or any officer or agent appointed  by  any  court,  who
   46  conducts  the  business  of  any such corporation, for the taxable years
   47  commencing on or after January first, nineteen  hundred  eighty-two  but
   48  ending before December thirty-first, two thousand [thirteen] EIGHTEEN, a
   49  tax  surcharge, in addition to the tax imposed under section two hundred
   50  nine of this article, to be computed at the rate of eighteen percent  of
   51  the  tax  imposed  under  such section two hundred nine for such taxable
   52  years or any part of such taxable years ending before  December  thirty-
   53  first,  nineteen hundred eighty-three after the deduction of any credits
   54  otherwise allowable under this article, and at  the  rate  of  seventeen
   55  percent  of the tax imposed under such section for such taxable years or
   56  any part of such taxable years ending on or after December thirty-first,
       S. 2609                             7                            A. 3009
    1  nineteen hundred eighty-three after the deduction of any credits  other-
    2  wise allowable under this article; provided, however, that such rates of
    3  tax  surcharge  shall be applied only to that portion of the tax imposed
    4  under  section  two  hundred nine of this article after the deduction of
    5  any credits otherwise allowable under this article which is attributable
    6  to the taxpayer's business activity carried on within  the  metropolitan
    7  commuter  transportation  district;  and provided, further, that the tax
    8  surcharge imposed by this section shall not be imposed upon any taxpayer
    9  for more than [three]  FOUR  hundred  [seventy-two]  THIRTY-TWO  months.
   10  Provided  however,  that  for  taxable years commencing on or after July
   11  first, nineteen hundred ninety-eight, such surcharge shall be calculated
   12  as if the tax imposed under section two hundred ten of this article were
   13  imposed under the law in effect for taxable years commencing on or after
   14  July first, nineteen hundred ninety-seven and before July  first,  nine-
   15  teen  hundred  ninety-eight.  Provided  however,  that for taxable years
   16  commencing on or after January first, two thousand seven, such surcharge
   17  shall be calculated using the highest of the tax bases imposed  pursuant
   18  to  paragraphs  (a),  (b),  (c) or (d) of subdivision one of section two
   19  hundred ten of this article and the amount imposed under  paragraph  (e)
   20  of  subdivision  one  of  such  section two hundred ten, for the taxable
   21  year; and, provided further that, if such highest amount is the tax base
   22  imposed under paragraph (a), (b) or (c) of such  subdivision,  then  the
   23  surcharge  shall  be  computed as if the tax rates and limitations under
   24  such paragraph were the tax rates and limitations under  such  paragraph
   25  in  effect for taxable years commencing on or after July first, nineteen
   26  hundred ninety-seven and before July  first,  nineteen  hundred  ninety-
   27  eight.
   28    S  5.  Subsection  1  of  section 1455-B of the tax law, as amended by
   29  section 5 of part II-1 of chapter 57 of the laws of 2008, is amended  to
   30  read as follows:
   31    1.  For the privilege of exercising its franchise or doing business in
   32  the metropolitan commuter transportation  district  in  a  corporate  or
   33  organized capacity, there is hereby imposed on every taxpayer subject to
   34  tax  under  this  article,  other than a New York S corporation, for the
   35  taxable years commencing on or after  January  first,  nineteen  hundred
   36  eighty-two  but ending before December thirty-first, two thousand [thir-
   37  teen] EIGHTEEN, a tax surcharge, in addition to the  tax  imposed  under
   38  section fourteen hundred fifty-one of this article, at the rate of eigh-
   39  teen  percent  of  the  tax  imposed under such section fourteen hundred
   40  fifty-one of this article, for such taxable years or any  part  of  such
   41  taxable  years  ending  before  December  thirty-first, nineteen hundred
   42  eighty-three after the deduction  of  any  credits  otherwise  allowable
   43  under  this  article,  and  at  the rate of seventeen percent of the tax
   44  imposed under such section for such taxable years or any  part  of  such
   45  taxable years ending on or after December thirty-first, nineteen hundred
   46  eighty-three  after  the  deduction  of  any credits otherwise allowable
   47  under this article; provided however, that such rates of  tax  surcharge
   48  shall  be  applied only to that portion of the tax imposed under section
   49  fourteen hundred fifty-one of this article after the  deduction  of  any
   50  credits  otherwise allowable under this article which is attributable to
   51  the taxpayer's business activity  carried  on  within  the  metropolitan
   52  commuter  transportation  district;  and provided, further, that the tax
   53  surcharge imposed by this section shall not be imposed upon any taxpayer
   54  for more than [three]  FOUR  hundred  [seventy-two]  THIRTY-TWO  months.
   55  Provided  however,  that  for  taxable years commencing on or after July
   56  first, two thousand, such surcharge shall be calculated as if  the  rate
       S. 2609                             8                            A. 3009
    1  of  the  basic  tax  computed  under  subsection (a) of section fourteen
    2  hundred fifty-five of this article was nine percent.
    3    S  6.  Paragraphs  1 and 3 of subdivision (a) of section 1505-a of the
    4  tax law, as amended by section 6 of part II-1 of chapter 57 of the  laws
    5  of 2008, are amended to read as follows:
    6    (1)  Every  domestic  insurance corporation and every foreign or alien
    7  insurance corporation, and every life insurance corporation described in
    8  subdivision (b) of section fifteen hundred one of this article, for  the
    9  privilege  of  exercising its corporate franchise, or of doing business,
   10  or of employing capital, or of owning or leasing property in the  metro-
   11  politan  commuter  transportation  district  in a corporate or organized
   12  capacity, or of maintaining  an  office  in  the  metropolitan  commuter
   13  transportation  district,  for  all  or  any  part  of its taxable years
   14  commencing on or after January first, nineteen hundred  eighty-two,  but
   15  ending  before  December thirty-first, two thousand [thirteen] EIGHTEEN,
   16  except corporations specified in  subdivision  (c)  of  section  fifteen
   17  hundred  twelve  of this article, shall annually pay, in addition to the
   18  taxes otherwise imposed by this article, a tax surcharge  on  the  taxes
   19  imposed  under this article after the deduction of any credits otherwise
   20  allowable under this article as allocated to such district.  Such  taxes
   21  shall  be  allocated to such district for purposes of computing such tax
   22  surcharge upon taxpayers subject to tax under subdivision (b) of section
   23  fifteen hundred ten of this article by applying the methodology,  proce-
   24  dures  and computations set forth in subdivisions (a) and (b) of section
   25  fifteen hundred four of this article, except that  references  to  terms
   26  denoting  New York premiums, and total wages, salaries, personal service
   27  compensation and commissions within New York shall be read  as  denoting
   28  within  the  metropolitan  commuter  transportation  district  and terms
   29  denoting total premiums and  total  wages,  salaries,  personal  service
   30  compensation and commissions shall be read as denoting within the state.
   31  If it shall appear to the commissioner that the application of the meth-
   32  odology,  procedures and computations set forth in such subdivisions (a)
   33  and (b) does not properly reflect the activity, business or income of  a
   34  taxpayer  within the metropolitan commuter transportation district, then
   35  the commissioner shall be authorized, in the commissioner's  discretion,
   36  to  adjust such methodology, procedures and computations for the purpose
   37  of allocating such taxes by:
   38    (A) excluding one or more factors therein;
   39    (B) including one or more other factors  therein,  such  as  expenses,
   40  purchases,  receipts  other  than  premiums,  real  property or tangible
   41  personal property; or
   42    (C) any other similar or different method which allocates  such  taxes
   43  by  attributing a fair and proper portion of such taxes to the metropol-
   44  itan commuter transportation district. The  commissioner  from  time  to
   45  time  shall  publish all rulings of general public interest with respect
   46  to any application of the provisions  of  the  preceding  sentence.  The
   47  commissioner  may  promulgate rules and regulations to further implement
   48  the provisions of this section.
   49    (3) Such tax surcharge shall be  computed  at  the  rate  of  eighteen
   50  percent  of  the  taxes  imposed  under sections fifteen hundred one and
   51  fifteen hundred ten of  this  article  as  limited  by  section  fifteen
   52  hundred  five  of  this article, as allocated to such district, for such
   53  taxable years or any part of such taxable years ending  before  December
   54  thirty-first,  nineteen  hundred eighty-three after the deduction of any
   55  credits otherwise allowable under this article, at the rate of seventeen
   56  percent of the taxes imposed under such sections as limited  by  section
       S. 2609                             9                            A. 3009
    1  fifteen hundred five of this article, as allocated to such district, for
    2  such  taxable years or any part of such taxable years ending on or after
    3  December thirty-first, nineteen hundred eighty-three and before  January
    4  first,  two  thousand three after the deduction of any credits otherwise
    5  allowable under this article, and at the rate of  seventeen  percent  of
    6  the  taxes  imposed  under sections fifteen hundred one, fifteen hundred
    7  two-a, and fifteen hundred ten of this article, as limited or  otherwise
    8  determined  by subdivision (a) or (b) of section fifteen hundred five of
    9  this article, as allocated to such district, for such taxable  years  or
   10  any  part  of such taxable years ending after December thirty-first, two
   11  thousand two after the deduction  of  any  credits  otherwise  allowable
   12  under this article; provided, however, that the tax surcharge imposed by
   13  this  section  shall  not  be  imposed  upon  any taxpayer for more than
   14  [three] FOUR hundred [seventy-two] THIRTY-TWO months. Provided  however,
   15  that  for taxable years commencing on or after July first, two thousand,
   16  and in the case of  taxpayers  subject  to  tax  under  section  fifteen
   17  hundred  two-a  of  this  article,  for  taxable years of such taxpayers
   18  beginning on or after July first, two thousand and before January first,
   19  two thousand three, such surcharge shall be calculated  as  if  (i)  the
   20  rate  of  the  tax  computed  under  paragraph one of subdivision (a) of
   21  section fifteen hundred two of this article was nine  percent  and  (ii)
   22  the  rate  of the limitation on tax set forth in section fifteen hundred
   23  five of this article for domestic, foreign and  alien  insurance  corpo-
   24  rations  except  life  insurance  corporations  was  two  and six-tenths
   25  percent.
   26    S 7. This act shall take effect immediately.
   27                                   PART B
   28    Section 1.  Paragraph 3 of subdivision (b) of section 24  of  the  tax
   29  law,  as added by section 1 of part P of chapter 60 of the laws of 2004,
   30  is amended to read as follows:
   31    (3) "Qualified film" means a  feature-length  film,  television  film,
   32  RELOCATED TELEVISION PRODUCTION, television pilot and/or each episode of
   33  a  television  series,  regardless  of  the medium by means of which the
   34  film, pilot or episode is created or conveyed.  "Qualified  film"  shall
   35  not  include  (i)  a  documentary film, news or current affairs program,
   36  interview or  talk  program,  "how-to"  (i.e.,  instructional)  film  or
   37  program, film or program consisting primarily of stock footage, sporting
   38  event  or  sporting  program, game show, award ceremony, film or program
   39  intended primarily for industrial, corporate or institutional end-users,
   40  fundraising film or program, daytime drama (i.e., daytime "soap opera"),
   41  commercials, music videos or "reality" program, or (ii) a production for
   42  which records are required under section 2257 of title 18, United States
   43  code, to be maintained with respect to any performer in such  production
   44  (reporting  of  books,  films,  etc.  with  respect to sexually explicit
   45  conduct).
   46    S 2. Subdivision (b) of section 24 of the tax law is amended by adding
   47  a new paragraph 8 to read as follows:
   48    (8) "RELOCATED TELEVISION PRODUCTION" SHALL MEAN, NOTWITHSTANDING  THE
   49  LIMITATIONS  IN SUBPARAGRAPH (I) OF PARAGRAPH THREE OF THIS SUBDIVISION,
   50  A TELEVISION PRODUCTION THAT IS A TALK OR VARIETY PROGRAM THAT FILMED AT
   51  LEAST FIVE SEASONS OUTSIDE THE STATE PRIOR TO ITS FIRST RELOCATED SEASON
   52  IN NEW YORK, THE EPISODES ARE FILMED BEFORE A  STUDIO  AUDIENCE  OF  TWO
   53  HUNDRED  OR  MORE, AND THE RELOCATED TELEVISION PRODUCTION INCURS (I) AT
   54  LEAST THIRTY MILLION DOLLARS IN ANNUAL PRODUCTION COSTS IN THE STATE, OR
       S. 2609                            10                            A. 3009
    1  (II) AT LEAST TEN MILLION DOLLARS IN CAPITAL EXPENDITURES AT A QUALIFIED
    2  PRODUCTION FACILITY IN THE STATE.
    3    S  3.  Paragraph 4 of subdivision (e) of section 24 of the tax law, as
    4  added by chapter 268 of the laws of 2012, is amended to read as follows:
    5    (4) Additional pool 2 - The aggregate amount of tax credits allowed in
    6  subdivision (a) of this section shall  be  increased  by  an  [addition]
    7  ADDITIONAL  four hundred twenty million dollars in EACH YEAR STARTING IN
    8  two thousand ten[, four hundred twenty million dollars in  two  thousand
    9  eleven, four hundred twenty million dollars in two thousand twelve, four
   10  hundred twenty million dollars in two thousand thirteen and four hundred
   11  twenty  million  dollars  in two thousand fourteen] THROUGH TWO THOUSAND
   12  NINETEEN provided however, seven million dollars  of  the  annual  allo-
   13  cation  shall  be  available  for  the empire state film post production
   14  credit pursuant to section thirty-one of this [chapter] ARTICLE  IN  TWO
   15  THOUSAND  THIRTEEN  AND  TWO  THOUSAND  FOURTEEN AND TWENTY-FIVE MILLION
   16  DOLLARS OF THE ANNUAL ALLOCATION SHALL BE AVAILABLE FOR THE EMPIRE STATE
   17  FILM POST PRODUCTION CREDIT PURSUANT TO SECTION THIRTY-ONE OF THIS ARTI-
   18  CLE IN EACH YEAR STARTING IN TWO THOUSAND FIFTEEN THROUGH  TWO  THOUSAND
   19  NINETEEN.    This amount shall be allocated by the governor's office for
   20  motion picture and television development among taxpayers in  accordance
   21  with subdivision (a) of this section. If the [director of the governor's
   22  office  for  motion  picture and television development] COMMISSIONER OF
   23  ECONOMIC DEVELOPMENT determines that the aggregate amount of tax credits
   24  available from additional pool 2 for the empire  state  film  production
   25  tax credit have been previously allocated, and determines that the pend-
   26  ing applications from eligible applicants for the EMPIRE STATE FILM post
   27  production  tax  credit pursuant to section thirty-one of this [chapter]
   28  ARTICLE is insufficient to utilize the  balance  of  unallocated  EMPIRE
   29  STATE  FILM  post  production tax credits from such pool, the remainder,
   30  after such pending applications are considered, shall be made  available
   31  for  allocation  in  the  empire  state film tax credit pursuant to this
   32  section,  subdivision  thirty-six  of  section  two  hundred   ten   and
   33  subsection  (gg)  of  section six hundred six of this chapter.  ALSO, IF
   34  THE COMMISSIONER OF ECONOMIC DEVELOPMENT DETERMINES THAT  THE  AGGREGATE
   35  AMOUNT  OF  TAX  CREDITS AVAILABLE FROM ADDITIONAL POOL 2 FOR THE EMPIRE
   36  STATE FILM POST PRODUCTION TAX CREDIT HAVE  BEEN  PREVIOUSLY  ALLOCATED,
   37  AND  DETERMINES  THAT  THE PENDING APPLICATIONS FROM ELIGIBLE APPLICANTS
   38  FOR THE EMPIRE STATE FILM PRODUCTION TAX CREDIT PURSUANT TO THIS SECTION
   39  IS INSUFFICIENT TO UTILIZE THE BALANCE OF  UNALLOCATED  FILM  PRODUCTION
   40  TAX  CREDITS  FROM  SUCH  POOL, THEN ALL OR PART OF THE REMAINDER, AFTER
   41  SUCH PENDING APPLICATIONS ARE CONSIDERED, SHALL BE  MADE  AVAILABLE  FOR
   42  ALLOCATION  FOR THE EMPIRE STATE FILM POST PRODUCTION CREDIT PURSUANT TO
   43  THIS SECTION, SUBDIVISION FORTY-ONE  OF  SECTION  TWO  HUNDRED  TEN  AND
   44  SUBSECTION  (GG)  OF SECTION SIX HUNDRED SIX OF THIS CHAPTER. The gover-
   45  nor's office for motion picture and television development  must  notify
   46  taxpayers  of  their  allocation year and include the allocation year on
   47  the certificate of tax credit.   Taxpayers eligible to  claim  a  credit
   48  must  report  the  allocation  year  directly on their empire state film
   49  production credit tax form for each year a credit is claimed and include
   50  a copy of the certificate with their tax return. In the case of a quali-
   51  fied film that receives funds from additional pool 2,  no  empire  state
   52  film  production credit shall be claimed before the later of the taxable
   53  year the production of the qualified film is complete,  or  the  taxable
   54  year  immediately  following  the allocation year for which the film has
   55  been allocated credit by the governor's office for  motion  picture  and
   56  television development.
       S. 2609                            11                            A. 3009
    1    S  4.  Paragraph 1 of subdivision (b) of section 24 of the tax law, as
    2  amended by section 6 of part Q of chapter 57 of the  laws  of  2010,  is
    3  amended to read as follows:
    4    (1)  "Qualified  production  costs" means production costs only to the
    5  extent such costs are attributable to the use of  tangible  property  or
    6  the  performance of services within the state directly and predominantly
    7  in the production (including pre-production and post  production)  of  a
    8  qualified  film[,  provided,  however,  that  qualified production costs
    9  shall not include post production costs unless the portion of  the  post
   10  production  costs  paid  or  incurred that is attributable to the use of
   11  tangible property or the performance of services  in  New  York  in  the
   12  production of such qualified film equals or exceeds seventy-five percent
   13  of  the total post production costs spent within and without New York in
   14  the production of such qualified film].
   15    S 5. Paragraph 3 of subdivision (a) of section 31 of the tax  law,  as
   16  added  by  section  12  of  part Q of chapter 57 of the laws of 2010, is
   17  amended to read as follows:
   18    (3) (I) A taxpayer shall not be eligible for the credit established by
   19  this section FOR QUALIFIED POST PRODUCTION COSTS,  EXCLUDING  THE  COSTS
   20  FOR  VISUAL  EFFECTS AND ANIMATION, unless the qualified post production
   21  costs, EXCLUDING THE COSTS FOR VISUAL EFFECTS AND ANIMATION, at a quali-
   22  fied post production facility meet or exceed seventy-five percent of the
   23  total post production costs, EXCLUDING THE COSTS FOR VISUAL EFFECTS  AND
   24  ANIMATION, paid or incurred in the post production of the qualified film
   25  at  any post production facility.  (II) A TAXPAYER SHALL NOT BE ELIGIBLE
   26  FOR THE CREDIT ESTABLISHED BY THIS SECTION FOR QUALIFIED POST PRODUCTION
   27  COSTS WHICH ARE COSTS FOR VISUAL EFFECTS OR ANIMATION UNLESS THE  QUALI-
   28  FIED  POST  PRODUCTION COSTS FOR VISUAL EFFECTS OR ANIMATION AT A QUALI-
   29  FIED POST PRODUCTION FACILITY MEET OR EXCEED THREE  MILLION  DOLLARS  OR
   30  TWENTY  PERCENT OF THE TOTAL POST PRODUCTION COSTS FOR VISUAL EFFECTS OR
   31  ANIMATION PAID OR INCURRED IN THE POST PRODUCTION OF A QUALIFIED FILM AT
   32  ANY POST PRODUCTION FACILITY, WHICHEVER IS LESS. (III)  A  TAXPAYER  MAY
   33  CLAIM  A  CREDIT FOR QUALIFIED POST PRODUCTION COSTS EXCLUDING THE COSTS
   34  FOR VISUAL EFFECTS AND ANIMATION,  AND  FOR  QUALIFIED  POST  PRODUCTION
   35  COSTS  OF  VISUAL  EFFECTS  AND ANIMATION, PROVIDED THAT THE CRITERIA IN
   36  SUBPARAGRAPHS (I) AND (II) OF THIS PARAGRAPH  ARE  BOTH  SATISFIED.  The
   37  credit  shall be allowed for the taxable year in which the production of
   38  such qualified film is completed.
   39    S 6. Section 3 of part Y-1 of chapter 57 of the laws of 2009, amending
   40  the tax law relating to the empire  state  film  production  credit,  is
   41  amended to read as follows:
   42    S  3. A. The governor's office of motion picture and television devel-
   43  opment shall file a report on a quarterly basis with the director of the
   44  division of the budget and the chairmen of the assembly ways  and  means
   45  committee and senate finance committee. The report shall be filed within
   46  fifteen  days  after the close of the calendar quarter. The first report
   47  shall cover the calendar quarter that begins April 1, 2009.  The  report
   48  must contain the following information for the calendar quarter:
   49    (1)  the total dollar amount of credits allocated during each month of
   50  the calendar quarter, broken down by month;
   51    (2) the number of film projects which have been allocated tax  credits
   52  of less than $1 million per project and the total dollar amount of cred-
   53  its allocated to those projects;
   54    (3)  the number of film projects which have been allocated tax credits
   55  of $1 million or more but less than $5 million per project and the total
   56  dollar amount of credits allocated to those projects;
       S. 2609                            12                            A. 3009
    1    (4) the number of film projects which have been allocated tax  credits
    2  of $5 million or more per project and the total dollar amount of credits
    3  allocated to those projects; [and]
    4    (5)  a list of each film project which has been allocated a tax credit
    5  and  for  each  of  those projects (a) the estimated number of employees
    6  associated with the project, (b) the estimated qualified costs  for  the
    7  project, [and] (c) the estimated total costs of the project, AND (D) THE
    8  CREDIT-ELIGIBLE MAN HOURS FOR EACH PROJECT; AND
    9    (6)(A)  THE  NAME  OF  EACH  TAXPAYER  ALLOCATED A TAX CREDIT FOR EACH
   10  PROJECT; PROVIDED HOWEVER, IF THE TAXPAYER CLAIMS A TAX  CREDIT  BECAUSE
   11  THE  TAXPAYER IS A MEMBER OF A LIMITED LIABILITY COMPANY, A PARTNER IN A
   12  PARTNERSHIP OR A SHAREHOLDER IN A SUBCHAPTER S CORPORATION, THE NAME  OF
   13  EACH  LIMITED LIABILITY COMPANY, PARTNERSHIP OR SUBCHAPTER S CORPORATION
   14  EARNING ANY OF THOSE TAX CREDITS MUST BE INCLUDED IN THE REPORT  INSTEAD
   15  OF  INFORMATION  ABOUT  THE  TAXPAYER  CLAIMING  THE TAX CREDIT, (B) THE
   16  AMOUNT OF TAX CREDIT ALLOCATED TO EACH TAXPAYER;  PROVIDED  HOWEVER,  IF
   17  THE  TAXPAYER  CLAIMS A TAX CREDIT BECAUSE THE TAXPAYER IS A MEMBER OF A
   18  LIMITED LIABILITY COMPANY, A PARTNER IN A PARTNERSHIP OR  A  SHAREHOLDER
   19  IN  A  SUBCHAPTER S CORPORATION, THE AMOUNT OF TAX CREDIT EARNED BY EACH
   20  ENTITY MUST BE INCLUDED IN THE REPORT INSTEAD OF INFORMATION  ABOUT  THE
   21  TAXPAYER  CLAIMING  THE  TAX CREDIT, AND (C) INFORMATION IDENTIFYING THE
   22  PROJECT ASSOCIATED WITH EACH TAXPAYER FOR WHICH A TAX CREDIT WAS CLAIMED
   23  UNDER SECTION 24 OR SECTION 31, AS ADDED BY CHAPTER 57 OF  THE  LAWS  OF
   24  2010, OF THE TAX LAW, INCLUDING THE NAME OF THE FILM AND COUNTY IN WHICH
   25  THE PROJECT IS LOCATED; AND
   26    B.  THE GOVERNOR'S OFFICE OF MOTION PICTURE AND TELEVISION DEVELOPMENT
   27  SHALL FILE A REPORT ON A BIENNIAL BASIS WITH THE DIRECTOR OF  THE  DIVI-
   28  SION OF THE BUDGET AND THE CHAIRS OF THE ASSEMBLY WAYS AND MEANS COMMIT-
   29  TEE  AND  SENATE  FINANCE  COMMITTEE.  THE  REPORT SHALL BE FILED WITHIN
   30  FIFTEEN DAYS AFTER THE CLOSE OF THE  CALENDAR  YEAR.  THE  FIRST  REPORT
   31  SHALL COVER A TWO YEAR PERIOD THAT BEGINS ON JANUARY FIRST, TWO THOUSAND
   32  THIRTEEN.  THE  REPORT  MUST  BE  PREPARED BY AN INDEPENDENT THIRD PARTY
   33  AUDITOR AND INCLUDE: (1) INFORMATION REGARDING  THE  EMPIRE  STATE  FILM
   34  PRODUCTION  CREDIT  AND  POST  PRODUCTION  CREDIT PROGRAMS INCLUDING THE
   35  EFFICIENCY OF OPERATIONS, RELIABILITY OF FINANCIAL REPORTING, COMPLIANCE
   36  WITH LAWS AND REGULATIONS AND DISTRIBUTION OF ASSETS AND FUNDS;  (2)  AN
   37  ECONOMIC IMPACT STUDY PREPARED BY AN INDEPENDENT THIRD PARTY OF THE FILM
   38  CREDIT  PROGRAMS; AND (3) ANY OTHER INFORMATION AND/OR OTHER STATISTICAL
   39  INFORMATION THAT THE COMMISSIONER OF ECONOMIC DEVELOPMENT  DEEMS  TO  BE
   40  USEFUL IN ANALYZING THE EFFECTS OF THE PROGRAM.
   41    S  7.  This act shall take effect immediately, provided, however, that
   42  sections four and five of this act shall apply to  taxpayers  submitting
   43  initial  applications  to  the  governor's  office of motion picture and
   44  television development on or after the date this act shall have become a
   45  law, and to taxpayers who filed an initial application before  this  act
   46  shall  have become a law but who have not yet submitted a final applica-
   47  tion to the governor's office of motion picture and television  develop-
   48  ment  on  or  before  the date this act shall have become a law; and the
   49  amendments made to section 3 of part Y-1 of chapter 57 of  the  laws  of
   50  2009,  amending the tax law relating to the empire state film production
   51  credit, with the exception of subdivision b of such section, shall  only
   52  apply  to  taxpayers  submitting  initial applications to the governor's
   53  office of motion picture and television development on or after the date
   54  this act shall become a law.
   55                                   PART C
       S. 2609                            13                            A. 3009
    1    Section 1. Legislative intent. This act is intended to create a state-
    2  wide network of university affiliated or college affiliated and  private
    3  sector  affiliated  innovation  hot  spots  in New York state to support
    4  start-up companies and those in the  early  stage  of  development.  The
    5  mission  of  the  innovation hot spots shall be to promote job creation,
    6  entrepreneurship and technology transfer, as well as to provide  support
    7  services  to  hot  spot tenants, including, but not limited to, business
    8  planning,  management  assistance,  financial-packaging,   linkages   to
    9  financing  and  technology services, and coordination with other sources
   10  of assistance.
   11    S 2. The economic development law is amended by adding a  new  section
   12  361 to read as follows:
   13    S  361. NEW YORK INNOVATION HOT SPOT PROGRAM.  1. DEFINITIONS. AS USED
   14  IN THIS SECTION, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS:
   15    (A) "INNOVATION HOT SPOT" SHALL MEAN A FACILITY OR  FACILITIES  DESIG-
   16  NATED AS SUCH BY THE COMMISSIONER.
   17    (B) "QUALIFIED ENTITY" SHALL MEAN A BUSINESS ENTERPRISE THAT IS:
   18    (I) IN THE FORMATIVE STAGE OF DEVELOPMENT;
   19    (II) LOCATED IN NEW YORK STATE;
   20    (III) EITHER: (A) ANY CORPORATION, EXCEPT A CORPORATION WHICH:
   21    (1)  OVER FIFTY PERCENT OF THE NUMBER OF SHARES OF STOCK ENTITLING THE
   22  HOLDERS THEREOF TO VOTE FOR THE ELECTION OF  DIRECTORS  OR  TRUSTEES  IS
   23  OWNED  OR  CONTROLLED,  EITHER  DIRECTLY  OR  INDIRECTLY,  BY A TAXPAYER
   24  SUBJECT TO TAX UNDER THE FOLLOWING PROVISIONS OF THE TAX LAW:    ARTICLE
   25  NINE-A; SECTION ONE HUNDRED EIGHTY-THREE, ONE HUNDRED EIGHTY-FOUR OR ONE
   26  HUNDRED EIGHTY-FIVE OF ARTICLE NINE; ARTICLE THIRTY-TWO OR ARTICLE THIR-
   27  TY-THREE; OR
   28    (2)  IS SUBSTANTIALLY SIMILAR IN OPERATION AND IN OWNERSHIP TO A BUSI-
   29  NESS ENTITY (OR  ENTITIES)  TAXABLE  OR  PREVIOUSLY  TAXABLE  UNDER  THE
   30  FOLLOWING PROVISIONS OF THE TAX LAW: ARTICLE NINE-A; SECTION ONE HUNDRED
   31  EIGHTY-THREE, ONE HUNDRED EIGHTY-FOUR, ONE HUNDRED EIGHTY-FIVE OR FORMER
   32  SECTION  ONE  HUNDRED  EIGHTY-SIX  OF  ARTICLE NINE; ARTICLE THIRTY-TWO;
   33  ARTICLE THIRTY-THREE; ARTICLE TWENTY-THREE, OR WOULD HAVE  BEEN  SUBJECT
   34  TO TAX UNDER SUCH ARTICLE TWENTY-THREE (AS SUCH ARTICLE WAS IN EFFECT ON
   35  JANUARY  FIRST,  NINETEEN  HUNDRED  EIGHTY) OR THE INCOME (OR LOSSES) OF
   36  WHICH IS (OR WAS) INCLUDABLE UNDER ARTICLE TWENTY-TWO; OR
   37    (B) A SOLE PROPRIETORSHIP, PARTNERSHIP, LIMITED LIABILITY COMPANY,  OR
   38  NEW  YORK  SUBCHAPTER S CORPORATION THAT IS NOT SUBSTANTIALLY SIMILAR IN
   39  OPERATION AND IN OWNERSHIP TO A BUSINESS ENTITY (OR  ENTITIES)  TAXABLE,
   40  OR  PREVIOUSLY TAXABLE, UNDER ARTICLE NINE-A OF THE TAX LAW, SECTION ONE
   41  HUNDRED EIGHTY-THREE, ONE HUNDRED EIGHTY-FOUR, ONE  HUNDRED  EIGHTY-FIVE
   42  OR FORMER SECTION ONE HUNDRED EIGHTY-SIX OF ARTICLE NINE OF THE TAX LAW,
   43  ARTICLE  THIRTY-TWO OR THIRTY-THREE OF THE TAX LAW, ARTICLE TWENTY-THREE
   44  OF THE TAX LAW OR WHICH WOULD HAVE BEEN SUBJECT TO TAX UNDER SUCH  ARTI-
   45  CLE  TWENTY-THREE (AS SUCH ARTICLE WAS IN EFFECT ON JANUARY FIRST, NINE-
   46  TEEN HUNDRED EIGHTY) OR THE INCOME (OR LOSSES)  OF  WHICH  IS  (OR  WAS)
   47  INCLUDABLE UNDER ARTICLE TWENTY-TWO OF THE TAX LAW; AND
   48    (IV)  IS  APPROVED TO LOCATE IN AN INNOVATION HOT SPOT BY THE OPERATOR
   49  OF SUCH INNOVATION HOT SPOT.
   50    (C) "OPERATOR OF AN INNOVATION HOT SPOT" SHALL MEAN:
   51    (I) AN ACCREDITED POST-SECONDARY EDUCATIONAL INSTITUTION,  COLLEGE  OR
   52  UNIVERSITY;  NOT-FOR-PROFIT  ENTITY AFFILIATED WITH A HIGHER EDUCATIONAL
   53  INSTITUTION; OR, COLLABORATIVE ENTERPRISE BETWEEN ONE OR MORE ACCREDITED
   54  POST-SECONDARY  EDUCATIONAL  INSTITUTION,  COLLEGE  OR  UNIVERSITY   AND
   55  NOT-FOR-PROFIT ENTITY AFFILIATED WITH A HIGHER EDUCATIONAL INSTITUTION;
   56    (II) LOCATED IN NEW YORK STATE; AND
       S. 2609                            14                            A. 3009
    1    (III)  DESIGNATED  BY  THE  COMMISSIONER  TO  OPERATE  A FACILITY THAT
    2  PROVIDES:  LOW-COST  SPACE;  TECHNICAL  ASSISTANCE;  SUPPORT   SERVICES,
    3  INCLUDING, BUT NOT LIMITED TO, CENTRAL SERVICES; AND, EDUCATIONAL OPPOR-
    4  TUNITIES, TO A "QUALIFIED ENTITY."
    5    2. THE COMMISSIONER SHALL:
    6    (A) SOLICIT APPLICATIONS FROM POST-SECONDARY EDUCATIONAL INSTITUTIONS,
    7  COLLEGES,  UNIVERSITIES,  OR  NOT-FOR-PROFIT  ENTITIES AFFILIATED WITH A
    8  HIGHER EDUCATION INSTITUTION OR COLLABORATIVE ENTERPRISES BETWEEN ONE OR
    9  MORE ACCREDITED POST-SECONDARY EDUCATIONAL  INSTITUTIONS,  COLLEGES,  OR
   10  UNIVERSITIES  AND  NOT-FOR-PROFIT ENTITIES FOR APPROVAL TO OPERATE INNO-
   11  VATION HOT SPOTS IN PROPERTY OWNED OR LEASED BY SUCH ENTITIES TO ATTRACT
   12  INDUSTRIES WITH SIGNIFICANT POTENTIAL FOR ECONOMIC GROWTH  AND  DEVELOP-
   13  MENT  IN  NEW  YORK  STATE,  AND  IDENTIFY  TECHNOLOGICAL AREAS THAT CAN
   14  CONTRIBUTE TO THE GROWTH OF VARIOUS INDUSTRIES  LOCATED  THROUGHOUT  NEW
   15  YORK STATE;
   16    (B)  RECEIVE  RECOMMENDATIONS  FROM  THE REGIONAL ECONOMIC DEVELOPMENT
   17  COUNCILS REGARDING THE APPROVAL OR REJECTION OF THE APPLICANTS AS OPERA-
   18  TORS OF INNOVATION HOT SPOTS.
   19    3. THE COMMISSIONER SHALL ESTABLISH CRITERIA CONCERNING THE INNOVATION
   20  HOT SPOT PROGRAM.  (A) THE CRITERIA THAT APPLICANTS MUST SATISFY  TO  BE
   21  DESIGNATED AS AN OPERATOR OF AN INNOVATION HOT SPOT INCLUDE, BUT ARE NOT
   22  LIMITED TO, THE FOLLOWING:
   23    (I)  A RECORD OF, OR PLAN TO CONFORM TO, BEST PRACTICES INCLUDING, BUT
   24  NOT LIMITED TO, CLEAR POLICIES FOR THE RESIDENT  BUSINESS  ENTITIES  AND
   25  GRADUATION FROM THE SPACE;
   26    (II)  A  COMPREHENSIVE  SUITE  OF  ENTREPRENEURIAL MENTORING PRACTICES
   27  INCLUDING, BUT NOT LIMITED TO, ADVISING, COACHING, PLANNING AND CONNECT-
   28  ING TO FUNDING AND TECHNOLOGY SOURCES;
   29    (III) THE CAPACITY TO SECURE SUBSTANTIAL PRIVATE AND  OTHER  NON-STATE
   30  GOVERNMENTAL  FUNDING  FOR THE PROPOSED INNOVATION HOT SPOT, IN ADDITION
   31  TO DIRECT SUPPORT FROM THE SPONSORING ACADEMIC  INSTITUTION  OR  RELATED
   32  FOUNDATION;
   33    (IV)  THE  ABILITY  AND  WILLINGNESS  TO  COOPERATE  WITH OTHER LOCAL,
   34  REGIONAL AND  STATEWIDE  ECONOMIC  DEVELOPMENT  ORGANIZATIONS,  BUSINESS
   35  SUPPORT  NETWORKS,  VENTURE AND ANGEL CAPITAL FUNDING SOURCES, AND WORK-
   36  FORCE DEVELOPMENT ADVOCATES;
   37    (V) THE CAPACITY TO COLLABORATE WITH OTHER BUSINESSES  AND  INDUSTRIES
   38  INDIVIDUALLY; AND
   39    (VI)  SUCH  OTHER REQUIREMENTS AS THE DEPARTMENT DEEMS APPROPRIATE FOR
   40  THE FORMAT, CONTENT AND FILING OF APPLICATIONS FOR DESIGNATION AS  INNO-
   41  VATION HOT SPOTS.
   42    (B) THE COMMISSIONER SHALL ALSO ESTABLISH CRITERIA FOR THE DESIGNATION
   43  OF INNOVATION HOT SPOTS.
   44    (C)  AFTER  ESTABLISHING SUCH CRITERIA, THE COMMISSIONER SHALL APPROVE
   45  AND DESIGNATE FIVE INNOVATION HOT SPOTS AND THEIR  OPERATORS  IN  FISCAL
   46  YEAR  TWO  THOUSAND  THIRTEEN--TWO THOUSAND FOURTEEN AND FIVE ADDITIONAL
   47  INNOVATION HOT SPOTS AND THEIR OPERATORS IN  FISCAL  YEAR  TWO  THOUSAND
   48  FOURTEEN--TWO THOUSAND FIFTEEN.
   49    (D)  THE  COMMISSIONER  SHALL ISSUE A CERTIFICATE OF APPROVAL FOR EACH
   50  DESIGNATED INNOVATION HOT SPOT AND EACH APPROVED OPERATOR  OF  AN  INNO-
   51  VATION HOT SPOT.
   52    (E)  THE OPERATOR OF AN APPROVED INNOVATION HOT SPOT MAY ACCEPT APPLI-
   53  CATIONS FOR TENANCIES FROM QUALIFIED ENTITIES FOR A PERIOD OF FIVE YEARS
   54  AFTER THE RECEIPT BY SUCH INNOVATION HOT  SPOT  OF  ITS  CERTIFICATE  OF
   55  APPROVAL  FROM  THE  COMMISSIONER.  QUALIFIED ENTITIES THAT LOCATE THEIR
   56  BUSINESSES IN AN INNOVATION HOT SPOT ARE ELIGIBLE TO RECEIVE  TAX  BENE-
       S. 2609                            15                            A. 3009
    1  FITS  UNDER  SECTION THIRTY-EIGHT OF THE TAX LAW FOR FIVE TAXABLE YEARS,
    2  BEGINNING WITH THE FIRST TAXABLE YEAR DURING WHICH SUCH QUALIFIED  ENTI-
    3  TIES BECOME TENANTS IN AN INNOVATION HOT SPOT.
    4    4.  EACH  OPERATOR OF AN INNOVATION HOT SPOT SHALL REPORT ON AN ANNUAL
    5  BASIS ON ITS ACTIVITIES TO THE COMMISSIONER IN A MANNER AND ACCORDING TO
    6  THE SCHEDULE ESTABLISHED BY THE DEPARTMENT, AND SHALL PROVIDE SUCH ADDI-
    7  TIONAL INFORMATION AS THE COMMISSIONER  MAY  REQUIRE.  THE  COMMISSIONER
    8  SHALL  EVALUATE THE OPERATIONS OF THE INNOVATION HOT SPOTS USING METHODS
    9  INCLUDING BUT NOT LIMITED TO SITE VISITS, REPORTS PURSUANT TO  SPECIFIED
   10  INFORMATION,  AND REVIEW EVALUATIONS. IF THE COMMISSIONER IS UNSATISFIED
   11  WITH THE PROGRESS OF AN OPERATOR OF AN INNOVATION HOT SPOT, THE  COMMIS-
   12  SIONER  SHALL NOTIFY SUCH OPERATOR OF THE RESULTS OF ITS EVALUATIONS AND
   13  THE FINDINGS OF DEFICIENCIES IN THE OPERATION OF SUCH HOT SPOT AND SHALL
   14  ALLOW AND COOPERATE WITH SUCH OPERATOR TO  REMEDY  SUCH  FINDINGS  IN  A
   15  TIMELY MANNER.
   16    5.  NOTWITHSTANDING ANY PROVISION OF THIS CHAPTER, EMPLOYEES AND OFFI-
   17  CERS OF THE DEPARTMENT AND THE DEPARTMENT OF TAXATION AND FINANCE  SHALL
   18  BE ALLOWED AND ARE DIRECTED TO SHARE AND EXCHANGE:
   19    (I)  INFORMATION  DERIVED FROM TAX RETURNS OR REPORTS THAT IS RELEVANT
   20  TO A QUALIFIED ENTITY'S ELIGIBILITY TO PARTICIPATE IN THE INNOVATION HOT
   21  SPOTS PROGRAM, AND
   22    (II) INFORMATION REGARDING THE TAX BENEFITS APPLIED FOR,  ALLOWED,  OR
   23  CLAIMED  PURSUANT TO SECTION THIRTY-EIGHT OF THE TAX LAW AND THE TAXPAY-
   24  ERS WHO ARE APPLYING FOR OR ARE CLAIMING THE TAX BENEFITS.
   25    ALL INFORMATION EXCHANGED BETWEEN THE DEPARTMENT AND THE DEPARTMENT OF
   26  TAXATION AND FINANCE SHALL  NOT BE SUBJECT TO DISCLOSURE  OR  INSPECTION
   27  PURSUANT  TO  THE  STATE'S  FREEDOM OF INFORMATION LAW.   THE DEPARTMENT
   28  SHALL NOT DISCLOSE ANY INFORMATION OBTAINED FROM THE DEPARTMENT OF TAXA-
   29  TION AND FINANCE THAT CONCERNS SPECIFIC TAXPAYERS.
   30    S 3. The tax law is amended by adding a new  section  38  to  read  as
   31  follows:
   32    S  38.  NEW YORK INNOVATION HOT SPOT PROGRAM TAX BENEFITS. (A) AS USED
   33  IN THIS CHAPTER, THE TERMS "INNOVATION HOT SPOT" AND "QUALIFIED  ENTITY"
   34  SHALL  HAVE THE SAME MEANING AS UNDER SECTION THREE HUNDRED SIXTY-ONE OF
   35  THE ECONOMIC DEVELOPMENT LAW.
   36    (B) A TAXPAYER UNDER ARTICLE NINE-A OF THIS CHAPTER THAT IS  A  QUALI-
   37  FIED ENTITY AND ALSO A TENANT IN AN INNOVATION HOT SPOT SHALL BE SUBJECT
   38  ONLY  TO  THE  FIXED  DOLLAR MINIMUM TAX, IMPOSED UNDER PARAGRAPH (D) OF
   39  SUBDIVISION ONE OF SECTION TWO HUNDRED TEN OF  THIS  CHAPTER,  FOR  FIVE
   40  TAXABLE  YEARS,  BEGINNING  WITH THE FIRST TAXABLE YEAR DURING WHICH THE
   41  QUALIFIED ENTITY BECOMES A TENANT IN AN INNOVATION HOT SPOT. A  TAXPAYER
   42  UNDER  ARTICLE  NINE-A  OF THIS CHAPTER THAT IS A CORPORATE PARTNER IN A
   43  QUALIFIED ENTITY, OR IS A QUALIFIED ENTITY THAT IS LOCATED  BOTH  WITHIN
   44  AND  WITHOUT  AN  INNOVATION HOT SPOT, SHALL BE ALLOWED ONLY A DEDUCTION
   45  FOR THE AMOUNT OF INCOME OR GAIN INCLUDED IN ITS FEDERAL ADJUSTED  GROSS
   46  INCOME  TO  THE  EXTENT  THAT  THE INCOME OR GAIN IS ATTRIBUTABLE TO THE
   47  OPERATIONS AT THE INNOVATION HOT SPOT. THE DEDUCTION IS ALLOWED FOR FIVE
   48  TAXABLE YEARS, BEGINNING WITH THE FIRST TAXABLE YEAR  DURING  WHICH  THE
   49  QUALIFIED ENTITY BECOMES A TENANT IN AN INNOVATION HOT SPOT.
   50    (C)  AN INDIVIDUAL WHO IS THE SOLE PROPRIETOR OF A QUALIFIED ENTITY OR
   51  A MEMBER OF A LIMITED LIABILITY COMPANY, A PARTNER IN A PARTNERSHIP OR A
   52  SHAREHOLDER IN A NEW YORK SUBCHAPTER S  CORPORATION  WHERE  THE  LIMITED
   53  LIABILITY  COMPANY, PARTNERSHIP, OR S CORPORATION IS A QUALIFIED ENTITY,
   54  THAT IS TAXABLE UNDER  ARTICLE  TWENTY-TWO  OF  THIS  CHAPTER  SHALL  BE
   55  ALLOWED  A  DEDUCTION  FOR  THE AMOUNT OF INCOME OR GAIN INCLUDED IN ITS
   56  FEDERAL ADJUSTED GROSS INCOME TO THE EXTENT THAT THE INCOME OR  GAIN  IS
       S. 2609                            16                            A. 3009
    1  ATTRIBUTABLE  TO  THE OPERATIONS OF A QUALIFIED ENTITY WHICH IS A TENANT
    2  IN AN INNOVATION HOT SPOT. THE DEDUCTION IS  ALLOWED  FOR  FIVE  TAXABLE
    3  YEARS,  BEGINNING WITH THE FIRST TAXABLE YEAR DURING WHICH THE QUALIFIED
    4  ENTITY BECOMES A TENANT IN AN INNOVATION HOT SPOT.
    5    (D)  A  QUALIFIED  ENTITY  THAT  IS A TENANT IN AN INNOVATION HOT SPOT
    6  SHALL BE ELIGIBLE FOR A CREDIT OR REFUND FOR SALES AND USE TAXES IMPOSED
    7  ON THE RETAIL SALE OF  TANGIBLE  PERSONAL  PROPERTY  OR  SERVICES  UNDER
    8  SUBDIVISIONS  (A),  (B),  AND  (C)  OF  SECTION  ELEVEN HUNDRED FIVE AND
    9  SECTION ELEVEN HUNDRED TEN OF THIS CHAPTER. THE CREDIT OR  REFUND  SHALL
   10  BE  ALLOWED  FOR  SIXTY MONTHS BEGINNING WITH THE FIRST FULL MONTH AFTER
   11  THE QUALIFIED ENTITY BECOMES A TENANT IN AN INNOVATION HOT SPOT.
   12    (E) A TAXPAYER WHO CLAIMS ANY OF THE TAX BENEFITS  DESCRIBED  IN  THIS
   13  SECTION  IS  NO LONGER ELIGIBLE FOR ANY OTHER NEW YORK STATE EXEMPTIONS,
   14  DEDUCTIONS, OR CREDIT OR REFUNDS UNDER THIS CHAPTER TO THE  EXTENT  THAT
   15  ANY  SUCH  EXEMPTION, DEDUCTION, CREDIT OR REFUND IS ATTRIBUTABLE TO THE
   16  BUSINESS OPERATIONS OF A TENANT IN AN INNOVATION HOT SPOT. THE  ELECTION
   17  TO CLAIM THE TAX BENEFITS DESCRIBED IN THIS SECTION IS NOT REVOCABLE.
   18    (F) CROSS-REFERENCES. FOR APPLICATION OF THE TAX BENEFITS PROVIDED FOR
   19  IN THIS SECTION, SEE THE FOLLOWING PROVISIONS OF THIS CHAPTER:
   20    (I) ARTICLE 9-A, SECTION 208, SUBDIVISION (9), PARAGRAPH (A), SUBPARA-
   21  GRAPH (18).
   22    (II) ARTICLE 9-A, SECTION 209, SUBDIVISION 11.
   23    (III) ARTICLE 22, SECTION 612, SUBSECTION (C), PARAGRAPH (39).
   24    (IV) ARTICLE 28, SECTION 1119, SUBDIVISION (D).
   25    S  4.  Paragraph (a) of subdivision 9 of section 208 of the tax law is
   26  amended by adding a new subparagraph 18 to read as follows:
   27    (18) THE AMOUNT OF INCOME OR GAIN INCLUDED IN FEDERAL  ADJUSTED  GROSS
   28  INCOME  OF  A  TAXPAYER  THAT IS A PARTNER IN A QUALIFIED ENTITY OR IS A
   29  QUALIFIED ENTITY THAT IS LOCATED BOTH WITHIN AND WITHOUT  AN  INNOVATION
   30  HOT  SPOT,  TO THE EXTENT THAT THE INCOME OR GAIN IS ATTRIBUTABLE TO THE
   31  OPERATIONS OF A QUALIFIED ENTITY AT THE INNOVATION HOT SPOT AS  PROVIDED
   32  IN SECTION THIRTY-EIGHT OF THIS CHAPTER.
   33    S 5. Section 209 of the tax law is amended by adding a new subdivision
   34  11 to read as follows:
   35    11.  EXCEPT  AS  PROVIDED IN SUBPARAGRAPH EIGHTEEN OF PARAGRAPH (A) OF
   36  SUBDIVISION NINE OF SECTION TWO HUNDRED EIGHT OF THIS ARTICLE, A  CORPO-
   37  RATION THAT IS A QUALIFIED ENTITY AND ALSO A TENANT IN AN INNOVATION HOT
   38  SPOT  SHALL  BE SUBJECT ONLY TO THE FIXED DOLLAR MINIMUM TAX UNDER PARA-
   39  GRAPH (D) OF SUBDIVISION ONE OF SECTION TWO HUNDRED TEN OF THIS ARTICLE,
   40  AS PROVIDED IN SECTION THIRTY-EIGHT OF THIS CHAPTER.
   41    S 6. Subsection (c) of section 612 of the tax law is amended by adding
   42  a new paragraph 39 to read as follows:
   43    (39) ANY INCOME OR GAIN, TO THE  EXTENT  IT  IS  INCLUDED  IN  FEDERAL
   44  ADJUSTED  GROSS  INCOME OF AN INDIVIDUAL WHO IS THE SOLE PROPRIETOR OF A
   45  QUALIFIED ENTITY OR A MEMBER OF A LIMITED LIABILITY COMPANY,  A  PARTNER
   46  IN A PARTNERSHIP OR A SHAREHOLDER IN A NEW YORK SUBCHAPTER S CORPORATION
   47  THAT  IS  A QUALIFIED ENTITY, ATTRIBUTABLE TO THE OPERATIONS OF A QUALI-
   48  FIED ENTITY AT ITS LOCATION IN AN INNOVATION HOT SPOT,  AS  PROVIDED  IN
   49  SECTION THIRTY-EIGHT OF THIS CHAPTER.
   50    S 7. Paragraph 1 of subdivision (d) of section 1119 of the tax law, as
   51  added  by  section  31 of part S-1 of chapter 57 of the laws of 2009, is
   52  amended to read as follows:
   53    (1) Subject to the conditions and limitations  provided  for  in  this
   54  section,  a  refund  or  credit will be allowed for taxes imposed on the
   55  retail sale of tangible personal property described in  subdivision  (a)
   56  of  section  eleven  hundred  five of this article, and on every sale of
       S. 2609                            17                            A. 3009
    1  services described in subdivisions (b) and  (c)  of  such  section,  and
    2  consideration  given  or  contracted to be given for, or for the use of,
    3  such  tangible  personal  property  or  services,  where  such  tangible
    4  personal property or services are sold to a qualified empire zone enter-
    5  prise  OR  TO  A QUALIFIED ENTITY THAT IS ALSO A TENANT IN AN INNOVATION
    6  HOT SPOT AS PROVIDED IN SECTION THIRTY-EIGHT OF THIS  CHAPTER,  provided
    7  that  (A)  such tangible personal property or tangible personal property
    8  upon which such a service has been performed or such service (other than
    9  a service described in subdivision (b) of section eleven hundred five of
   10  this article) is directly and predominantly, or such a service described
   11  in clause (A) or (D) of paragraph one of such subdivision (b) of section
   12  eleven hundred five of this article is directly and exclusively, used or
   13  consumed by (I) such QUALIFIED EMPIRE ZONE enterprise in an area  desig-
   14  nated  as  an  empire zone pursuant to article eighteen-B of the general
   15  municipal law with respect to which such enterprise is certified  pursu-
   16  ant  to  such  article  eighteen-B,  OR (II) SUCH QUALIFIED ENTITY IN AN
   17  INNOVATION HOT SPOT or (B) such a service described in clause (B) or (C)
   18  of paragraph one of subdivision (b) of section eleven  hundred  five  of
   19  this  article  is  delivered  and  billed  to  (I) such enterprise at an
   20  address in such empire zone OR (II) SUCH QUALIFIED ENTITY AT THE ADDRESS
   21  OF THE INNOVATION HOT SPOT WHERE IT IS A TENANT, or (C) the enterprise's
   22  place of primary use of the service described in paragraph two  of  such
   23  subdivision  (b) of section eleven hundred five is at an address in such
   24  empire zone OR AT AN INNOVATION HOT SPOT; provided,  further,  that,  in
   25  order  for  a  motor  vehicle,  as defined in subdivision (c) of section
   26  eleven hundred seventeen of this article, or tangible personal  property
   27  related  to such a motor vehicle to be found to be used predominantly in
   28  such a zone, at least fifty percent of such motor vehicle's use shall be
   29  exclusively within such zone or at least fifty  percent  of  such  motor
   30  vehicle's  use shall be in activities originating or terminating in such
   31  zone, or both; and either or both such usages shall be  computed  either
   32  on  the  basis  of  mileage  or  hours of use, at the discretion of such
   33  enterprise. For purposes of this subdivision, tangible personal property
   34  related to such a motor vehicle shall include a  battery,  diesel  motor
   35  fuel,  an  engine,  engine  components, motor fuel, a muffler, tires and
   36  similar tangible personal property used in or on such a motor vehicle.
   37    S 8. Subdivision (c) of section 11-1712 of the administrative code  of
   38  the  city of New York is amended by adding a new paragraph 35 to read as
   39  follows:
   40    (35) AS PROVIDED IN SECTION THIRTY-EIGHT OF THE TAX LAW, ANY INCOME OR
   41  GAIN, TO THE EXTENT IT IS INCLUDED IN FEDERAL ADJUSTED GROSS  INCOME  OF
   42  AN  INDIVIDUAL  WHO  IS  THE  SOLE PROPRIETOR OF A QUALIFIED ENTITY OR A
   43  MEMBER OF A LIMITED LIABILITY COMPANY, A PARTNER IN A PARTNERSHIP  OR  A
   44  SHAREHOLDER  IN  A NEW YORK SUBCHAPTER S CORPORATION THAT IS A QUALIFIED
   45  ENTITY AS DEFINED IN PARAGRAPH (B) OF SUBDIVISION ONE OF  SECTION  THREE
   46  HUNDRED  SIXTY-ONE  OF THE ECONOMIC DEVELOPMENT LAW, ATTRIBUTABLE TO THE
   47  OPERATIONS OF SUCH QUALIFIED ENTITY AT ITS LOCATION IN AN INNOVATION HOT
   48  SPOT, AS DEFINED IN PARAGRAPH (A) OF SUBDIVISION ONE  OF  SECTION  THREE
   49  HUNDRED SIXTY-ONE OF THE ECONOMIC DEVELOPMENT LAW.
   50    S 9. This act shall take effect immediately.
   51                                   PART D
   52    Section  1.  Subsection (g) of section 615 of the tax law, as added by
   53  section 3 of part HH of chapter 57 of the laws of 2010,  is  amended  to
   54  read as follows:
       S. 2609                            18                            A. 3009
    1    (g)(1)  With  respect  to  an individual whose New York adjusted gross
    2  income is over one million dollars and no more than ten million dollars,
    3  the New York itemized deduction  shall  be  an  amount  equal  to  fifty
    4  percent  of  any charitable contribution deduction allowed under section
    5  one  hundred  seventy  of  the  internal  revenue code for taxable years
    6  beginning after two thousand nine and  before  two  thousand  [thirteen]
    7  SIXTEEN.  With  respect  to  an individual whose New York adjusted gross
    8  income is over one million dollars,  the  New  York  itemized  deduction
    9  shall be an amount equal to fifty percent of any charitable contribution
   10  deduction  allowed  under  section  one  hundred seventy of the internal
   11  revenue code for taxable years beginning in two thousand nine  or  after
   12  two thousand [twelve] FIFTEEN.
   13    (2) With respect to an individual whose New York adjusted gross income
   14  is over ten million dollars, the New York itemized deduction shall be an
   15  amount  equal  to  twenty-five  percent  of  any charitable contribution
   16  deduction allowed under section one  hundred  seventy  of  the  internal
   17  revenue  code  for  taxable  years beginning after two thousand nine and
   18  ending before two thousand [thirteen] SIXTEEN.
   19    S 2. Subdivision (g) of section 11-1715 of the administrative code  of
   20  the  city of New York, as added by section 7 of part HH of chapter 57 of
   21  the laws of 2010, is amended to read as follows:
   22    (g) (1) With respect to an individual whose New  York  adjusted  gross
   23  income is over one million dollars but no more than ten million dollars,
   24  the  New  York  itemized  deduction  shall  be  an amount equal to fifty
   25  percent of any charitable contribution deduction allowed  under  section
   26  one  hundred  seventy  of  the  internal  revenue code for taxable years
   27  beginning after two thousand nine and  before  two  thousand  [thirteen]
   28  SIXTEEN.  With  respect  to  an individual whose New York adjusted gross
   29  income is over one million dollars,  the  New  York  itemized  deduction
   30  shall be an amount equal to fifty percent of any charitable contribution
   31  deduction  allowed  under  section  one  hundred seventy of the internal
   32  revenue code for taxable years beginning in two thousand nine  or  after
   33  two thousand [twelve] FIFTEEN.
   34    (2) With respect to an individual whose New York adjusted gross income
   35  is over ten million dollars, the New York itemized deduction shall be an
   36  amount  equal  to  twenty-five  percent  of  any charitable contribution
   37  deduction allowed under section one  hundred  seventy  of  the  internal
   38  revenue  code  for  taxable  years beginning after two thousand nine AND
   39  ENDING BEFORE TWO THOUSAND SIXTEEN.
   40    S 3. This act shall take effect immediately.
   41                                   PART E
   42    Section 1. Subparagraph 17  of  paragraph  (a)  of  subdivision  9  of
   43  section 208 of the tax law is REPEALED.
   44    S  2. Paragraph (o) of subdivision 9 of section 208 of the tax law, as
   45  amended by section 1 of part M of chapter  686  of  the  laws  of  2003,
   46  clause  (A) of subparagraph 2 as amended by section 4 of part J of chap-
   47  ter 60 of the laws of 2007, is amended to read as follows:
   48    (o) Related members expense add back [and income exclusion]. (1) Defi-
   49  nitions. (A) Related member [or members. For purposes of this paragraph,
   50  the term related member or members means a person, corporation, or other
   51  entity, including an entity that is treated as a  partnership  or  other
   52  pass-through  vehicle  for  purposes  of  federal taxation, whether such
   53  person, corporation or entity is a  taxpayer  or  not,  where  one  such
   54  person,  corporation, or entity, or set of related persons, corporations
       S. 2609                            19                            A. 3009
    1  or entities, directly or  indirectly  owns  or  controls  a  controlling
    2  interest  in  another  entity.  Such  entity or entities may include all
    3  taxpayers under articles nine, nine-A, thirteen, twenty-two, thirty-two,
    4  thirty-three  or thirty-three-A of this chapter]. "RELATED MEMBER" MEANS
    5  A RELATED PERSON AS DEFINED IN SUBPARAGRAPH (C) OF  PARAGRAPH  THREE  OF
    6  SUBSECTION (B) OF SECTION FOUR HUNDRED SIXTY-FIVE OF THE INTERNAL REVEN-
    7  UE  CODE,  EXCEPT  THAT  "FIFTY  PERCENT"  SHALL BE SUBSTITUTED FOR "TEN
    8  PERCENT".
    9    (B) [Controlling interest. A controlling interest shall  mean  (i)  in
   10  the  case  of  a corporation, either thirty percent or more of the total
   11  combined voting power of all classes of stock of  such  corporation,  or
   12  thirty percent or more of the capital, profits or beneficial interest in
   13  such  voting  stock of such corporation, and (ii) in the case of a part-
   14  nership, association, trust or other entity, thirty percent or  more  of
   15  the capital, profits or beneficial interest in such partnership, associ-
   16  ation, trust or other entity.] EFFECTIVE RATE OF TAX. "EFFECTIVE RATE OF
   17  TAX"  MEANS,  AS TO ANY STATE OR U.S.  POSSESSION, THE MAXIMUM STATUTORY
   18  RATE OF TAX IMPOSED BY THE STATE OR  POSSESSION  ON  OR  MEASURED  BY  A
   19  RELATED  MEMBER'S NET INCOME MULTIPLIED BY THE APPORTIONMENT PERCENTAGE,
   20  IF ANY, APPLICABLE TO THE RELATED MEMBER UNDER THE LAWS OF  SAID  JURIS-
   21  DICTION.  FOR  PURPOSES OF THIS DEFINITION, THE EFFECTIVE RATE OF TAX AS
   22  TO ANY STATE OR U.S. POSSESSION IS ZERO WHERE THE RELATED  MEMBER'S  NET
   23  INCOME  TAX  LIABILITY IN SAID JURISDICTION IS REPORTED ON A COMBINED OR
   24  CONSOLIDATED RETURN INCLUDING BOTH THE TAXPAYER AND THE  RELATED  MEMBER
   25  WHERE  THE  REPORTED  TRANSACTIONS  BETWEEN THE TAXPAYER AND THE RELATED
   26  MEMBER ARE ELIMINATED OR OFFSET. ALSO, FOR PURPOSES OF THIS  DEFINITION,
   27  WHEN  COMPUTING  THE EFFECTIVE RATE OF TAX FOR A JURISDICTION IN WHICH A
   28  RELATED MEMBER'S NET INCOME IS ELIMINATED OR OFFSET BY A CREDIT OR SIMI-
   29  LAR ADJUSTMENT THAT IS DEPENDENT UPON THE RELATED  MEMBER  EITHER  MAIN-
   30  TAINING OR MANAGING INTANGIBLE PROPERTY OR COLLECTING INTEREST INCOME IN
   31  THAT  JURISDICTION,  THE  MAXIMUM  STATUTORY RATE OF TAX IMPOSED BY SAID
   32  JURISDICTION SHALL BE DECREASED TO REFLECT THE  STATUTORY  RATE  OF  TAX
   33  THAT APPLIES TO THE RELATED MEMBER AS EFFECTIVELY REDUCED BY SUCH CREDIT
   34  OR SIMILAR ADJUSTMENT.
   35    (C) Royalty payments. Royalty payments are payments directly connected
   36  to  the  acquisition,  use,  maintenance or management, ownership, sale,
   37  exchange, or any other disposition of licenses, trademarks,  copyrights,
   38  trade  names,  trade  dress,  service  marks, mask works, trade secrets,
   39  patents and any other similar types of intangible assets  as  determined
   40  by  the commissioner, and [includes] INCLUDE amounts allowable as inter-
   41  est deductions under section one hundred  sixty-three  of  the  internal
   42  revenue  code to the extent such amounts are directly or indirectly for,
   43  related to or in connection with the acquisition,  use,  maintenance  or
   44  management,  ownership, sale, exchange or disposition of such intangible
   45  assets.
   46    (D) Valid Business Purpose. A valid business purpose is  one  or  more
   47  business  purposes,  other  than the avoidance or reduction of taxation,
   48  which alone or in combination constitute the primary motivation for some
   49  business activity or transaction, which activity or transaction  changes
   50  in  a  meaningful  way, apart from tax effects, the economic position of
   51  the taxpayer. The economic position of the taxpayer includes an increase
   52  in the market share of the taxpayer, or the entry by the  taxpayer  into
   53  new business markets.
   54    (2) Royalty expense add backs. (A) Except where a taxpayer is included
   55  in  a combined report with a related member pursuant to subdivision four
   56  of section two hundred eleven  of  this  article,  for  the  purpose  of
       S. 2609                            20                            A. 3009
    1  computing entire net income or other applicable taxable basis, a taxpay-
    2  er  must  add  back royalty payments [to a] DIRECTLY OR INDIRECTLY PAID,
    3  ACCRUED, OR INCURRED IN CONNECTION WITH ONE OR MORE DIRECT  OR  INDIRECT
    4  TRANSACTIONS  WITH ONE OR MORE related [member] MEMBERS during the taxa-
    5  ble year to the extent deductible in calculating federal taxable income.
    6    (B) [The add back of royalty payments shall not be required if and  to
    7  the extent that such payments meet either of the following conditions:
    8    (i)  the related member during the same taxable year directly or indi-
    9  rectly paid or incurred the amount to a person or entity that is  not  a
   10  related  member,  and  such  transaction  was  done for a valid business
   11  purpose and the payments are made at arm's length;
   12    (ii) the royalty payments are paid or incurred  to  a  related  member
   13  organized  under the laws of a country other than the United States, are
   14  subject to a comprehensive income tax treaty between  such  country  and
   15  the  United States, and are taxed in such country at a tax rate at least
   16  equal to that imposed by this state.
   17    (3) Royalty income exclusions. For the purpose of computing entire net
   18  income or other taxable basis, a taxpayer shall  be  allowed  to  deduct
   19  royalty  payments  directly or indirectly received from a related member
   20  during the taxable year to the extent included in the taxpayer's federal
   21  taxable income unless such royalty payments would not be required to  be
   22  added  back  under  subparagraph  two of this paragraph or other similar
   23  provision in this chapter.] EXCEPTIONS. (I) THE ADJUSTMENT  REQUIRED  IN
   24  THIS  PARAGRAPH  SHALL  NOT  APPLY TO THE PORTION OF THE ROYALTY PAYMENT
   25  THAT THE TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE  OF  THE
   26  TYPE  AND  IN  THE  FORM SPECIFIED BY THE COMMISSIONER, MEETS ALL OF THE
   27  FOLLOWING REQUIREMENTS: (I) THE RELATED MEMBER WAS  SUBJECT  TO  TAX  IN
   28  THIS  STATE  OR  ANOTHER  STATE  OR POSSESSION OF THE UNITED STATES OR A
   29  FOREIGN NATION OR SOME COMBINATION THEREOF ON A TAX BASE  THAT  INCLUDED
   30  THE  ROYALTY PAYMENT PAID, ACCRUED OR INCURRED BY THE TAXPAYER; (II) THE
   31  RELATED MEMBER DURING THE SAME TAXABLE YEAR DIRECTLY OR INDIRECTLY PAID,
   32  ACCRUED OR INCURRED SUCH PORTION TO A  PERSON  THAT  IS  NOT  A  RELATED
   33  MEMBER;  AND  (III)  THE  TRANSACTION GIVING RISE TO THE ROYALTY PAYMENT
   34  BETWEEN THE TAXPAYER AND THE RELATED MEMBER WAS UNDERTAKEN FOR  A  VALID
   35  BUSINESS PURPOSE.
   36    (II)  THE ADJUSTMENT REQUIRED IN THIS PARAGRAPH SHALL NOT APPLY IF THE
   37  TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE  TYPE  AND
   38  IN  THE FORM SPECIFIED BY THE COMMISSIONER, THAT: (I) THE RELATED MEMBER
   39  WAS SUBJECT TO TAX ON OR MEASURED BY ITS NET INCOME  IN  THIS  STATE  OR
   40  ANOTHER  STATE  OR  POSSESSION  OF THE UNITED STATES OR SOME COMBINATION
   41  THEREOF; (II) THE TAX BASE FOR SAID TAX  INCLUDED  THE  ROYALTY  PAYMENT
   42  PAID,  ACCRUED  OR  INCURRED  BY  THE  TAXPAYER; AND (III) THE AGGREGATE
   43  EFFECTIVE RATE OF TAX APPLIED TO THE RELATED MEMBER IN  THOSE  JURISDIC-
   44  TIONS  IS  NO LESS THAN EIGHTY PERCENT OF THE STATUTORY RATE OF TAX THAT
   45  APPLIED TO THE TAXPAYER UNDER SECTION TWO HUNDRED TEN  OF  THIS  ARTICLE
   46  FOR THE TAXABLE YEAR.
   47    (III) THE ADJUSTMENT REQUIRED IN THIS PARAGRAPH SHALL NOT APPLY IF THE
   48  TAXPAYER  ESTABLISHES,  BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE AND
   49  IN THE FORM SPECIFIED BY THE COMMISSIONER, THAT: (I) THE ROYALTY PAYMENT
   50  WAS PAID, ACCRUED OR INCURRED TO A RELATED MEMBER  ORGANIZED  UNDER  THE
   51  LAWS  OF  A  COUNTRY  OTHER  THAN  THE  UNITED  STATES; (II) THE RELATED
   52  MEMBER'S INCOME FROM THE TRANSACTION  WAS  SUBJECT  TO  A  COMPREHENSIVE
   53  INCOME  TAX TREATY BETWEEN SUCH COUNTRY AND THE UNITED STATES; (III) THE
   54  RELATED MEMBER WAS SUBJECT TO TAX IN A FOREIGN NATION ON A TAX BASE THAT
   55  INCLUDED THE ROYALTY PAYMENT PAID, ACCRUED OR INCURRED BY THE  TAXPAYER;
   56  (IV)  THE RELATED MEMBER'S INCOME FROM THE TRANSACTION WAS TAXED IN SUCH
       S. 2609                            21                            A. 3009
    1  COUNTRY AT AN EFFECTIVE RATE OF TAX AT LEAST EQUAL TO  THAT  IMPOSED  BY
    2  THIS  STATE;  AND  (V) THE ROYALTY PAYMENT WAS PAID, ACCRUED OR INCURRED
    3  PURSUANT TO A TRANSACTION THAT  WAS  UNDERTAKEN  FOR  A  VALID  BUSINESS
    4  PURPOSE AND USING TERMS THAT REFLECT AN ARM'S LENGTH RELATIONSHIP.
    5    (IV)  THE ADJUSTMENT REQUIRED IN THIS PARAGRAPH SHALL NOT APPLY IF THE
    6  TAXPAYER AND THE COMMISSIONER AGREE IN WRITING TO THE APPLICATION OR USE
    7  OF ALTERNATIVE ADJUSTMENTS OR COMPUTATIONS. THE COMMISSIONER MAY, IN HIS
    8  OR HER DISCRETION, AGREE  TO  THE  APPLICATION  OR  USE  OF  ALTERNATIVE
    9  ADJUSTMENTS OR COMPUTATIONS WHEN HE OR SHE CONCLUDES THAT IN THE ABSENCE
   10  OF  SUCH  AGREEMENT  THE  INCOME  OF  THE TAXPAYER WOULD NOT BE PROPERLY
   11  REFLECTED.
   12    S 3. Paragraph 6 of subdivision (a) of section 292 of the tax law,  as
   13  amended  by  section 15 of part M of chapter 686 of the laws of 2003, is
   14  amended to read as follows:
   15    (6) Related members expense add back  [and  income  exclusion].    (A)
   16  Definitions.  (i) Related member [or members. For purposes of this para-
   17  graph, the term related member or members means a  person,  corporation,
   18  or other entity, including an entity that is treated as a partnership or
   19  other  pass-through  vehicle  for  purposes of federal taxation, whether
   20  such person, corporation or entity is a taxpayer or not, where one  such
   21  person,  corporation, or entity, or set of related persons, corporations
   22  or entities, directly or  indirectly  owns  or  controls  a  controlling
   23  interest  in  another  entity.  Such  entity or entities may include all
   24  taxpayers under article nine, nine-A, thirteen, twenty-two,  thirty-two,
   25  thirty-three or thirty-three-A of this chapter].  "RELATED MEMBER" MEANS
   26  A  RELATED  PERSON  AS DEFINED IN SUBPARAGRAPH (C) OF PARAGRAPH THREE OF
   27  SUBSECTION (B) OF SECTION FOUR HUNDRED SIXTY-FIVE OF THE INTERNAL REVEN-
   28  UE CODE, EXCEPT THAT "FIFTY  PERCENT"  SHALL  BE  SUBSTITUTED  FOR  "TEN
   29  PERCENT".
   30    (ii)  [Controlling  interest. A controlling interest shall mean (I) in
   31  the case of a corporation, either thirty percent or more  of  the  total
   32  combined  voting  power  of all classes of stock of such corporation, or
   33  thirty percent or more of the capital, profits or beneficial interest in
   34  such voting stock of such corporation, and (II) in the case of  a  part-
   35  nership,  association,  trust or other entity, thirty percent or more of
   36  the capital, profits or beneficial interest in such partnership, associ-
   37  ation, trust or other entity.] EFFECTIVE RATE OF TAX. "EFFECTIVE RATE OF
   38  TAX" MEANS, AS TO ANY STATE OR U.S. POSSESSION,  THE  MAXIMUM  STATUTORY
   39  RATE  OF  TAX  IMPOSED  BY  THE  STATE OR POSSESSION ON OR MEASURED BY A
   40  RELATED MEMBER'S NET INCOME MULTIPLIED BY THE APPORTIONMENT  PERCENTAGE,
   41  IF  ANY,  APPLICABLE TO THE RELATED MEMBER UNDER THE LAWS OF SAID JURIS-
   42  DICTION. FOR PURPOSES OF THIS DEFINITION, THE EFFECTIVE RATE OF  TAX  AS
   43  TO  ANY  STATE OR U.S. POSSESSION IS ZERO WHERE THE RELATED MEMBER'S NET
   44  INCOME TAX LIABILITY IN SAID JURISDICTION IS REPORTED ON A  COMBINED  OR
   45  CONSOLIDATED  RETURN  INCLUDING BOTH THE TAXPAYER AND THE RELATED MEMBER
   46  WHERE THE REPORTED TRANSACTIONS BETWEEN THE  TAXPAYER  AND  THE  RELATED
   47  MEMBER ARE ELIMINATED OR OFFSET.  ALSO, FOR PURPOSES OF THIS DEFINITION,
   48  WHEN  COMPUTING  THE EFFECTIVE RATE OF TAX FOR A JURISDICTION IN WHICH A
   49  RELATED MEMBER'S NET INCOME IS ELIMINATED OR OFFSET BY A CREDIT OR SIMI-
   50  LAR ADJUSTMENT THAT IS DEPENDENT UPON THE RELATED  MEMBER  EITHER  MAIN-
   51  TAINING OR MANAGING INTANGIBLE PROPERTY OR COLLECTING INTEREST INCOME IN
   52  THAT  JURISDICTION,  THE  MAXIMUM  STATUTORY RATE OF TAX IMPOSED BY SAID
   53  JURISDICTION SHALL BE DECREASED TO REFLECT THE  STATUTORY  RATE  OF  TAX
   54  THAT APPLIES TO THE RELATED MEMBER AS EFFECTIVELY REDUCED BY SUCH CREDIT
   55  OR SIMILAR ADJUSTMENT.
       S. 2609                            22                            A. 3009
    1    (iii)   Royalty  payments.  Royalty  payments  are  payments  directly
    2  connected to the acquisition, use, maintenance or management, ownership,
    3  sale, exchange, or any other disposition of licenses, trademarks,  copy-
    4  rights,  trade  names,  trade  dress,  service  marks, mask works, trade
    5  secrets,  patents  and  any  other similar types of intangible assets as
    6  determined by the commissioner, and [includes] INCLUDE amounts allowable
    7  as interest deductions under section  one  hundred  sixty-three  of  the
    8  internal  revenue  code to the extent such amounts are directly or indi-
    9  rectly for, related to or in connection with the acquisition, use, main-
   10  tenance or management, ownership, sale, exchange or disposition of  such
   11  intangible assets.
   12    (iv)  Valid  business purpose. A valid business purpose is one or more
   13  business purposes other than the  avoidance  or  reduction  of  taxation
   14  which alone or in combination constitute the primary motivation for some
   15  business  activity or transaction, which activity or transaction changes
   16  in a meaningful way, apart from tax effects, the  economic  position  of
   17  the taxpayer. The economic position of the taxpayer includes an increase
   18  in  the  market share of the taxpayer, or the entry by the taxpayer into
   19  new business markets.
   20    (B) Royalty expense add backs. (i) For the purpose  of  computing  New
   21  York unrelated business taxable income, a taxpayer must add back royalty
   22  payments  [to  a]  DIRECTLY  OR INDIRECTLY PAID, ACCRUED, OR INCURRED IN
   23  CONNECTION WITH ONE OR MORE DIRECT OR INDIRECT TRANSACTIONS WITH ONE  OR
   24  MORE  related  [member]  MEMBERS  during  the taxable year to the extent
   25  deductible in calculating federal unrelated business taxable income;
   26    (ii) [The add back of royalty payments shall not be required if and to
   27  the extent that such payments meet either of the following conditions:
   28    (I) the related member during the same taxable year directly or  indi-
   29  rectly  paid  or incurred the amount to a person or entity that is not a
   30  related member, and such transaction was done for a valid  business  and
   31  the payments are made at arm's length;
   32    (II)  the  royalty  payments  are paid or incurred to a related member
   33  organized under the laws of a country other than the United States,  are
   34  subject  to  a  comprehensive income tax treaty between such country and
   35  the United States, and are taxed in such country at a tax rate at  least
   36  equal to that imposed by this state.
   37    (C)  Royalty  income exclusions. For the purpose of computing New York
   38  unrelated business taxable income, a taxpayer shall be allowed to deduct
   39  royalty payments directly or indirectly received from a  related  member
   40  during the taxable year to the extent included in the taxpayer's federal
   41  taxable  income unless such royalty payments would not be required to be
   42  added back under subparagraph (B) of this  paragraph  or  other  similar
   43  provision  in  this chapter.] EXCEPTIONS. (I) THE ADJUSTMENT REQUIRED IN
   44  THIS PARAGRAPH SHALL NOT APPLY TO THE PORTION  OF  THE  ROYALTY  PAYMENT
   45  THAT  THE  TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE
   46  TYPE AND IN THE FORM SPECIFIED BY THE COMMISSIONER,  MEETS  ALL  OF  THE
   47  FOLLOWING  REQUIREMENTS:  (A)  THE  RELATED MEMBER WAS SUBJECT TO TAX IN
   48  THIS STATE OR ANOTHER STATE OR POSSESSION OF  THE  UNITED  STATES  OR  A
   49  FOREIGN  NATION  OR SOME COMBINATION THEREOF ON A TAX BASE THAT INCLUDED
   50  THE ROYALTY PAYMENT PAID, ACCRUED OR INCURRED BY THE TAXPAYER;  (B)  THE
   51  RELATED MEMBER DURING THE SAME TAXABLE YEAR DIRECTLY OR INDIRECTLY PAID,
   52  ACCRUED  OR  INCURRED  SUCH  PORTION  TO  A PERSON THAT IS NOT A RELATED
   53  MEMBER; AND (C) THE TRANSACTION  GIVING  RISE  TO  THE  ROYALTY  PAYMENT
   54  BETWEEN  THE  TAXPAYER AND THE RELATED MEMBER WAS UNDERTAKEN FOR A VALID
   55  BUSINESS PURPOSE.
       S. 2609                            23                            A. 3009
    1    (II) THE ADJUSTMENT REQUIRED IN THIS PARAGRAPH SHALL NOT APPLY IF  THE
    2  TAXPAYER  ESTABLISHES,  BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE AND
    3  IN THE FORM SPECIFIED BY THE COMMISSIONER, THAT: (A) THE RELATED  MEMBER
    4  WAS  SUBJECT  TO  TAX  ON OR MEASURED BY ITS NET INCOME IN THIS STATE OR
    5  ANOTHER  STATE  OR  POSSESSION  OF THE UNITED STATES OR SOME COMBINATION
    6  THEREOF; (B) THE TAX BASE FOR SAID  TAX  INCLUDED  THE  ROYALTY  PAYMENT
    7  PAID,  ACCRUED OR INCURRED BY THE TAXPAYER; AND (C) THE AGGREGATE EFFEC-
    8  TIVE RATE OF TAX APPLIED TO THE RELATED MEMBER IN THOSE JURISDICTIONS IS
    9  NO LESS THAN EIGHTY PERCENT OF THE STATUTORY RATE OF TAX THAT APPLIED TO
   10  THE TAXPAYER UNDER SECTION TWO HUNDRED NINETY OF THIS  ARTICLE  FOR  THE
   11  TAXABLE YEAR.
   12    (III) THE ADJUSTMENT REQUIRED IN THIS PARAGRAPH SHALL NOT APPLY IF THE
   13  TAXPAYER  ESTABLISHES,  BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE AND
   14  IN THE FORM SPECIFIED BY THE COMMISSIONER, THAT: (A) THE ROYALTY PAYMENT
   15  WAS PAID, ACCRUED OR INCURRED TO A RELATED MEMBER  ORGANIZED  UNDER  THE
   16  LAWS OF A COUNTRY OTHER THAN THE UNITED STATES; (B) THE RELATED MEMBER'S
   17  INCOME  FROM  THE  TRANSACTION WAS SUBJECT TO A COMPREHENSIVE INCOME TAX
   18  TREATY BETWEEN SUCH COUNTRY AND  THE  UNITED  STATES;  (C)  THE  RELATED
   19  MEMBER  WAS  SUBJECT  TO  TAX  IN  A  FOREIGN  NATION ON A TAX BASE THAT
   20  INCLUDED THE ROYALTY PAYMENT PAID, ACCRUED OR INCURRED BY THE  TAXPAYER;
   21  (D)  THE  RELATED MEMBER'S INCOME FROM THE TRANSACTION WAS TAXED IN SUCH
   22  COUNTRY AT AN EFFECTIVE RATE OF TAX AT LEAST EQUAL TO  THAT  IMPOSED  BY
   23  THIS  STATE;  AND  (E) THE ROYALTY PAYMENT WAS PAID, ACCRUED OR INCURRED
   24  PURSUANT TO A TRANSACTION THAT  WAS  UNDERTAKEN  FOR  A  VALID  BUSINESS
   25  PURPOSE AND USING TERMS THAT REFLECT AN ARM'S LENGTH RELATIONSHIP.
   26    (IV)  THE ADJUSTMENT REQUIRED IN THIS PARAGRAPH SHALL NOT APPLY IF THE
   27  TAXPAYER AND THE COMMISSIONER AGREE IN WRITING TO THE APPLICATION OR USE
   28  OF ALTERNATIVE ADJUSTMENTS OR COMPUTATIONS. THE COMMISSIONER MAY, IN HIS
   29  OR HER DISCRETION, AGREE  TO  THE  APPLICATION  OR  USE  OF  ALTERNATIVE
   30  ADJUSTMENTS OR COMPUTATIONS WHEN HE OR SHE CONCLUDES THAT IN THE ABSENCE
   31  OF  SUCH  AGREEMENT  THE  INCOME  OF  THE TAXPAYER WOULD NOT BE PROPERLY
   32  REFLECTED.
   33    S 4. Paragraph 19 of subsection (c) of section 612 of the tax  law  is
   34  REPEALED.
   35    S  5.  Subsection  (r)  of  section  612 of the tax law, as amended by
   36  section 3 of part M of chapter 686 of the laws of 2003,  is  amended  to
   37  read as follows:
   38    (r)  Related  members  expense  add back [and income exclusion].   (1)
   39  Definitions. (A) Related  member  [or  members.  For  purposes  of  this
   40  subsection,  the  term  related member or members means a person, corpo-
   41  ration, or other entity, including an entity that is treated as a  part-
   42  nership  or other pass-through vehicle for purposes of federal taxation,
   43  whether such person, corporation or entity is a taxpayer or  not,  where
   44  one  such  person,  corporation,  or  entity, or set of related persons,
   45  corporations or entities, directly or  indirectly  owns  or  controls  a
   46  controlling  interest  in  another  entity.  Such entity or entities may
   47  include all taxpayers under article nine, nine-A, thirteen,  twenty-two,
   48  thirty-two,  thirty-three  or thirty-three-A of this chapter].  "RELATED
   49  MEMBER" MEANS A RELATED PERSON AS DEFINED IN SUBPARAGRAPH (C)  OF  PARA-
   50  GRAPH  THREE OF SUBSECTION (B) OF SECTION FOUR HUNDRED SIXTY-FIVE OF THE
   51  INTERNAL REVENUE CODE, EXCEPT THAT "FIFTY PERCENT" SHALL BE  SUBSTITUTED
   52  FOR "TEN PERCENT".
   53    (B)  [Controlling  interest.  A controlling interest shall mean (i) in
   54  the case of a corporation, either thirty percent or more  of  the  total
   55  combined  voting  power  of all classes of stock of such corporation, or
   56  thirty percent or more of the capital, profits or beneficial interest in
       S. 2609                            24                            A. 3009
    1  such voting stock of such corporation, and (ii) in the case of  a  part-
    2  nership,  association,  trust or other entity, thirty percent or more of
    3  the capital, profits or beneficial interest in such partnership, associ-
    4  ation,  trust  or other entity.] EFFECTIVE RATE OF TAX.  "EFFECTIVE RATE
    5  OF TAX" MEANS, AS TO ANY STATE OR U.S. POSSESSION, THE MAXIMUM STATUTORY
    6  RATE OF TAX IMPOSED BY THE STATE OR  POSSESSION  ON  OR  MEASURED  BY  A
    7  RELATED  MEMBER'S NET INCOME MULTIPLIED BY THE APPORTIONMENT PERCENTAGE,
    8  IF ANY, APPLICABLE TO THE RELATED MEMBER UNDER THE LAWS OF  SAID  JURIS-
    9  DICTION.  FOR  PURPOSES OF THIS DEFINITION, THE EFFECTIVE RATE OF TAX AS
   10  TO ANY STATE OR U.S. POSSESSION IS ZERO WHERE THE RELATED  MEMBER'S  NET
   11  INCOME  TAX  LIABILITY IN SAID JURISDICTION IS REPORTED ON A COMBINED OR
   12  CONSOLIDATED RETURN INCLUDING BOTH THE TAXPAYER AND THE  RELATED  MEMBER
   13  WHERE  THE  REPORTED  TRANSACTIONS  BETWEEN THE TAXPAYER AND THE RELATED
   14  MEMBER ARE ELIMINATED OR OFFSET. ALSO, FOR PURPOSES OF THIS  DEFINITION,
   15  WHEN  COMPUTING  THE EFFECTIVE RATE OF TAX FOR A JURISDICTION IN WHICH A
   16  RELATED MEMBER'S NET INCOME IS ELIMINATED OR OFFSET BY A CREDIT OR SIMI-
   17  LAR ADJUSTMENT THAT IS DEPENDENT UPON THE RELATED  MEMBER  EITHER  MAIN-
   18  TAINING OR MANAGING INTANGIBLE PROPERTY OR COLLECTING INTEREST INCOME IN
   19  THAT  JURISDICTION,  THE  MAXIMUM  STATUTORY RATE OF TAX IMPOSED BY SAID
   20  JURISDICTION SHALL BE DECREASED TO REFLECT THE  STATUTORY  RATE  OF  TAX
   21  THAT APPLIES TO THE RELATED MEMBER AS EFFECTIVELY REDUCED BY SUCH CREDIT
   22  OR SIMILAR ADJUSTMENT.
   23    (C) Royalty payments. Royalty payments are payments directly connected
   24  to  the  acquisition,  use,  maintenance or management, ownership, sale,
   25  exchange, or any other disposition of licenses, trademarks,  copyrights,
   26  trade  names,  trade  dress,  service  marks, mask works, trade secrets,
   27  patents and any other similar types of intangible assets  as  determined
   28  by  the commissioner, and [includes] INCLUDE amounts allowable as inter-
   29  est deductions under section one hundred  sixty-three  of  the  internal
   30  revenue  code to the extent such amounts are directly or indirectly for,
   31  related to or in connection with the acquisition,  use,  maintenance  or
   32  management,  ownership, sale, exchange or disposition of such intangible
   33  assets.
   34    (D) Valid business purpose. A valid business purpose is  one  or  more
   35  business  purposes,  other  than the avoidance or reduction of taxation,
   36  which alone or in combination constitute the primary motivation for some
   37  business activity or transaction, which activity or transaction  changes
   38  in  a  meaningful  way, apart from tax effects, the economic position of
   39  the taxpayer. The economic position of the taxpayer includes an increase
   40  in the market share of the taxpayer, or the entry by the  taxpayer  into
   41  new business markets.
   42    (2)  Royalty  expense  add backs. (A) For the purpose of computing New
   43  York adjusted gross income, a taxpayer must add  back  royalty  payments
   44  [to  a]  DIRECTLY OR INDIRECTLY PAID, ACCRUED, OR INCURRED IN CONNECTION
   45  WITH ONE OR MORE DIRECT  OR  INDIRECT  TRANSACTIONS  WITH  ONE  OR  MORE
   46  related  [member]  MEMBERS during the taxable year to the extent deduct-
   47  ible in calculating federal taxable income.
   48    (B) [The add back of royalty payments shall not be required if and  to
   49  the extent that such payments meet either of the following conditions:
   50    (i)  the related member during the same taxable year directly or indi-
   51  rectly paid or incurred the amount to a person or entity that is  not  a
   52  related  member,  and such transaction was done for a valid business and
   53  the payments are made at arm's length;
   54    (ii) the royalty payments are paid or incurred  to  a  related  member
   55  organized  under the laws of a country other than the United States, are
   56  subject to a comprehensive income tax treaty between  such  country  and
       S. 2609                            25                            A. 3009
    1  the  United States, and are taxed in such country at a tax rate at least
    2  equal to that imposed by this state.
    3    (3)  Royalty  income exclusions. For the purpose of computing New York
    4  adjusted gross income, a taxpayer shall be  allowed  to  deduct  royalty
    5  payments  directly  or  indirectly received from a related member during
    6  the taxable year to the extent included in the taxpayer's federal  taxa-
    7  ble  income  unless  such  royalty  payments would not be required to be
    8  added back under paragraph two  of  this  subsection  or  other  similar
    9  provision  in  this chapter.] EXCEPTIONS. (I) THE ADJUSTMENT REQUIRED IN
   10  THIS SUBSECTION SHALL NOT APPLY TO THE PORTION OF  THE  ROYALTY  PAYMENT
   11  THAT  THE  TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE
   12  TYPE AND IN THE FORM SPECIFIED BY THE COMMISSIONER,  MEETS  ALL  OF  THE
   13  FOLLOWING  REQUIREMENTS:  (I)  THE  RELATED MEMBER WAS SUBJECT TO TAX IN
   14  THIS STATE OR ANOTHER STATE OR POSSESSION OF  THE  UNITED  STATES  OR  A
   15  FOREIGN  NATION  OR SOME COMBINATION THEREOF ON A TAX BASE THAT INCLUDED
   16  THE ROYALTY PAYMENT PAID, ACCRUED OR INCURRED BY THE TAXPAYER; (II)  THE
   17  RELATED MEMBER DURING THE SAME TAXABLE YEAR DIRECTLY OR INDIRECTLY PAID,
   18  ACCRUED  OR  INCURRED  SUCH  PORTION  TO  A PERSON THAT IS NOT A RELATED
   19  MEMBER; AND (III) THE TRANSACTION GIVING RISE  TO  THE  ROYALTY  PAYMENT
   20  BETWEEN  THE  TAXPAYER AND THE RELATED MEMBER WAS UNDERTAKEN FOR A VALID
   21  BUSINESS PURPOSE.
   22    (II) THE ADJUSTMENT REQUIRED IN THIS SUBSECTION SHALL NOT APPLY IF THE
   23  TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE  TYPE  AND
   24  IN  THE FORM SPECIFIED BY THE COMMISSIONER, THAT: (I) THE RELATED MEMBER
   25  WAS SUBJECT TO TAX ON OR MEASURED BY ITS NET INCOME  IN  THIS  STATE  OR
   26  ANOTHER  STATE  OR  POSSESSION  OF THE UNITED STATES OR SOME COMBINATION
   27  THEREOF; (II) THE TAX BASE FOR SAID TAX   INCLUDED THE  ROYALTY  PAYMENT
   28  PAID,  ACCRUED  OR  INCURRED  BY  THE  TAXPAYER; AND (III) THE AGGREGATE
   29  EFFECTIVE RATE OF TAX APPLIED TO THE RELATED MEMBER IN  THOSE  JURISDIC-
   30  TIONS  IS  NO LESS THAN EIGHTY PERCENT OF THE STATUTORY RATE OF TAX THAT
   31  APPLIED TO THE TAXPAYER UNDER SECTION SIX HUNDRED ONE  OF  THIS  ARTICLE
   32  FOR THE TAXABLE YEAR.
   33    (III)  THE  ADJUSTMENT  REQUIRED IN THIS SUBSECTION SHALL NOT APPLY IF
   34  THE TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF  THE  TYPE
   35  AND  IN  THE  FORM  SPECIFIED BY THE COMMISSIONER, THAT: (I) THE ROYALTY
   36  PAYMENT WAS PAID, ACCRUED OR INCURRED  TO  A  RELATED  MEMBER  ORGANIZED
   37  UNDER  THE  LAWS  OF  A  COUNTRY  OTHER THAN THE UNITED STATES; (II) THE
   38  RELATED MEMBER'S INCOME FROM THE TRANSACTION WAS SUBJECT TO A COMPREHEN-
   39  SIVE INCOME TAX TREATY BETWEEN SUCH COUNTRY AND THE UNITED STATES; (III)
   40  THE RELATED MEMBER WAS SUBJECT TO TAX IN A FOREIGN NATION ON A TAX  BASE
   41  THAT  INCLUDED  THE  ROYALTY  PAYMENT  PAID,  ACCRUED OR INCURRED BY THE
   42  TAXPAYER; (IV) THE RELATED MEMBER'S  INCOME  FROM  THE  TRANSACTION  WAS
   43  TAXED  IN  SUCH  COUNTRY AT AN EFFECTIVE TAX RATE AT LEAST EQUAL TO THAT
   44  IMPOSED BY THIS STATE; AND (V) THE ROYALTY PAYMENT WAS PAID, ACCRUED  OR
   45  INCURRED PURSUANT TO A TRANSACTION THAT WAS UNDERTAKEN FOR A VALID BUSI-
   46  NESS PURPOSE AND USING TERMS THAT REFLECT AN ARM'S LENGTH RELATIONSHIP.
   47    (IV) THE ADJUSTMENT REQUIRED IN THIS SUBSECTION SHALL NOT APPLY IF THE
   48  TAXPAYER AND THE COMMISSIONER AGREE IN WRITING TO THE APPLICATION OR USE
   49  OF  ALTERNATIVE  ADJUSTMENTS OR COMPUTATIONS.   THE COMMISSIONER MAY, IN
   50  HIS OR HER DISCRETION, AGREE TO THE APPLICATION OR  USE  OF  ALTERNATIVE
   51  ADJUSTMENTS OR COMPUTATIONS WHEN HE OR SHE CONCLUDES THAT IN THE ABSENCE
   52  OF  SUCH  AGREEMENT  THE  INCOME  OF  THE TAXPAYER WOULD NOT BE PROPERLY
   53  REFLECTED.
   54    S 6. Paragraph 17 of subsection (e) of section 1453 of the tax law  is
   55  REPEALED.
       S. 2609                            26                            A. 3009
    1    S  7.  Subsection  (r)  of  section 1453 of the tax law, as amended by
    2  section 5 of part M of chapter 686 of the laws of 2003, subparagraph (A)
    3  of paragraph 2 as amended by section 5 of part J of chapter  60  of  the
    4  laws of 2007, is amended to read as follows:
    5    (r)  Related  members  expense  add back [and income exclusion].   (1)
    6  Definitions. (A) Related  member  [or  members.  For  purposes  of  this
    7  subsection,  the  term  related member or members means a person, corpo-
    8  ration, or other entity, including an entity that is treated as a  part-
    9  nership  or other pass-through vehicle for purposes of federal taxation,
   10  whether such person, corporation or entity is a taxpayer or  not,  where
   11  one  such  person,  corporation,  or  entity, or set of related persons,
   12  corporations or entities, directly or  indirectly  owns  or  controls  a
   13  controlling  interest  in  another  entity.  Such entity or entities may
   14  include all taxpayers under article nine, nine-A, thirteen,  twenty-two,
   15  thirty-two,  thirty-three  or thirty-three-A of this chapter].  "RELATED
   16  MEMBER" MEANS A RELATED PERSON AS DEFINED IN SUBPARAGRAPH (C)  OF  PARA-
   17  GRAPH  THREE OF SUBSECTION (B) OF SECTION FOUR HUNDRED SIXTY-FIVE OF THE
   18  INTERNAL REVENUE CODE, EXCEPT THAT "FIFTY PERCENT" SHALL BE  SUBSTITUTED
   19  FOR "TEN PERCENT".
   20    (B)  [Controlling  interest.  A controlling interest shall mean (i) in
   21  the case of a corporation, either thirty percent or more  of  the  total
   22  combined  voting  power  of all classes of stock of such corporation, or
   23  thirty percent or more of the capital, profits or beneficial interest in
   24  such voting stock of such corporation, and (ii) in the case of  a  part-
   25  nership,  association,  trust or other entity, thirty percent or more of
   26  the capital, profits or beneficial interest in such partnership, associ-
   27  ation, trust or other entity.] EFFECTIVE RATE OF TAX. "EFFECTIVE RATE OF
   28  TAX" MEANS, AS TO ANY STATE OR U.S.  POSSESSION, THE  MAXIMUM  STATUTORY
   29  RATE  OF  TAX  IMPOSED  BY  THE  STATE OR POSSESSION ON OR MEASURED BY A
   30  RELATED MEMBER'S NET INCOME MULTIPLIED BY THE APPORTIONMENT  PERCENTAGE,
   31  IF  ANY,  APPLICABLE TO THE RELATED MEMBER UNDER THE LAWS OF SAID JURIS-
   32  DICTION. FOR PURPOSES OF THIS DEFINITION, THE EFFECTIVE RATE OF  TAX  AS
   33  TO  ANY  STATE OR U.S. POSSESSION IS ZERO WHERE THE RELATED MEMBER'S NET
   34  INCOME TAX LIABILITY IN SAID JURISDICTION IS REPORTED ON A  COMBINED  OR
   35  CONSOLIDATED  RETURN  INCLUDING BOTH THE TAXPAYER AND THE RELATED MEMBER
   36  WHERE THE REPORTED TRANSACTIONS BETWEEN THE  TAXPAYER  AND  THE  RELATED
   37  MEMBER  ARE ELIMINATED OR OFFSET. ALSO, FOR PURPOSES OF THIS DEFINITION,
   38  WHEN COMPUTING THE EFFECTIVE RATE OF TAX FOR A JURISDICTION IN  WHICH  A
   39  RELATED MEMBER'S NET INCOME IS ELIMINATED OR OFFSET BY A CREDIT OR SIMI-
   40  LAR  ADJUSTMENT  THAT  IS DEPENDENT UPON THE RELATED MEMBER EITHER MAIN-
   41  TAINING OR MANAGING INTANGIBLE PROPERTY OR COLLECTING INTEREST INCOME IN
   42  THAT JURISDICTION, THE MAXIMUM STATUTORY RATE OF  TAX  IMPOSED  BY  SAID
   43  JURISDICTION  SHALL  BE  DECREASED  TO REFLECT THE STATUTORY RATE OF TAX
   44  THAT APPLIES TO THE RELATED MEMBER AS EFFECTIVELY REDUCED BY SUCH CREDIT
   45  OR SIMILAR ADJUSTMENT.
   46    (C) Royalty payments. Royalty payments are payments directly connected
   47  to the acquisition, use, maintenance  or  management,  ownership,  sale,
   48  exchange,  or any other disposition of licenses, trademarks, copyrights,
   49  trade names, trade dress, service  marks,  mask  works,  trade  secrets,
   50  patents  and  any other similar types of intangible assets as determined
   51  by the commissioner, and [includes] INCLUDE amounts allowable as  inter-
   52  est  deductions  under  section  one hundred sixty-three of the internal
   53  revenue code to the extent such amounts are directly or indirectly  for,
   54  related  to  or  in connection with the acquisition, use, maintenance or
   55  management, ownership, sale, exchange or disposition of such  intangible
   56  assets.
       S. 2609                            27                            A. 3009
    1    (D)  Valid  business  purpose. A valid business purpose is one or more
    2  business purposes, other than the avoidance or  reduction  of  taxation,
    3  which alone or in combination constitute the primary motivation for some
    4  business  activity or transaction, which activity or transaction changes
    5  in  a  meaningful  way, apart from tax effects, the economic position of
    6  the taxpayer. The economic position of the taxpayer includes an increase
    7  in the market share of the taxpayer, or the entry by the  taxpayer  into
    8  new business markets.
    9    (2) Royalty expense add backs. (A) Except where a taxpayer is included
   10  in a combined return with a related member pursuant to subsection (f) of
   11  section  fourteen  hundred sixty-two of this article, for the purpose of
   12  computing entire net income, a taxpayer must add back  royalty  payments
   13  [to  a]  DIRECTLY OR INDIRECTLY PAID, ACCRUED, OR INCURRED IN CONNECTION
   14  WITH ONE OR MORE DIRECT  OR  INDIRECT  TRANSACTIONS  WITH  ONE  OR  MORE
   15  related  [member]  MEMBERS during the taxable year to the extent deduct-
   16  ible in calculating federal taxable income.
   17    (B) [The add back of royalty payments shall not be required if and  to
   18  the extent that such payments meet either of the following conditions:
   19    (i)  the related member during the same taxable year directly or indi-
   20  rectly paid or incurred the amount to a person or entity that is  not  a
   21  related  member,  and such transaction was done for a valid business and
   22  the payments are made at arm's length;
   23    (ii) the royalty payments are paid or incurred  to  a  related  member
   24  organized  under the laws of a country other than the United States, are
   25  subject to a comprehensive income tax treaty between  such  country  and
   26  the  United States, and are taxed in such country at a tax rate at least
   27  equal to that imposed by this state.
   28    (3) Royalty income exclusions. For the purpose of computing entire net
   29  income, a taxpayer shall be allowed to deduct royalty payments  directly
   30  or  indirectly received from a related member during the taxable year to
   31  the extent included in the taxpayer's federal taxable income unless such
   32  royalty payments would not be required to be added back under  paragraph
   33  two  of  this  subsection  or  other similar provision in this chapter.]
   34  EXCEPTIONS. (I) THE ADJUSTMENT REQUIRED IN  THIS  SUBSECTION  SHALL  NOT
   35  APPLY  TO  THE  PORTION  OF THE ROYALTY PAYMENT THAT THE TAXPAYER ESTAB-
   36  LISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE  AND  IN  THE  FORM
   37  SPECIFIED  BY THE COMMISSIONER, MEETS ALL OF THE FOLLOWING REQUIREMENTS:
   38  (I) THE RELATED MEMBER WAS SUBJECT TO TAX IN THIS STATE OR ANOTHER STATE
   39  OR POSSESSION OF THE UNITED STATES OR A FOREIGN NATION OR SOME  COMBINA-
   40  TION  THEREOF  ON  A  TAX  BASE  THAT INCLUDED THE ROYALTY PAYMENT PAID,
   41  ACCRUED OR INCURRED BY THE TAXPAYER; (II) THE RELATED MEMBER DURING  THE
   42  SAME  TAXABLE YEAR DIRECTLY OR INDIRECTLY PAID, ACCRUED OR INCURRED SUCH
   43  PORTION TO A PERSON THAT IS NOT A RELATED MEMBER; AND (III)  THE  TRANS-
   44  ACTION  GIVING  RISE TO THE ROYALTY PAYMENT BETWEEN THE TAXPAYER AND THE
   45  RELATED MEMBER WAS UNDERTAKEN FOR A VALID BUSINESS PURPOSE.
   46    (II) THE ADJUSTMENT REQUIRED IN THIS SUBSECTION SHALL NOT APPLY IF THE
   47  TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE  TYPE  AND
   48  IN  THE FORM SPECIFIED BY THE COMMISSIONER, THAT: (I) THE RELATED MEMBER
   49  WAS SUBJECT TO TAX ON OR MEASURED BY ITS NET INCOME  IN  THIS  STATE  OR
   50  ANOTHER  STATE  OR  POSSESSION  OF THE UNITED STATES OR SOME COMBINATION
   51  THEREOF; (II) THE TAX BASE FOR SAID TAX  INCLUDED  THE  ROYALTY  PAYMENT
   52  PAID,  ACCRUED  OR  INCURRED  BY  THE  TAXPAYER; AND (III) THE AGGREGATE
   53  EFFECTIVE RATE OF TAX APPLIED TO THE RELATED MEMBER IN  THOSE  JURISDIC-
   54  TIONS  IS  NO LESS THAN EIGHTY PERCENT OF THE STATUTORY RATE OF TAX THAT
   55  APPLIED TO THE TAXPAYER UNDER SECTION  FOURTEEN  HUNDRED  FIFTY-FIVE  OF
   56  THIS ARTICLE FOR THE TAXABLE YEAR.
       S. 2609                            28                            A. 3009
    1    (III)  THE  ADJUSTMENT  REQUIRED IN THIS SUBSECTION SHALL NOT APPLY IF
    2  THE TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF  THE  TYPE
    3  AND  IN  THE  FORM  SPECIFIED BY THE COMMISSIONER, THAT: (I) THE ROYALTY
    4  PAYMENT WAS PAID, ACCRUED OR INCURRED  TO  A  RELATED  MEMBER  ORGANIZED
    5  UNDER  THE  LAWS  OF  A  COUNTRY  OTHER THAN THE UNITED STATES; (II) THE
    6  RELATED MEMBER'S INCOME FROM THE TRANSACTION WAS SUBJECT TO A COMPREHEN-
    7  SIVE INCOME TAX TREATY BETWEEN SUCH COUNTRY AND THE UNITED STATES; (III)
    8  THE RELATED MEMBER WAS SUBJECT TO TAX IN A FOREIGN NATION ON A TAX  BASE
    9  THAT  INCLUDED  THE  ROYALTY  PAYMENT  PAID,  ACCRUED OR INCURRED BY THE
   10  TAXPAYER; (IV) THE RELATED MEMBER'S  INCOME  FROM  THE  TRANSACTION  WAS
   11  TAXED IN SUCH COUNTRY AT AN EFFECTIVE RATE OF TAX AT LEAST EQUAL TO THAT
   12  IMPOSED  BY THIS STATE; AND (V) THE ROYALTY PAYMENT WAS PAID, ACCRUED OR
   13  INCURRED PURSUANT TO A TRANSACTION THAT WAS UNDERTAKEN FOR A VALID BUSI-
   14  NESS PURPOSE AND USING TERMS THAT REFLECT AN ARM'S LENGTH RELATIONSHIP.
   15    (IV) THE ADJUSTMENT REQUIRED IN THIS SUBSECTION SHALL NOT APPLY IF THE
   16  TAXPAYER AND THE COMMISSIONER AGREE IN WRITING TO THE APPLICATION OR USE
   17  OF ALTERNATIVE ADJUSTMENTS OR COMPUTATIONS. THE COMMISSIONER MAY, IN HIS
   18  OR HER DISCRETION, AGREE  TO  THE  APPLICATION  OR  USE  OF  ALTERNATIVE
   19  ADJUSTMENTS OR COMPUTATIONS WHEN HE OR SHE CONCLUDES THAT IN THE ABSENCE
   20  OF  SUCH  AGREEMENT  THE  INCOME  OF  THE TAXPAYER WOULD NOT BE PROPERLY
   21  REFLECTED.
   22    S 8. Paragraph 14 of subdivision (b) of section 1503 of the  tax  law,
   23  as  amended  by  section 7 of part M of chapter 686 of the laws of 2003,
   24  clause (i) of subparagraph (B) as amended by section  6  of  part  J  of
   25  chapter 60 of the laws of 2007, is amended to read as follows:
   26    (14)  Related  members  expense  add back [and income exclusion].  (A)
   27  Definitions. (i) Related member [or members. For purposes of this  para-
   28  graph,  the  term related member or members means a person, corporation,
   29  or other entity, including an entity that is treated as a partnership or
   30  other pass-through vehicle for purposes  of  federal  taxation,  whether
   31  such  person, corporation or entity is a taxpayer or not, where one such
   32  person, corporation, or entity, or set of related persons,  corporations
   33  or  entities,  directly  or  indirectly  owns  or controls a controlling
   34  interest in another entity. Such entity  or  entities  may  include  all
   35  taxpayers  under article nine, nine-A, thirteen, twenty-two, thirty-two,
   36  thirty-three or thirty-three-A of this chapter]. "RELATED MEMBER"  MEANS
   37  A  RELATED  PERSON  AS DEFINED IN SUBPARAGRAPH (C) OF PARAGRAPH THREE OF
   38  SUBSECTION (B) OF SECTION FOUR HUNDRED SIXTY-FIVE OF THE INTERNAL REVEN-
   39  UE CODE, EXCEPT THAT "FIFTY  PERCENT"  SHALL  BE  SUBSTITUTED  FOR  "TEN
   40  PERCENT".
   41    (ii)  [Controlling  interest. A controlling interest shall mean (I) in
   42  the case of a corporation, either thirty percent or more  of  the  total
   43  combined  voting  power  of all classes of stock of such corporation, or
   44  thirty percent or more of the capital, profits or beneficial interest in
   45  such voting stock of such corporation, and (II) in the case of  a  part-
   46  nership,  association,  trust or other entity, thirty percent or more of
   47  the capital, profits or beneficial interest in such partnership, associ-
   48  ation, trust or other entity.] EFFECTIVE RATE OF TAX. "EFFECTIVE RATE OF
   49  TAX" MEANS, AS TO ANY STATE OR U.S. POSSESSION,  THE  MAXIMUM  STATUTORY
   50  RATE  OF  TAX  IMPOSED  BY  THE  STATE OR POSSESSION ON OR MEASURED BY A
   51  RELATED MEMBER'S NET INCOME MULTIPLIED BY THE APPORTIONMENT  PERCENTAGE,
   52  IF  ANY,  APPLICABLE TO THE RELATED MEMBER UNDER THE LAWS OF SAID JURIS-
   53  DICTION. FOR PURPOSES OF THIS DEFINITION, THE EFFECTIVE RATE OF  TAX  AS
   54  TO  ANY  STATE OR U.S. POSSESSION IS ZERO WHERE THE RELATED MEMBER'S NET
   55  INCOME TAX LIABILITY IN SAID JURISDICTION IS REPORTED ON A  COMBINED  OR
   56  CONSOLIDATED  RETURN  INCLUDING BOTH THE TAXPAYER AND THE RELATED MEMBER
       S. 2609                            29                            A. 3009
    1  WHERE THE REPORTED TRANSACTIONS BETWEEN THE  TAXPAYER  AND  THE  RELATED
    2  MEMBER  ARE ELIMINATED OR OFFSET. ALSO, FOR PURPOSES OF THIS DEFINITION,
    3  WHEN COMPUTING THE EFFECTIVE RATE OF TAX FOR A JURISDICTION IN  WHICH  A
    4  RELATED MEMBER'S NET INCOME IS ELIMINATED OR OFFSET BY A CREDIT OR SIMI-
    5  LAR  ADJUSTMENT  THAT  IS DEPENDENT UPON THE RELATED MEMBER EITHER MAIN-
    6  TAINING OR MANAGING  INTANGIBLE PROPERTY OR COLLECTING  INTEREST  INCOME
    7  IN  THAT JURISDICTION, THE MAXIMUM STATUTORY RATE OF TAX IMPOSED BY SAID
    8  JURISDICTION SHALL BE DECREASED TO REFLECT THE  STATUTORY  RATE  OF  TAX
    9  THAT APPLIES TO THE RELATED MEMBER AS EFFECTIVELY REDUCED BY SUCH CREDIT
   10  OR SIMILAR ADJUSTMENT.
   11    (iii)   Royalty  payments.  Royalty  payments  are  payments  directly
   12  connected to the acquisition, use, maintenance or management, ownership,
   13  sale, exchange, or any other disposition of licenses, trademarks,  copy-
   14  rights,  trade  names,  trade  dress,  service  marks, mask works, trade
   15  secrets, patents and any other similar types  of  intangible  assets  as
   16  determined by the commissioner, and [includes] INCLUDE amounts allowable
   17  as  interest  deductions  under  section  one hundred sixty-three of the
   18  internal revenue code to the extent such amounts are directly  or  indi-
   19  rectly for, related to or in connection with the acquisition, use, main-
   20  tenance  or management, ownership, sale, exchange or disposition of such
   21  intangible assets.
   22    (iv) Valid business purpose. A valid business purpose is one  or  more
   23  business  purposes,  other  than the avoidance or reduction of taxation,
   24  which alone or in combination constitute the primary motivation for some
   25  business activity or transaction, which activity or transaction  changes
   26  in  a  meaningful  way, apart from tax effects, the economic position of
   27  the taxpayer. The economic position of the taxpayer includes an increase
   28  in the market share of the taxpayer, or the entry by the  taxpayer  into
   29  new business markets.
   30    (B) Royalty expense add backs. (i) Except where a taxpayer is included
   31  in  a  combined return with a related member pursuant to subdivision (f)
   32  of section fifteen hundred fifteen of this article, for the  purpose  of
   33  computing  entire  net income, a taxpayer must add back royalty payments
   34  [to a] DIRECTLY OR INDIRECTLY PAID, ACCRUED, OR INCURRED  IN  CONNECTION
   35  WITH  ONE  OR  MORE  DIRECT  OR  INDIRECT  TRANSACTIONS WITH ONE OR MORE
   36  related [member] MEMBERS during the taxable year to the  extent  deduct-
   37  ible in calculating federal taxable income.
   38    (ii) [The add back of royalty payments shall not be required if and to
   39  the extent that such payments meet either of the following conditions:
   40    (I)  the related member during the same taxable year directly or indi-
   41  rectly paid or incurred the amount to a person or entity that is  not  a
   42  related  member,  and such transaction was done for a valid business and
   43  the payments are made at arm's length;
   44    (II) the royalty payments are paid or incurred  to  a  related  member
   45  organized  under the laws of a country other than the United States, are
   46  subject to a comprehensive income tax treaty between  such  country  and
   47  the  United States, and are taxed in such country at a tax rate at least
   48  equal to that imposed by this state.
   49    (C) Royalty income exclusions. For the purpose of computing entire net
   50  income, a taxpayer shall be allowed to deduct royalty payments  directly
   51  or  indirectly received from a related member during the taxable year to
   52  the extent included in the taxpayer's federal taxable income unless such
   53  royalty payments would not be required to be added back  under  subpara-
   54  graph (B) of this paragraph or other similar provision in this chapter.]
   55  EXCEPTIONS.    (I)  THE  ADJUSTMENT REQUIRED IN THIS PARAGRAPH SHALL NOT
   56  APPLY TO THE PORTION OF THE ROYALTY PAYMENT  THAT  THE  TAXPAYER  ESTAB-
       S. 2609                            30                            A. 3009
    1  LISHES,  BY  CLEAR  AND  CONVINCING EVIDENCE OF THE TYPE AND IN THE FORM
    2  SPECIFIED BY THE COMMISSIONER, MEETS ALL OF THE FOLLOWING  REQUIREMENTS:
    3  (A) THE RELATED MEMBER WAS SUBJECT TO TAX IN THIS STATE OR ANOTHER STATE
    4  OR  POSSESSION OF THE UNITED STATES OR A FOREIGN NATION OR SOME COMBINA-
    5  TION THEREOF ON A TAX BASE  THAT  INCLUDED  THE  ROYALTY  PAYMENT  PAID,
    6  ACCRUED  OR  INCURRED BY THE TAXPAYER; (B) THE RELATED MEMBER DURING THE
    7  SAME TAXABLE YEAR DIRECTLY OR INDIRECTLY PAID, ACCRUED OR INCURRED  SUCH
    8  PORTION  TO  A  PERSON  THAT IS NOT A RELATED MEMBER; AND (C) THE TRANS-
    9  ACTION GIVING RISE TO THE ROYALTY PAYMENT BETWEEN THE TAXPAYER  AND  THE
   10  RELATED MEMBER WAS UNDERTAKEN FOR A VALID BUSINESS PURPOSE.
   11    (II)  THE ADJUSTMENT REQUIRED IN THIS PARAGRAPH SHALL NOT APPLY IF THE
   12  TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE  TYPE  AND
   13  IN  THE FORM SPECIFIED BY THE COMMISSIONER, THAT: (A) THE RELATED MEMBER
   14  WAS SUBJECT TO TAX ON OR MEASURED BY ITS NET INCOME  IN  THIS  STATE  OR
   15  ANOTHER  STATE  OR  POSSESSION  OF THE UNITED STATES OR SOME COMBINATION
   16  THEREOF; (B) THE TAX BASE FOR SAID  TAX  INCLUDED  THE  ROYALTY  PAYMENT
   17  PAID,  ACCRUED OR INCURRED BY THE TAXPAYER; AND (C) THE AGGREGATE EFFEC-
   18  TIVE RATE OF TAX APPLIED TO THE RELATED MEMBER IN THOSE JURISDICTIONS IS
   19  NO LESS THAN EIGHTY PERCENT OF THE STATUTORY RATE OF TAX THAT APPLIED TO
   20  THE TAXPAYER UNDER SECTION FIFTEEN HUNDRED TWO, FIFTEEN  HUNDRED  TWO-A,
   21  OR FIFTEEN HUNDRED TWO-B OF THIS ARTICLE FOR THE TAXABLE YEAR.
   22    (III) THE ADJUSTMENT REQUIRED IN THIS PARAGRAPH SHALL NOT APPLY IF THE
   23  TAXPAYER  ESTABLISHES,  BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE AND
   24  IN THE FORM SPECIFIED BY THE COMMISSIONER, THAT: (A) THE ROYALTY PAYMENT
   25  WAS PAID, ACCRUED OR INCURRED TO A RELATED MEMBER  ORGANIZED  UNDER  THE
   26  LAWS OF A COUNTRY OTHER THAN THE UNITED STATES; (B) THE RELATED MEMBER'S
   27  INCOME  FROM  THE  TRANSACTION WAS SUBJECT TO A COMPREHENSIVE INCOME TAX
   28  TREATY BETWEEN SUCH COUNTRY AND  THE  UNITED  STATES;  (C)  THE  RELATED
   29  MEMBER  WAS  SUBJECT  TO  TAX  IN  A  FOREIGN  NATION ON A TAX BASE THAT
   30  INCLUDED THE ROYALTY PAYMENT PAID, ACCRUED OR INCURRED BY THE  TAXPAYER;
   31  (D)  THE  RELATED MEMBER'S INCOME FROM THE TRANSACTION WAS TAXED IN SUCH
   32  COUNTRY AT AN EFFECTIVE RATE OF TAX AT LEAST EQUAL TO  THAT  IMPOSED  BY
   33  THIS  STATE;  AND  (E) THE ROYALTY PAYMENT WAS PAID, ACCRUED OR INCURRED
   34  PURSUANT TO A TRANSACTION THAT  WAS  UNDERTAKEN  FOR  A  VALID  BUSINESS
   35  PURPOSE AND USING TERMS THAT REFLECT AN ARM'S LENGTH RELATIONSHIP.
   36    (IV)  THE ADJUSTMENT REQUIRED IN THIS PARAGRAPH SHALL NOT APPLY IF THE
   37  TAXPAYER AND THE COMMISSIONER AGREE IN WRITING TO THE APPLICATION OR USE
   38  OF ALTERNATIVE ADJUSTMENTS OR COMPUTATIONS. THE COMMISSIONER MAY, IN HIS
   39  OR HER DISCRETION, AGREE  TO  THE  APPLICATION  OR  USE  OF  ALTERNATIVE
   40  ADJUSTMENTS OR COMPUTATIONS WHEN HE OR SHE CONCLUDES THAT IN THE ABSENCE
   41  OF  SUCH  AGREEMENT  THE  INCOME  OF  THE TAXPAYER WOULD NOT BE PROPERLY
   42  REFLECTED.
   43    S 9. Subdivision (e) of section 11-506 of the administrative  code  of
   44  the city of New York, as added by section 17 of part M of chapter 686 of
   45  the  laws  of 2003 and as relettered by chapter 633 of the laws of 2005,
   46  is amended to read as follows:
   47    (e) Related members expense add back  [and  income  exclusion].    (1)
   48  Definitions. (A) Related member [or members. For purposes of this subdi-
   49  vision,  the term related member or members means a person, corporation,
   50  or other entity, including an entity that is treated as a partnership or
   51  other pass-through vehicle for purposes  of  federal  taxation,  whether
   52  such  person, corporation or entity is a taxpayer or not, where one such
   53  person, corporation, or entity, or set of related persons,  corporations
   54  or  entities,  directly  or  indirectly  owns  or controls a controlling
   55  interest in another entity. Such entity  or  entities  may  include  all
   56  taxpayers  under this title]. "RELATED MEMBER" MEANS A RELATED PERSON AS
       S. 2609                            31                            A. 3009
    1  DEFINED IN SUBPARAGRAPH (C) OF PARAGRAPH  THREE  OF  SUBSECTION  (B)  OF
    2  SECTION  FOUR  HUNDRED  SIXTY-FIVE  OF THE INTERNAL REVENUE CODE, EXCEPT
    3  THAT "FIFTY PERCENT" SHALL BE SUBSTITUTED FOR "TEN PERCENT".
    4    (B)  [Controlling  interest.  A controlling interest shall mean (i) in
    5  the case of a corporation, either thirty percent or more  of  the  total
    6  combined  voting  power  of all classes of stock of such corporation, or
    7  thirty percent or more of the capital, profits or beneficial interest in
    8  such voting stock of such corporation, and (ii) in the case of  a  part-
    9  nership,  association,  trust or other entity, thirty percent or more of
   10  the capital, profits or beneficial interest in such partnership, associ-
   11  ation, trust or other entity.] EFFECTIVE RATE OF TAX. "EFFECTIVE RATE OF
   12  TAX" MEANS, AS TO ANY CITY, THE MAXIMUM STATUTORY RATE OF TAX IMPOSED BY
   13  THE CITY ON OR MEASURED BY A RELATED MEMBER'S NET INCOME  MULTIPLIED  BY
   14  THE  APPORTIONMENT  PERCENTAGE, IF ANY, APPLICABLE TO THE RELATED MEMBER
   15  UNDER THE LAWS OF SAID JURISDICTION. FOR PURPOSES  OF  THIS  DEFINITION,
   16  THE  EFFECTIVE  RATE  OF  TAX  AS  TO ANY CITY IS ZERO WHERE THE RELATED
   17  MEMBER'S NET INCOME TAX LIABILITY IN SAID CITY IS REPORTED ON A COMBINED
   18  OR CONSOLIDATED RETURN INCLUDING  BOTH  THE  TAXPAYER  AND  THE  RELATED
   19  MEMBER  WHERE  THE  REPORTED  TRANSACTIONS  BETWEEN THE TAXPAYER AND THE
   20  RELATED MEMBER ARE ELIMINATED OR OFFSET.  ALSO,  FOR  PURPOSES  OF  THIS
   21  DEFINITION, WHEN COMPUTING THE EFFECTIVE RATE OF TAX FOR A CITY IN WHICH
   22  A  RELATED  MEMBER'S  NET  INCOME IS ELIMINATED OR OFFSET BY A CREDIT OR
   23  SIMILAR ADJUSTMENT THAT IS DEPENDENT  UPON  THE  RELATED  MEMBER  EITHER
   24  MAINTAINING  OR  MANAGING  INTANGIBLE  PROPERTY  OR  COLLECTING INTEREST
   25  INCOME IN THAT CITY, THE MAXIMUM STATUTORY RATE OF TAX IMPOSED  BY  SAID
   26  CITY  SHALL  BE  DECREASED  TO  REFLECT  THE  STATUTORY RATE OF TAX THAT
   27  APPLIES TO THE RELATED MEMBER AS EFFECTIVELY REDUCED BY SUCH  CREDIT  OR
   28  SIMILAR ADJUSTMENT.
   29    (C) Royalty payments. Royalty payments are payments directly connected
   30  to  the  acquisition,  use,  maintenance or management, ownership, sale,
   31  exchange, or any other disposition of licenses, trademarks,  copyrights,
   32  trade  names,  trade  dress,  service  marks, mask works, trade secrets,
   33  patents and any other similar types of intangible assets  as  determined
   34  by the commissioner of finance, and [includes] INCLUDE amounts allowable
   35  as  interest  deductions  under  section  one hundred sixty-three of the
   36  internal revenue code to the extent such amounts are directly  or  indi-
   37  rectly for, related to or in connection with the acquisition, use, main-
   38  tenance  or management, ownership, sale, exchange or disposition of such
   39  intangible assets.
   40    (D) Valid business purpose. A valid business purpose is  one  or  more
   41  business  purposes,  other  than the avoidance or reduction of taxation,
   42  which alone or in combination constitute the primary motivation for some
   43  business activity or transaction, which activity or transaction  changes
   44  in  a  meaningful  way, apart from tax effects, the economic position of
   45  the taxpayer. The economic position of the taxpayer includes an increase
   46  in the market share of the taxpayer, or the entry by the  taxpayer  into
   47  new business markets.
   48    (2)  Royalty expense add backs. (A) For the purpose of computing unin-
   49  corporated business entire net income, a taxpayer must add back  royalty
   50  payments  [to  a]  DIRECTLY  OR INDIRECTLY PAID, ACCRUED, OR INCURRED IN
   51  CONNECTION WITH ONE OR MORE DIRECT OR INDIRECT TRANSACTIONS WITH ONE  OR
   52  MORE  related  [member]  MEMBERS  during  the taxable year to the extent
   53  deductible in calculating federal taxable income.
   54    (B) [The add back of royalty payments shall not be required if and  to
   55  the extent that such payments meet either of the following conditions:
       S. 2609                            32                            A. 3009
    1    (i)  the related member during the same taxable year directly or indi-
    2  rectly paid or incurred the amount to a person or entity that is  not  a
    3  related  member,  and such transaction was done for a valid business and
    4  the payments are made at arm's length;
    5    (ii)  the  royalty  payments  are paid or incurred to a related member
    6  organized under the laws of a country other than the United States,  are
    7  subject  to  a  comprehensive income tax treaty between such country and
    8  the United States, and are taxed in such country at a tax rate at  least
    9  equal to that imposed by this state.
   10    (3) Royalty income exclusions. For the purpose of computing unincorpo-
   11  rated  business entire net income, a taxpayer shall be allowed to deduct
   12  royalty payments directly or indirectly received from a  related  member
   13  during the taxable year to the extent included in the taxpayer's federal
   14  taxable  income unless such royalty payments would not be required to be
   15  added back under paragraph two of  this  subdivision  or  other  similar
   16  provision  in  this chapter.] EXCEPTIONS. (I) THE ADJUSTMENT REQUIRED IN
   17  THIS SUBDIVISION SHALL NOT APPLY TO THE PORTION OF THE  ROYALTY  PAYMENT
   18  THAT  THE  TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE
   19  TYPE AND IN THE FORM SPECIFIED BY THE COMMISSIONER OF FINANCE, MEETS ALL
   20  OF THE FOLLOWING REQUIREMENTS: (I) THE RELATED MEMBER WAS SUBJECT TO TAX
   21  IN THIS CITY OR ANOTHER CITY WITHIN  THE  UNITED  STATES  OR  A  FOREIGN
   22  NATION  OR  SOME  COMBINATION  THEREOF  ON  A TAX BASE THAT INCLUDED THE
   23  ROYALTY PAYMENT PAID, ACCRUED OR INCURRED  BY  THE  TAXPAYER;  (II)  THE
   24  RELATED MEMBER DURING THE SAME TAXABLE YEAR DIRECTLY OR INDIRECTLY PAID,
   25  ACCRUED  OR  INCURRED  SUCH  PORTION  TO  A PERSON THAT IS NOT A RELATED
   26  MEMBER; AND (III) THE TRANSACTION GIVING RISE  TO  THE  ROYALTY  PAYMENT
   27  BETWEEN  THE  TAXPAYER AND THE RELATED MEMBER WAS UNDERTAKEN FOR A VALID
   28  BUSINESS PURPOSE.
   29    (II) THE ADJUSTMENT REQUIRED IN THIS SUBDIVISION SHALL  NOT  APPLY  IF
   30  THE  TAXPAYER  ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE
   31  AND IN THE FORM SPECIFIED BY THE COMMISSIONER OF FINANCE, THAT: (I)  THE
   32  RELATED  MEMBER  WAS  SUBJECT TO TAX ON OR MEASURED BY ITS NET INCOME IN
   33  THIS CITY OR ANOTHER CITY WITHIN THE UNITED STATES, OR SOME  COMBINATION
   34  THEREOF;  (II)  THE  TAX  BASE FOR SAID TAX INCLUDED THE ROYALTY PAYMENT
   35  PAID, ACCRUED OR INCURRED BY  THE  TAXPAYER;  AND  (III)  THE  AGGREGATE
   36  EFFECTIVE  RATE  OF TAX APPLIED TO THE RELATED MEMBER IN THOSE JURISDIC-
   37  TIONS IS NO LESS THAN EIGHTY PERCENT OF THE STATUTORY RATE OF  TAX  THAT
   38  APPLIED  TO  THE  TAXPAYER  UNDER SECTION 11-503 OF THIS CHAPTER FOR THE
   39  TAXABLE YEAR.
   40    (III) THE ADJUSTMENT REQUIRED IN THIS SUBDIVISION SHALL NOT  APPLY  IF
   41  THE  TAXPAYER  ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE
   42  AND IN THE FORM SPECIFIED BY THE COMMISSIONER OF FINANCE, THAT: (I)  THE
   43  ROYALTY PAYMENT WAS PAID, ACCRUED OR INCURRED TO A RELATED MEMBER ORGAN-
   44  IZED  UNDER THE LAWS OF A COUNTRY OTHER THAN THE UNITED STATES; (II) THE
   45  RELATED MEMBER'S INCOME FROM THE TRANSACTION WAS SUBJECT TO A COMPREHEN-
   46  SIVE INCOME TAX TREATY BETWEEN SUCH COUNTRY AND THE UNITED STATES; (III)
   47  THE RELATED MEMBER WAS SUBJECT TO TAX IN A FOREIGN NATION ON A TAX  BASE
   48  THAT  INCLUDED  THE  ROYALTY  PAYMENT  PAID,  ACCRUED OR INCURRED BY THE
   49  TAXPAYER; (IV) THE RELATED MEMBER'S  INCOME  FROM  THE  TRANSACTION  WAS
   50  TAXED IN SUCH COUNTRY AT AN EFFECTIVE RATE OF TAX AT LEAST EQUAL TO THAT
   51  IMPOSED  BY  THIS CITY; AND (V) THE ROYALTY PAYMENT WAS PAID, ACCRUED OR
   52  INCURRED PURSUANT TO A TRANSACTION THAT WAS UNDERTAKEN FOR A VALID BUSI-
   53  NESS PURPOSE AND USING TERMS THAT REFLECT AN ARM'S LENGTH RELATIONSHIP.
   54    (IV) THE ADJUSTMENT REQUIRED IN THIS SUBDIVISION SHALL  NOT  APPLY  IF
   55  THE  TAXPAYER  AND  THE  COMMISSIONER OF FINANCE AGREE IN WRITING TO THE
   56  APPLICATION OR USE  OF  ALTERNATIVE  ADJUSTMENTS  OR  COMPUTATIONS.  THE
       S. 2609                            33                            A. 3009
    1  COMMISSIONER  OF  FINANCE  MAY,  IN  HIS OR HER DISCRETION, AGREE TO THE
    2  APPLICATION OR USE OF ALTERNATIVE ADJUSTMENTS OR COMPUTATIONS WHEN HE OR
    3  SHE CONCLUDES THAT IN THE ABSENCE OF SUCH AGREEMENT THE  INCOME  OF  THE
    4  TAXPAYER WOULD NOT BE PROPERLY REFLECTED.
    5    S 10. Paragraph (n) of subdivision 8 of section 11-602 of the adminis-
    6  trative code of the city of New York, as amended by section 19 of part M
    7  of chapter 686 of the laws of 2003, is amended to read as follows:
    8    (n)  Related  members  expense  add back [and income exclusion].   (1)
    9  Definitions. (A) Related member [or members. For purposes of this  para-
   10  graph,  the  term related member or members means a person, corporation,
   11  or other entity, including an entity that is treated as a partnership or
   12  other pass-through vehicle for purposes  of  federal  taxation,  whether
   13  such  person, corporation or entity is a taxpayer or not, where one such
   14  person, corporation, or entity, or set of related persons,  corporations
   15  or  entities,  directly  or  indirectly  owns  or controls a controlling
   16  interest in another entity. Such entity  or  entities  may  include  all
   17  taxpayers  under this title]. "RELATED MEMBER" MEANS A RELATED PERSON AS
   18  DEFINED IN SUBPARAGRAPH (C) OF PARAGRAPH  THREE  OF  SUBSECTION  (B)  OF
   19  SECTION  FOUR  HUNDRED  SIXTY-FIVE  OF THE INTERNAL REVENUE CODE, EXCEPT
   20  THAT "FIFTY PERCENT" SHALL BE SUBSTITUTED FOR "TEN PERCENT".
   21    (B) [Controlling interest. A controlling interest shall  mean  (i)  in
   22  the  case  of  a corporation, either thirty percent or more of the total
   23  combined voting power of all classes of stock of  such  corporation,  or
   24  thirty percent or more of the capital, profits or beneficial interest in
   25  such  voting  stock of such corporation, and (ii) in the case of a part-
   26  nership, association, trust or other entity, thirty percent or  more  of
   27  the capital, profits or beneficial interest in such partnership, associ-
   28  ation, trust or other entity.] EFFECTIVE RATE OF TAX. "EFFECTIVE RATE OF
   29  TAX" MEANS, AS TO ANY CITY, THE MAXIMUM STATUTORY RATE OF TAX IMPOSED BY
   30  THE  CITY  ON OR MEASURED BY A RELATED MEMBER'S NET INCOME MULTIPLIED BY
   31  THE APPORTIONMENT PERCENTAGE, IF ANY, APPLICABLE TO THE  RELATED  MEMBER
   32  UNDER  THE  LAWS  OF SAID JURISDICTION. FOR PURPOSES OF THIS DEFINITION,
   33  THE EFFECTIVE RATE OF TAX AS TO ANY  CITY  IS  ZERO  WHERE  THE  RELATED
   34  MEMBER'S NET INCOME TAX LIABILITY IN SAID CITY IS REPORTED ON A COMBINED
   35  OR  CONSOLIDATED  RETURN  INCLUDING  BOTH  THE  TAXPAYER AND THE RELATED
   36  MEMBER WHERE THE REPORTED TRANSACTIONS  BETWEEN  THE  TAXPAYER  AND  THE
   37  RELATED  MEMBER  ARE  ELIMINATED  OR  OFFSET. ALSO, FOR PURPOSES OF THIS
   38  DEFINITION, WHEN COMPUTING THE EFFECTIVE RATE OF TAX FOR A CITY IN WHICH
   39  A RELATED MEMBER'S NET INCOME IS ELIMINATED OR OFFSET  BY  A  CREDIT  OR
   40  SIMILAR  ADJUSTMENT  THAT  IS  DEPENDENT  UPON THE RELATED MEMBER EITHER
   41  MAINTAINING OR  MANAGING  INTANGIBLE  PROPERTY  OR  COLLECTING  INTEREST
   42  INCOME  IN  THAT CITY, THE MAXIMUM STATUTORY RATE OF TAX IMPOSED BY SAID
   43  CITY SHALL BE DECREASED TO  REFLECT  THE  STATUTORY  RATE  OF  TAX  THAT
   44  APPLIES  TO  THE RELATED MEMBER AS EFFECTIVELY REDUCED BY SUCH CREDIT OR
   45  SIMILAR ADJUSTMENT.
   46    (C) Royalty payments. Royalty payments are payments directly connected
   47  to the acquisition, use, maintenance  or  management,  ownership,  sale,
   48  exchange,  or any other disposition of licenses, trademarks, copyrights,
   49  trade names, trade dress, service  marks,  mask  works,  trade  secrets,
   50  patents  and  any other similar types of intangible assets as determined
   51  by the commissioner of finance, and [includes] INCLUDE amounts allowable
   52  as interest deductions under section  one  hundred  sixty-three  of  the
   53  internal  revenue  code to the extent such amounts are directly or indi-
   54  rectly for, related to or in connection with the acquisition, use, main-
   55  tenance or management, ownership, sale, exchange or disposition of  such
   56  intangible assets.
       S. 2609                            34                            A. 3009
    1    (D)  Valid  business  purpose. A valid business purpose is one or more
    2  business purposes, other than the avoidance or  reduction  of  taxation,
    3  which alone or in combination constitute the primary motivation for some
    4  business  activity or transaction, which activity or transaction changes
    5  in  a  meaningful  way, apart from tax effects, the economic position of
    6  the taxpayer. The economic position of the taxpayer includes an increase
    7  in the market share of the taxpayer, or the entry by the  taxpayer  into
    8  new business markets.
    9    (2) Royalty expense add backs. (A) For the purpose of computing entire
   10  net  income  or other applicable taxable basis, a taxpayer must add back
   11  royalty payments  [to  a]  DIRECTLY  OR  INDIRECTLY  PAID,  ACCRUED,  OR
   12  INCURRED  IN CONNECTION WITH ONE OR MORE DIRECT OR INDIRECT TRANSACTIONS
   13  WITH ONE OR MORE related [member] MEMBERS during the taxable year to the
   14  extent deductible in calculating federal taxable income.
   15    (B) [The add back of royalty payments shall not be required if and  to
   16  the extent that such payments meet either of the following conditions:
   17    (i)  the related member during the same taxable year directly or indi-
   18  rectly paid or incurred the amount to a person or entity that is  not  a
   19  related  member,  and  such  transaction  was  done for a valid business
   20  purpose and the payments are made at arm's length;
   21    (ii) the royalty payments are paid or incurred  to  a  related  member
   22  organized  under the laws of a country other than the United States, are
   23  subject to a comprehensive income tax treaty between  such  country  and
   24  the  United States, and are taxed in such country at a tax rate at least
   25  equal to that imposed by this state.
   26    (3) Royalty income exclusions. For the purpose of computing entire net
   27  income or other taxable basis, a taxpayer shall  be  allowed  to  deduct
   28  royalty  payments  directly or indirectly received from a related member
   29  during the taxable year to the extent included in the taxpayer's federal
   30  taxable income unless such royalty payments would not be required to  be
   31  added  back  under  subparagraph  two of this paragraph or other similar
   32  provision in this chapter.] EXCEPTIONS. (I) THE ADJUSTMENT  REQUIRED  IN
   33  THIS  PARAGRAPH  SHALL  NOT  APPLY TO THE PORTION OF THE ROYALTY PAYMENT
   34  THAT THE TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE  OF  THE
   35  TYPE AND IN THE FORM SPECIFIED BY THE COMMISSIONER OF FINANCE, MEETS ALL
   36  OF THE FOLLOWING REQUIREMENTS: (I) THE RELATED MEMBER WAS SUBJECT TO TAX
   37  IN  THIS  CITY  OR  ANOTHER  CITY  WITHIN THE UNITED STATES OR A FOREIGN
   38  NATION OR SOME COMBINATION THEREOF ON  A  TAX  BASE  THAT  INCLUDED  THE
   39  ROYALTY  PAYMENT  PAID,  ACCRUED  OR  INCURRED BY THE TAXPAYER; (II) THE
   40  RELATED MEMBER DURING THE SAME TAXABLE YEAR DIRECTLY OR INDIRECTLY PAID,
   41  ACCRUED OR INCURRED SUCH PORTION TO A  PERSON  THAT  IS  NOT  A  RELATED
   42  MEMBER;  AND  (III)  THE  TRANSACTION GIVING RISE TO THE ROYALTY PAYMENT
   43  BETWEEN THE TAXPAYER AND THE RELATED MEMBER WAS UNDERTAKEN FOR  A  VALID
   44  BUSINESS PURPOSE.
   45    (II)  THE ADJUSTMENT REQUIRED IN THIS PARAGRAPH SHALL NOT APPLY IF THE
   46  TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE  TYPE  AND
   47  IN  THE  FORM  SPECIFIED  BY  THE COMMISSIONER OF FINANCE, THAT: (I) THE
   48  RELATED MEMBER WAS SUBJECT TO TAX ON OR MEASURED BY ITS  NET  INCOME  IN
   49  THIS  CITY OR ANOTHER CITY WITHIN THE UNITED STATES, OR SOME COMBINATION
   50  THEREOF; (II) THE TAX BASE FOR SAID TAX  INCLUDED  THE  ROYALTY  PAYMENT
   51  PAID,  ACCRUED  OR  INCURRED  BY  THE  TAXPAYER; AND (III) THE AGGREGATE
   52  EFFECTIVE RATE OF TAX APPLIED TO THE RELATED MEMBER IN  THOSE  JURISDIC-
   53  TIONS  IS  NO LESS THAN EIGHTY PERCENT OF THE STATUTORY RATE OF TAX THAT
   54  APPLIED TO THE TAXPAYER UNDER SECTION 11-604 OF THIS SUBCHAPTER FOR  THE
   55  TAXABLE YEAR.
       S. 2609                            35                            A. 3009
    1    (III) THE ADJUSTMENT REQUIRED IN THIS PARAGRAPH SHALL NOT APPLY IF THE
    2  TAXPAYER  ESTABLISHES,  BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE AND
    3  IN THE FORM SPECIFIED BY THE COMMISSIONER  OF  FINANCE,  THAT:  (I)  THE
    4  ROYALTY PAYMENT WAS PAID, ACCRUED OR INCURRED TO A RELATED MEMBER ORGAN-
    5  IZED  UNDER THE LAWS OF A COUNTRY OTHER THAN THE UNITED STATES; (II) THE
    6  RELATED MEMBER'S INCOME FROM THE TRANSACTION WAS SUBJECT TO A COMPREHEN-
    7  SIVE INCOME TAX TREATY BETWEEN SUCH COUNTRY AND THE UNITED STATES; (III)
    8  THE RELATED MEMBER WAS SUBJECT TO TAX IN A FOREIGN NATION ON A TAX  BASE
    9  THAT  INCLUDED  THE  ROYALTY  PAYMENT  PAID,  ACCRUED OR INCURRED BY THE
   10  TAXPAYER; (IV) THE RELATED MEMBER'S  INCOME  FROM  THE  TRANSACTION  WAS
   11  TAXED IN SUCH COUNTRY AT AN EFFECTIVE RATE OF TAX AT LEAST EQUAL TO THAT
   12  IMPOSED  BY  THIS CITY; AND (V) THE ROYALTY PAYMENT WAS PAID, ACCRUED OR
   13  INCURRED PURSUANT TO A TRANSACTION THAT WAS UNDERTAKEN FOR A VALID BUSI-
   14  NESS PURPOSE AND USING TERMS THAT REFLECT AN ARM'S LENGTH RELATIONSHIP.
   15    (IV) THE ADJUSTMENT REQUIRED IN THIS PARAGRAPH SHALL NOT APPLY IF  THE
   16  TAXPAYER  AND THE COMMISSIONER OF FINANCE AGREE IN WRITING TO THE APPLI-
   17  CATION OR USE OF ALTERNATIVE ADJUSTMENTS OR  COMPUTATIONS.  THE  COMMIS-
   18  SIONER  OF  FINANCE MAY, IN HIS OR HER DISCRETION, AGREE TO THE APPLICA-
   19  TION OR USE OF ALTERNATIVE ADJUSTMENTS OR COMPUTATIONS WHEN  HE  OR  SHE
   20  CONCLUDES  THAT  IN  THE  ABSENCE  OF  SUCH  AGREEMENT THE INCOME OF THE
   21  TAXPAYER WOULD NOT BE PROPERLY REFLECTED.
   22    S 11. Subdivision (q) of section 11-641 of the administrative code  of
   23  the city of New York, as added by section 21 of part M of chapter 686 of
   24  the laws of 2003, is amended to read as follows:
   25    (q)  Related  members  expense  add back [and income exclusion].   (1)
   26  Definitions. (A) Related member [or members. For purposes of this subdi-
   27  vision, the term related member or members means a person,  corporation,
   28  or other entity, including an entity that is treated as a partnership or
   29  other  pass-through  vehicle  for  purposes of federal taxation, whether
   30  such person, corporation or entity is a taxpayer or not, where one  such
   31  person,  corporation, or entity, or set of related persons, corporations
   32  or entities, directly or  indirectly  owns  or  controls  a  controlling
   33  interest  in  another  entity.  Such  entity or entities may include all
   34  taxpayers under this title].  "RELATED MEMBER" MEANS A RELATED PERSON AS
   35  DEFINED IN SUBPARAGRAPH (C) OF PARAGRAPH  THREE  OF  SUBSECTION  (B)  OF
   36  SECTION  FOUR  HUNDRED  SIXTY-FIVE  OF THE INTERNAL REVENUE CODE, EXCEPT
   37  THAT "FIFTY PERCENT" SHALL BE SUBSTITUTED FOR "TEN PERCENT".
   38    (B) [Controlling interest. A controlling interest shall  mean  (i)  in
   39  the  case  of  a corporation, either thirty percent or more of the total
   40  combined voting power of all classes of stock of  such  corporation,  or
   41  thirty percent or more of the capital, profits or beneficial interest in
   42  such  voting  stock of such corporation, and (ii) in the case of a part-
   43  nership, association, trust or other entity, thirty percent or  more  of
   44  the capital, profits or beneficial interest in such partnership, associ-
   45  ation,  trust  or other entity.] EFFECTIVE RATE OF TAX.  "EFFECTIVE RATE
   46  OF TAX" MEANS, AS TO ANY CITY, THE MAXIMUM STATUTORY RATE OF TAX IMPOSED
   47  BY THE CITY ON OR MEASURED BY A RELATED MEMBER'S NET  INCOME  MULTIPLIED
   48  BY  THE  APPORTIONMENT  PERCENTAGE,  IF  ANY,  APPLICABLE TO THE RELATED
   49  MEMBER UNDER THE LAWS OF SAID JURISDICTION. FOR PURPOSES OF  THIS  DEFI-
   50  NITION,  THE  EFFECTIVE  RATE  OF  TAX  AS TO ANY CITY IS ZERO WHERE THE
   51  RELATED MEMBER'S NET INCOME TAX LIABILITY IN SAID CITY IS REPORTED ON  A
   52  COMBINED  OR  CONSOLIDATED  RETURN  INCLUDING  BOTH THE TAXPAYER AND THE
   53  RELATED MEMBER WHERE THE REPORTED TRANSACTIONS BETWEEN THE TAXPAYER  AND
   54  THE  RELATED MEMBER ARE ELIMINATED OR OFFSET. ALSO, FOR PURPOSES OF THIS
   55  DEFINITION, WHEN COMPUTING THE EFFECTIVE RATE OF TAX FOR A CITY IN WHICH
   56  A RELATED MEMBER'S NET INCOME IS ELIMINATED OR OFFSET  BY  A  CREDIT  OR
       S. 2609                            36                            A. 3009
    1  SIMILAR  ADJUSTMENT  THAT  IS  DEPENDENT  UPON THE RELATED MEMBER EITHER
    2  MAINTAINING OR  MANAGING  INTANGIBLE  PROPERTY  OR  COLLECTING  INTEREST
    3  INCOME  IN  THAT CITY, THE MAXIMUM STATUTORY RATE OF TAX IMPOSED BY SAID
    4  CITY  SHALL  BE  DECREASED  TO  REFLECT  THE  STATUTORY RATE OF TAX THAT
    5  APPLIES TO THE RELATED MEMBER AS EFFECTIVELY REDUCED BY SUCH  CREDIT  OR
    6  SIMILAR ADJUSTMENT.
    7    (C) Royalty payments. Royalty payments are payments directly connected
    8  to  the  acquisition,  use,  maintenance or management, ownership, sale,
    9  exchange, or any other disposition of licenses, trademarks,  copyrights,
   10  trade  names,  trade  dress,  service  marks, mask works, trade secrets,
   11  patents and any other similar types of intangible assets  as  determined
   12  by the commissioner of finance, and [includes] INCLUDE amounts allowable
   13  as  interest  deductions  under  section  one hundred sixty-three of the
   14  internal revenue code to the extent such amounts are directly  or  indi-
   15  rectly for, related to or in connection with the acquisition, use, main-
   16  tenance  or management, ownership, sale, exchange or disposition of such
   17  intangible assets.
   18    (D) Valid business purpose. A valid business purpose is  one  or  more
   19  business  purposes,  other  than the avoidance or reduction of taxation,
   20  which alone or in combination constitute the primary motivation for some
   21  business activity or transaction, which activity or transaction  changes
   22  in  a  meaningful  way, apart from tax effects, the economic position of
   23  the taxpayer. The economic position of the taxpayer includes an increase
   24  in the market share of the taxpayer, or the entry by the  taxpayer  into
   25  new business markets.
   26    (2) Royalty expense add backs. (A) For the purpose of computing entire
   27  net income, a taxpayer must add back royalty payments [to a] DIRECTLY OR
   28  INDIRECTLY  PAID,  ACCRUED,  OR  INCURRED IN CONNECTION WITH ONE OR MORE
   29  DIRECT OR INDIRECT  TRANSACTIONS  WITH  ONE  OR  MORE  related  [member]
   30  MEMBERS  during the taxable year to the extent deductible in calculating
   31  federal taxable income.
   32    (B) [The add back of royalty payments shall not be required if and  to
   33  the extent that such payments meet either of the following conditions:
   34    (i)  the related member during the same taxable year directly or indi-
   35  rectly paid or incurred the amount to a person or entity that is  not  a
   36  related  member,  and such transaction was done for a valid business and
   37  the payments are made at arm's length;
   38    (ii) the royalty payments are paid or incurred  to  a  related  member
   39  organized  under the laws of a country other than the United States, are
   40  subject to a comprehensive income tax treaty between  such  country  and
   41  the  United States, and are taxed in such country at a tax rate at least
   42  equal to that imposed by this state.
   43    (3) Royalty income exclusions. For the purpose of computing entire net
   44  income, a taxpayer shall be allowed to deduct royalty payments  directly
   45  or  indirectly received from a related member during the taxable year to
   46  the extent included in the taxpayer's federal taxable income unless such
   47  royalty payments would not be required to be added back under  paragraph
   48  two  of  this  subdivision  or other similar provision in this chapter.]
   49  EXCEPTIONS. (I) THE ADJUSTMENT REQUIRED IN THIS  SUBDIVISION  SHALL  NOT
   50  APPLY  TO  THE  PORTION  OF THE ROYALTY PAYMENT THAT THE TAXPAYER ESTAB-
   51  LISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE  AND  IN  THE  FORM
   52  SPECIFIED  BY  THE  COMMISSIONER  OF FINANCE, MEETS ALL OF THE FOLLOWING
   53  REQUIREMENTS: (I) THE RELATED MEMBER WAS SUBJECT TO TAX IN THIS CITY  OR
   54  ANOTHER CITY WITHIN THE UNITED STATES OR A FOREIGN NATION OR SOME COMBI-
   55  NATION  THEREOF  ON  A  TAX BASE THAT INCLUDED THE ROYALTY PAYMENT PAID,
   56  ACCRUED OR INCURRED BY THE TAXPAYER; (II) THE RELATED MEMBER DURING  THE
       S. 2609                            37                            A. 3009
    1  SAME  TAXABLE YEAR DIRECTLY OR INDIRECTLY PAID, ACCRUED OR INCURRED SUCH
    2  PORTION TO A PERSON THAT IS NOT A RELATED MEMBER; AND (III)  THE  TRANS-
    3  ACTION  GIVING  RISE TO THE ROYALTY PAYMENT BETWEEN THE TAXPAYER AND THE
    4  RELATED MEMBER WAS UNDERTAKEN FOR A VALID BUSINESS PURPOSE.
    5    (II)  THE  ADJUSTMENT  REQUIRED IN THIS SUBDIVISION SHALL NOT APPLY IF
    6  THE TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF  THE  TYPE
    7  AND  IN THE FORM SPECIFIED BY THE COMMISSIONER OF FINANCE, THAT: (I) THE
    8  RELATED MEMBER WAS SUBJECT TO TAX ON OR MEASURED BY ITS  NET  INCOME  IN
    9  THIS  CITY OR ANOTHER CITY WITHIN THE UNITED STATES, OR SOME COMBINATION
   10  THEREOF; (II) THE TAX BASE FOR SAID TAX  INCLUDED  THE  ROYALTY  PAYMENT
   11  PAID,  ACCRUED  OR  INCURRED  BY  THE  TAXPAYER; AND (III) THE AGGREGATE
   12  EFFECTIVE RATE OF TAX APPLIED TO THE RELATED MEMBER IN  THOSE  JURISDIC-
   13  TIONS  IS  NO LESS THAN EIGHTY PERCENT OF THE STATUTORY RATE OF TAX THAT
   14  APPLIED TO THE TAXPAYER UNDER SECTION 11-643.5  OF  THIS  PART  FOR  THE
   15  TAXABLE YEAR.
   16    (III)  THE  ADJUSTMENT REQUIRED IN THIS SUBDIVISION SHALL NOT APPLY IF
   17  THE TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF  THE  TYPE
   18  AND  IN THE FORM SPECIFIED BY THE COMMISSIONER OF FINANCE, THAT: (I) THE
   19  ROYALTY PAYMENT WAS PAID, ACCRUED OR INCURRED TO A RELATED MEMBER ORGAN-
   20  IZED UNDER THE LAWS OF A COUNTRY OTHER THAN THE UNITED STATES; (II)  THE
   21  RELATED MEMBER'S INCOME FROM THE TRANSACTION WAS SUBJECT TO A COMPREHEN-
   22  SIVE INCOME TAX TREATY BETWEEN SUCH COUNTRY AND THE UNITED STATES; (III)
   23  THE  RELATED MEMBER WAS SUBJECT TO TAX IN A FOREIGN NATION ON A TAX BASE
   24  THAT INCLUDED THE ROYALTY PAYMENT  PAID,  ACCRUED  OR  INCURRED  BY  THE
   25  TAXPAYER;  (IV)  THE  RELATED  MEMBER'S  INCOME FROM THE TRANSACTION WAS
   26  TAXED IN SUCH COUNTRY AT AN EFFECTIVE RATE OF TAX AT LEAST EQUAL TO THAT
   27  IMPOSED BY THIS CITY; AND (V) THE ROYALTY PAYMENT WAS PAID,  ACCRUED  OR
   28  INCURRED PURSUANT TO A TRANSACTION THAT WAS UNDERTAKEN FOR A VALID BUSI-
   29  NESS PURPOSE AND USING TERMS THAT REFLECT AN ARM'S LENGTH RELATIONSHIP.
   30    (IV)  THE  ADJUSTMENT  REQUIRED IN THIS SUBDIVISION SHALL NOT APPLY IF
   31  THE TAXPAYER AND THE COMMISSIONER OF FINANCE AGREE  IN  WRITING  TO  THE
   32  APPLICATION  OR  USE  OF  ALTERNATIVE  ADJUSTMENTS  OR COMPUTATIONS. THE
   33  COMMISSIONER OF FINANCE MAY, IN HIS OR  HER  DISCRETION,  AGREE  TO  THE
   34  APPLICATION OR USE OF ALTERNATIVE ADJUSTMENTS OR COMPUTATIONS WHEN HE OR
   35  SHE  CONCLUDES  THAT  IN THE ABSENCE OF SUCH AGREEMENT THE INCOME OF THE
   36  TAXPAYER WOULD NOT BE PROPERLY REFLECTED.
   37    S 12. Subdivision (t) of section 11-1712 of the administrative code of
   38  the city of New York, as added by section 26 of part M of chapter 686 of
   39  the laws of 2003, is amended to read as follows:
   40    (t) Related members expense add back  [and  income  exclusion].    (1)
   41  Definitions. (A) Related member [or members. For purposes of this subdi-
   42  vision,  the term related member or members means a person, corporation,
   43  or other entity, including an entity that is treated as a partnership or
   44  other pass-through vehicle for purposes  of  federal  taxation,  whether
   45  such  person, corporation or entity is a taxpayer or not, where one such
   46  person, corporation or entity, or set of related  persons,  corporations
   47  or  entities,  directly  or  indirectly  owns  or controls a controlling
   48  interest in another entity. Such entity  or  entities  may  include  all
   49  taxpayers under this title].  "RELATED MEMBER" MEANS A RELATED PERSON AS
   50  DEFINED  IN  SUBPARAGRAPH  (C)  OF  PARAGRAPH THREE OF SUBSECTION (B) OF
   51  SECTION FOUR HUNDRED SIXTY-FIVE OF THE  INTERNAL  REVENUE  CODE,  EXCEPT
   52  THAT "FIFTY PERCENT" SHALL BE SUBSTITUTED FOR "TEN PERCENT".
   53    (B)  [Controlling  interest.  A controlling interest shall mean (i) in
   54  the case of a corporation, either thirty percent or more  of  the  total
   55  combined  voting  power  of all classes of stock of such corporation, or
   56  thirty percent or more of the capital, profits or beneficial interest in
       S. 2609                            38                            A. 3009
    1  such voting stock of such corporation, and (ii) in the case of  a  part-
    2  nership,  association,  trust or other entity, thirty percent or more of
    3  the capital, profits or beneficial interest in such partnership, associ-
    4  ation, trust or other entity.] EFFECTIVE RATE OF TAX. "EFFECTIVE RATE OF
    5  TAX" MEANS, AS TO ANY CITY, THE MAXIMUM STATUTORY RATE OF TAX IMPOSED BY
    6  THE  CITY  ON OR MEASURED BY A RELATED MEMBER'S NET INCOME MULTIPLIED BY
    7  THE APPORTIONMENT PERCENTAGE, IF ANY, APPLICABLE TO THE  RELATED  MEMBER
    8  UNDER  THE  LAWS  OF SAID JURISDICTION. FOR PURPOSES OF THIS DEFINITION,
    9  THE EFFECTIVE RATE OF TAX AS TO ANY  CITY  IS  ZERO  WHERE  THE  RELATED
   10  MEMBER'S NET INCOME TAX LIABILITY IN SAID CITY IS REPORTED ON A COMBINED
   11  OR  CONSOLIDATED  RETURN  INCLUDING  BOTH  THE  TAXPAYER AND THE RELATED
   12  MEMBER WHERE THE REPORTED TRANSACTIONS  BETWEEN  THE  TAXPAYER  AND  THE
   13  RELATED  MEMBER  ARE  ELIMINATED  OR  OFFSET. ALSO, FOR PURPOSES OF THIS
   14  DEFINITION, WHEN COMPUTING THE EFFECTIVE RATE OF TAX FOR A CITY IN WHICH
   15  A RELATED MEMBER'S NET INCOME IS ELIMINATED OR OFFSET  BY  A  CREDIT  OR
   16  SIMILAR  ADJUSTMENT  THAT  IS  DEPENDENT  UPON THE RELATED MEMBER EITHER
   17  MAINTAINING OR  MANAGING  INTANGIBLE  PROPERTY  OR  COLLECTING  INTEREST
   18  INCOME  IN  THAT CITY, THE MAXIMUM STATUTORY RATE OF TAX IMPOSED BY SAID
   19  CITY SHALL BE DECREASED TO  REFLECT  THE  STATUTORY  RATE  OF  TAX  THAT
   20  APPLIES  TO  THE RELATED MEMBER AS EFFECTIVELY REDUCED BY SUCH CREDIT OR
   21  SIMILAR ADJUSTMENT.
   22    (C) Royalty payments. Royalty payments are payments directly connected
   23  to the acquisition, use, maintenance  or  management,  ownership,  sale,
   24  exchange,  or any other disposition of licenses, trademarks, copyrights,
   25  trade names, trade dress, service  marks,  mask  works,  trade  secrets,
   26  patents  and  any other similar types of intangible assets as determined
   27  by the state  commissioner  of  taxation  and  finance,  and  [includes]
   28  INCLUDE  amounts  allowable  as  interest  deductions  under section one
   29  hundred sixty-three of the internal revenue  code  to  the  extent  such
   30  amounts are directly or indirectly for, related to or in connection with
   31  the  acquisition,  use,  maintenance  or  management,  ownership,  sale,
   32  exchange or disposition of such intangible assets.
   33    (D) Valid business purpose. A valid business purpose is  one  or  more
   34  business  purposes,  other  than the avoidance or reduction of taxation,
   35  which alone or in combination constitute the primary motivation for some
   36  business activity or transaction, which activity or transaction  changes
   37  in  a  meaningful  way, apart from tax effects, the economic position of
   38  the taxpayer. The economic position of the taxpayer includes an increase
   39  in the market share of the taxpayer, or the entry by the  taxpayer  into
   40  new business markets.
   41    (2)  Royalty  expense add backs. (A) For the purpose of computing city
   42  adjusted gross income, a taxpayer must add back royalty payments [to  a]
   43  DIRECTLY OR INDIRECTLY PAID, ACCRUED, OR INCURRED IN CONNECTION WITH ONE
   44  OR  MORE  DIRECT  OR  INDIRECT  TRANSACTIONS  WITH  ONE  OR MORE related
   45  [member] MEMBERS during the taxable year to  the  extent  deductible  in
   46  calculating federal taxable income.
   47    (B)  [The add back of royalty payments shall not be required if and to
   48  the extent that such payments meet either of the following conditions:
   49    (i) the related member during the same taxable year directly or  indi-
   50  rectly  paid  or incurred the amount to a person or entity that is not a
   51  related member, and such transaction was done for a valid  business  and
   52  the payments are made at arm's length;
   53    (ii)  the  royalty  payments  are paid or incurred to a related member
   54  organized under the laws of a country other than the United States,  are
   55  subject  to  a  comprehensive income tax treaty between such country and
       S. 2609                            39                            A. 3009
    1  the United States, and are taxed in such country at a tax rate at  least
    2  equal to that imposed by this state.
    3    (3)  Royalty  income exclusions. (A) For the purpose of computing city
    4  adjusted gross income, a taxpayer shall be  allowed  to  deduct  royalty
    5  payments  directly  or  indirectly received from a related member during
    6  the taxable year to the extent included in the taxpayer's federal  taxa-
    7  ble  income  unless  such  royalty  payments would not be required to be
    8  added back under paragraph two of  this  subdivision  or  other  similar
    9  provision  in  this title.] EXCEPTIONS.   (I) THE ADJUSTMENT REQUIRED IN
   10  THIS SUBDIVISION SHALL NOT APPLY TO THE PORTION OF THE  ROYALTY  PAYMENT
   11  THAT  THE  TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE
   12  TYPE AND IN THE FORM SPECIFIED BY THE COMMISSIONER OF FINANCE, MEETS ALL
   13  OF THE FOLLOWING REQUIREMENTS: (I) THE RELATED MEMBER WAS SUBJECT TO TAX
   14  IN THIS CITY OR ANOTHER CITY WITHIN  THE  UNITED  STATES  OR  A  FOREIGN
   15  NATION  OR  SOME  COMBINATION  THEREOF  ON  A TAX BASE THAT INCLUDED THE
   16  ROYALTY PAYMENT PAID, ACCRUED OR INCURRED  BY  THE  TAXPAYER;  (II)  THE
   17  RELATED MEMBER DURING THE SAME TAXABLE YEAR DIRECTLY OR INDIRECTLY PAID,
   18  ACCRUED  OR  INCURRED  SUCH  PORTION  TO  A PERSON THAT IS NOT A RELATED
   19  MEMBER; AND (III) THE TRANSACTION GIVING RISE  TO  THE  ROYALTY  PAYMENT
   20  BETWEEN  THE  TAXPAYER AND THE RELATED MEMBER WAS UNDERTAKEN FOR A VALID
   21  BUSINESS PURPOSE.
   22    (II) THE ADJUSTMENT REQUIRED IN THIS SUBDIVISION SHALL  NOT  APPLY  IF
   23  THE  TAXPAYER  ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE
   24  AND IN THE FORM SPECIFIED BY THE COMMISSIONER OF FINANCE, THAT: (I)  THE
   25  RELATED  MEMBER  WAS  SUBJECT TO TAX ON OR MEASURED BY ITS NET INCOME IN
   26  THIS CITY OR ANOTHER CITY WITHIN THE UNITED STATES, OR SOME  COMBINATION
   27  THEREOF;  (II)  THE  TAX BASE FOR SAID TAX  INCLUDED THE ROYALTY PAYMENT
   28  PAID, ACCRUED OR INCURRED BY  THE  TAXPAYER;  AND  (III)  THE  AGGREGATE
   29  EFFECTIVE  RATE  OF TAX APPLIED TO THE RELATED MEMBER IN THOSE JURISDIC-
   30  TIONS IS NO LESS THAN EIGHTY PERCENT OF THE STATUTORY RATE OF  TAX  THAT
   31  APPLIED  TO  THE  TAXPAYER UNDER SECTION 11-1701 OF THIS CHAPTER FOR THE
   32  TAXABLE YEAR.
   33    (III) THE ADJUSTMENT REQUIRED IN THIS SUBDIVISION SHALL NOT  APPLY  IF
   34  THE  TAXPAYER  ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE
   35  AND IN THE FORM SPECIFIED BY THE COMMISSIONER OF FINANCE, THAT: (I)  THE
   36  ROYALTY PAYMENT WAS PAID, ACCRUED OR INCURRED TO A RELATED MEMBER ORGAN-
   37  IZED  UNDER THE LAWS OF A COUNTRY OTHER THAN THE UNITED STATES; (II) THE
   38  RELATED MEMBER'S INCOME FROM THE TRANSACTION WAS SUBJECT TO A COMPREHEN-
   39  SIVE INCOME TAX TREATY BETWEEN SUCH COUNTRY AND THE UNITED STATES; (III)
   40  THE RELATED MEMBER WAS SUBJECT TO TAX IN A FOREIGN NATION ON A TAX  BASE
   41  THAT  INCLUDED  THE  ROYALTY  PAYMENT  PAID,  ACCRUED OR INCURRED BY THE
   42  TAXPAYER; (IV) THE RELATED MEMBER'S  INCOME  FROM  THE  TRANSACTION  WAS
   43  TAXED IN SUCH COUNTRY AT AN EFFECTIVE RATE OF TAX AT LEAST EQUAL TO THAT
   44  IMPOSED  BY  THIS CITY; AND (V) THE ROYALTY PAYMENT WAS PAID, ACCRUED OR
   45  INCURRED PURSUANT TO A TRANSACTION THAT WAS UNDERTAKEN FOR A VALID BUSI-
   46  NESS PURPOSE AND USING TERMS THAT REFLECT AN ARM'S LENGTH RELATIONSHIP.
   47    (IV) THE ADJUSTMENT REQUIRED IN THIS SUBDIVISION SHALL  NOT  APPLY  IF
   48  THE  TAXPAYER  AND  THE  COMMISSIONER OF FINANCE AGREE IN WRITING TO THE
   49  APPLICATION OR USE  OF  ALTERNATIVE  ADJUSTMENTS  OR  COMPUTATIONS.  THE
   50  COMMISSIONER  OF  FINANCE  MAY,  IN  HIS OR HER DISCRETION, AGREE TO THE
   51  APPLICATION OR USE OF ALTERNATIVE ADJUSTMENTS OR COMPUTATIONS WHEN HE OR
   52  SHE CONCLUDES THAT IN THE ABSENCE OF SUCH AGREEMENT THE  INCOME  OF  THE
   53  TAXPAYER WOULD NOT BE PROPERLY REFLECTED.
   54    S  13. This act shall take effect immediately and shall apply to taxa-
   55  ble years beginning on or after January 1, 2013.
       S. 2609                            40                            A. 3009
    1                                   PART F
    2    Section 1. Subparagraph (A) of paragraph 1,  and paragraphs 4 and 5 of
    3  subsection (oo) of section 606 of the tax law, subparagraph (A) of para-
    4  graph 1 as amended by chapter 472 of the laws of 2010 and paragraph 4 as
    5  amended and paragraph 5 as added by chapter 239 of the laws of 2009, are
    6  amended to read as follows:
    7    (A)  For  taxable years beginning on or after January first, two thou-
    8  sand ten and before January first,  two  thousand  [fifteen]  TWENTY,  a
    9  taxpayer  shall be allowed a credit as hereinafter provided, against the
   10  tax imposed by this article, in an amount equal to one  hundred  percent
   11  of the amount of credit allowed the taxpayer with respect to a certified
   12  historic structure under subsection (a) (2) of section 47 of the federal
   13  internal  revenue  code  with  respect to a certified historic structure
   14  located within the state. Provided, however, the credit shall not exceed
   15  five million dollars. For taxable years beginning on  or  after  January
   16  first,  two  thousand  [fifteen]  TWENTY,  a taxpayer shall be allowed a
   17  credit as hereinafter provided, against the tax imposed by this article,
   18  in an amount equal to thirty percent of the amount of credit allowed the
   19  taxpayer with respect to a certified historic structure under subsection
   20  (a)(2) of section 47 of the federal internal revenue code  with  respect
   21  to  a  certified  historic structure located within the state; provided,
   22  however, the credit shall not exceed one hundred thousand dollars.
   23    (4) If the amount of the credit [allowable under this  subsection  for
   24  any  taxable  year  shall  exceed  the taxpayer's tax for such year, the
   25  excess may be carried over to the following year or years,  and  may  be
   26  applied against the taxpayer's tax for such year or years] ALLOWED UNDER
   27  THIS SUBSECTION FOR ANY TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S TAX FOR
   28  SUCH  YEAR,  THE  EXCESS SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE
   29  CREDITED OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS  OF  SECTION  SIX
   30  HUNDRED  EIGHTY-SIX OF THIS ARTICLE, PROVIDED, HOWEVER, THAT NO INTEREST
   31  SHALL BE PAID THEREON.
   32    (5) To be eligible for the credit allowable under this subsection  the
   33  rehabilitation  project  shall  be  in whole or in part [a targeted area
   34  residence within the meaning of section 143(j) of the  internal  revenue
   35  code  or]  located within a census tract which is identified as being at
   36  or below one hundred percent of the state median family income  [in  the
   37  most  recent federal census] AS CALCULATED USING A FIVE YEAR SAMPLE FROM
   38  THE AMERICAN COMMUNITY SURVEY BEGINNING WITH THE YEAR TWO THOUSAND  SIX-
   39  -YEAR TWO THOUSAND ELEVEN SAMPLE.
   40    S 2. Subparagraph (A) of paragraph 1, and paragraphs 4 and 5 of subdi-
   41  vision 40 of section 210 of the tax law, subparagraph (A) of paragraph 1
   42  and  paragraph  4  as amended and paragraph 5 as added by chapter 472 of
   43  the laws of 2010, are amended to read as follows:
   44    (A) For taxable years beginning on or after January first,  two  thou-
   45  sand  ten  and  before  January  first, two thousand [fifteen] TWENTY, a
   46  taxpayer shall be allowed a credit as hereinafter provided, against  the
   47  tax  imposed  by this article, in an amount equal to one hundred percent
   48  of the amount of credit allowed the taxpayer with respect to a certified
   49  historic structure under subsection (a) (2) of section 47 of the federal
   50  internal revenue code with respect to  a  certified  historic  structure
   51  located within the state. Provided, however, the credit shall not exceed
   52  five  million  dollars.  For taxable years beginning on or after January
   53  first, two thousand [fifteen] TWENTY, a  taxpayer  shall  be  allowed  a
   54  credit as hereinafter provided, against the tax imposed by this article,
   55  in an amount equal to thirty percent of the amount of credit allowed the
       S. 2609                            41                            A. 3009
    1  taxpayer with respect to a certified historic structure under subsection
    2  (a)(2)  of  section 47 of the federal internal revenue code with respect
    3  to a certified historic structure located within  the  state.  Provided,
    4  however, the credit shall not exceed one hundred thousand dollars.
    5    (4)  The  credit  allowed  under this subdivision for any taxable year
    6  shall not reduce the tax due for such year to less than  the  higher  of
    7  the  amounts  prescribed in paragraphs (c) and (d) of subdivision one of
    8  this section. However, if the amount of the credit [allowable under this
    9  subdivision for any taxable year shall exceed  the  taxpayer's  tax  for
   10  such  year,  the  excess  may  be  carried over to the following year or
   11  years, and may be deducted from the taxpayer's  tax  for  such  year  or
   12  years]  ALLOWED  UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE
   13  TAX TO SUCH AMOUNT, ANY AMOUNT OF CREDIT THUS  NOT  DEDUCTIBLE  IN  SUCH
   14  TAXABLE YEAR SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR
   15  REFUNDED  IN  ACCORDANCE  WITH  THE  PROVISIONS  OF SECTION ONE THOUSAND
   16  EIGHTY-SIX OF THIS  CHAPTER.    PROVIDED,  HOWEVER,  THE  PROVISIONS  OF
   17  SUBSECTION  (C)  OF  SECTION  ONE  THOUSAND EIGHTY-EIGHT OF THIS CHAPTER
   18  NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
   19    (5) To be eligible for the credit allowable  under  this  subdivision,
   20  the rehabilitation project shall be in whole or in part [a targeted area
   21  residence  within  the meaning of section 143(j) of the internal revenue
   22  code or] located within a census tract which is identified as  being  at
   23  or  below  one hundred percent of the state median family income [in the
   24  most recent federal census] AS CALCULATED USING A FIVE YEAR SAMPLE  FROM
   25  THE  AMERICAN COMMUNITY SURVEY BEGINNING WITH THE YEAR TWO THOUSAND SIX-
   26  -YEAR TWO THOUSAND ELEVEN SAMPLE.
   27    S 3. Subparagraph (A) of paragraph  1,  and  paragraphs  4  and  5  of
   28  subsection  (u)  of section 1456 of the tax law, as added by chapter 472
   29  of the laws of 2010, are amended to read as follows:
   30    (A) For taxable years beginning on or after January first,  two  thou-
   31  sand  ten  and  before  January  first, two thousand [fifteen] TWENTY, a
   32  taxpayer shall be allowed a credit as hereinafter provided, against  the
   33  tax  imposed  by this article, in an amount equal to one hundred percent
   34  of the amount of credit allowed the taxpayer with respect to a certified
   35  historic structure under subsection (a)(2) of section 47 of the  federal
   36  internal  revenue  code  with  respect to a certified historic structure
   37  located within the state. Provided, however, the credit shall not exceed
   38  five million dollars. For taxable years beginning on  or  after  January
   39  first,  two  thousand  [fifteen]  TWENTY,  a taxpayer shall be allowed a
   40  credit as hereinafter provided, against the tax imposed by this article,
   41  in an amount equal to thirty percent of the amount of credit allowed the
   42  taxpayer with respect to a certified historic structure under subsection
   43  (a)(2) of section 47 of the federal internal revenue code  with  respect
   44  to  a  certified  historic structure located within the state. Provided,
   45  however, the credit shall not exceed one hundred thousand dollars.
   46    (4) The credit allowed under this  subsection  for  any  taxable  year
   47  shall not reduce the tax to less than the dollar amount fixed as a mini-
   48  mum tax by subsection (b) of section fourteen hundred fifty-five of this
   49  article.  [If  the  amount of credit allowable under this subsection for
   50  any taxable year reduces the tax to  such  amount,  the  excess  may  be
   51  carried  over  to  the following year or years, and may be deducted from
   52  the taxpayer's tax for such year or years.] HOWEVER, IF  THE  AMOUNT  OF
   53  CREDIT  ALLOWED  UNDER  THIS SUBSECTION FOR ANY TAXABLE YEAR REDUCES THE
   54  TAX TO SUCH AMOUNT, ANY AMOUNT OF CREDIT THUS  NOT  DEDUCTIBLE  IN  SUCH
   55  TAXABLE YEAR SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR
   56  REFUNDED  IN  ACCORDANCE  WITH  THE  PROVISIONS  OF SECTION ONE THOUSAND
       S. 2609                            42                            A. 3009
    1  EIGHTY-SIX  OF  THIS  CHAPTER.  PROVIDED,  HOWEVER,  THE  PROVISIONS  OF
    2  SUBSECTION  (C)  OF  SECTION  ONE  THOUSAND EIGHTY-EIGHT OF THIS CHAPTER
    3  NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
    4    (5)  To be eligible for the credit allowable under this subsection the
    5  rehabilitation project shall be in whole or in  part  [a  targeted  area
    6  residence  within  the meaning of section 143(j) of the internal revenue
    7  code or] located within a census tract which is identified as  being  at
    8  or  below  one hundred percent of the state median family income [in the
    9  most recent federal census] AS CALCULATED USING A FIVE YEAR SAMPLE  FROM
   10  THE  AMERICAN COMMUNITY SURVEY BEGINNING WITH THE YEAR TWO THOUSAND SIX-
   11  -YEAR TWO THOUSAND ELEVEN SAMPLE.
   12    S 4. Subparagraph (A) of paragraph 1, and paragraphs 4 and 5 of subdi-
   13  vision (y) of section 1511 of the tax law, as added by  chapter  472  of
   14  the laws of 2010, are amended to read as follows:
   15    (A)  For  taxable years beginning on or after January first, two thou-
   16  sand ten and before January first,  two  thousand  [fifteen]  TWENTY,  a
   17  taxpayer  shall be allowed a credit as hereinafter provided, against the
   18  tax imposed by this article, in an amount equal to one  hundred  percent
   19  of the amount of credit allowed the taxpayer with respect to a certified
   20  historic  structure under subsection (a)(2) of section 47 of the federal
   21  internal revenue code with respect to  a  certified  historic  structure
   22  located within the state. Provided, however, the credit shall not exceed
   23  five  million  dollars.  For taxable years beginning on or after January
   24  first, two thousand [fifteen] TWENTY, a  taxpayer  shall  be  allowed  a
   25  credit as hereinafter provided, against the tax imposed by this article,
   26  in an amount equal to thirty percent of the amount of credit allowed the
   27  taxpayer with respect to a certified historic structure under subsection
   28  (a)(2)  of  section 47 of the federal internal revenue code with respect
   29  to a certified historic structure located within  the  state.  Provided,
   30  however, the credit shall not exceed one hundred thousand dollars.
   31    (4)  The  credit  allowed  under this subdivision for any taxable year
   32  shall not reduce the tax due for such year  to  less  than  the  minimum
   33  fixed  by  paragraph  four of subdivision (a) of section fifteen hundred
   34  two or section fifteen hundred  two-a  of  this  article,  whichever  is
   35  applicable.   [If the amount of the credit allowable under this subdivi-
   36  sion for any taxable year reduces the tax to such amount, the excess may
   37  be carried over to the following year or years, and may be deducted from
   38  the taxpayer's tax for such year or years.] HOWEVER, IF  THE  AMOUNT  OF
   39  CREDITS  ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE
   40  TAX TO SUCH AMOUNT, ANY AMOUNT OF CREDIT THUS  NOT  DEDUCTIBLE  IN  SUCH
   41  TAXABLE YEAR SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR
   42  REFUNDED  IN  ACCORDANCE  WITH  THE  PROVISIONS  OF SECTION ONE THOUSAND
   43  EIGHTY-SIX  OF  THIS  CHAPTER.  PROVIDED,  HOWEVER,  THE  PROVISIONS  OF
   44  SUBSECTION  (C)  OF  SECTION  ONE  THOUSAND EIGHTY-EIGHT OF THIS CHAPTER
   45  NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
   46    (5) To be eligible for the credit allowable  under  this  subdivision,
   47  the rehabilitation project shall be in whole or in part [a targeted area
   48  residence  within  the meaning of section 143(j) of the internal revenue
   49  code or] located within a census tract which is identified as  being  at
   50  or  below  one hundred percent of the state median family income [in the
   51  most recent federal census] AS CALCULATED USING A FIVE YEAR SAMPLE  FROM
   52  THE  AMERICAN COMMUNITY SURVEY BEGINNING WITH THE YEAR TWO THOUSAND SIX-
   53  -YEAR TWO THOUSAND ELEVEN SAMPLE.
   54    S 5. This act shall take effect immediately and shall apply to taxable
   55  years beginning on and after  January  1,  2013;  provided  however  the
   56  amendments  to  paragraph 4 of subsection (oo) of section 606 of the tax
       S. 2609                            43                            A. 3009
    1  law made by section one of this act, the amendments to  paragraph  4  of
    2  subdivision 40 of section 210 of the tax law made by section two of this
    3  act,  the  amendments to paragraph 4 of section 1456 of the tax law made
    4  by  section  three  of  this  act  and  the amendments to paragraph 4 of
    5  section 1511 of the tax law made by section four of this act shall  take
    6  effect January 1, 2015 and shall apply to taxable years beginning on and
    7  after January 1, 2015.
    8                                   PART G
    9    Section  1.  Section 187-b of the tax law, as amended by section 14 of
   10  part W-1 of chapter 109 of the laws of  2006,  is  amended  to  read  as
   11  follows:
   12    S  187-b. [Alternative fuels credit] ELECTRIC VEHICLE RECHARGING PROP-
   13  ERTY CREDIT. 1. General. A taxpayer shall be allowed  a  credit,  to  be
   14  credited  against  the  taxes imposed under sections one hundred eighty-
   15  three, one hundred eighty-four, and  one  hundred  eighty-five  of  this
   16  article.  Such  credit, to be computed as hereinafter provided, shall be
   17  allowed  for  [alternative  fuel  vehicle  refueling]  ELECTRIC  VEHICLE
   18  RECHARGING property placed in service during the taxable year. Provided,
   19  however,  that  the  amount  of  such  credit  allowable against the tax
   20  imposed by section one hundred eighty-four of this article shall be  the
   21  excess  of  the  credit  allowed by this section over the amount of such
   22  credit allowable against the tax imposed by section one hundred  eighty-
   23  three of this article.
   24    2.  [Alternative  fuel  vehicle  refueling  property] ELECTRIC VEHICLE
   25  RECHARGING PROPERTY.   The credit under this  section  for  [alternative
   26  fuel vehicle refueling] ELECTRIC VEHICLE RECHARGING property shall equal
   27  FOR EACH INSTALLATION OF PROPERTY THE LESSER OF FIVE THOUSAND DOLLARS OR
   28  fifty percent of the cost of any such property:
   29    (a) which is located in this state; [and]
   30    (b)  [for  which  a  credit  is  allowed under section thirty C of the
   31  internal revenue code but not including alternative fuel vehicle refuel-
   32  ing property relating to a qualified hybrid vehicle as such  vehicle  is
   33  defined  in  subparagraph  (B)  of  paragraph three of subsection (p) of
   34  section six hundred six of  this  chapter]  WHICH  CONSTITUTES  ELECTRIC
   35  VEHICLE RECHARGING PROPERTY; AND
   36    (C)  FOR WHICH NONE OF THE COST HAS BEEN PAID FOR FROM THE PROCEEDS OF
   37  GRANTS, INCLUDING GRANTS FROM THE NEW YORK  STATE  ENERGY  RESEARCH  AND
   38  DEVELOPMENT AUTHORITY OR THE NEW YORK POWER AUTHORITY.
   39    3.  Definitions.  [(a)]  The term ["alternative fuel vehicle refueling
   40  property"] "ELECTRIC VEHICLE RECHARGING PROPERTY" means [any such  prop-
   41  erty  which  is  qualified within the meaning of section thirty C of the
   42  internal revenue code, but shall not include  alternative  fuel  vehicle
   43  refueling  property relating to a qualified hybrid vehicle as such vehi-
   44  cle is defined in subparagraph (B) of paragraph three of subsection  (p)
   45  of  section six hundred six of this chapter] ALL THE EQUIPMENT NEEDED TO
   46  CONVEY ELECTRIC POWER FROM THE ELECTRIC GRID OR ANOTHER POWER SOURCE  TO
   47  AN ONBOARD VEHICLE ENERGY STORAGE SYSTEM.
   48    [(b)  The  term "qualified hybrid vehicle" shall have the same meaning
   49  as provided for under subparagraph (B) of paragraph three of  subsection
   50  (p) of section six hundred six of this chapter.]
   51    4.  Carryovers.  In  no  event  shall the credit under this section be
   52  allowed in an amount which will reduce the tax payable to less than  the
   53  applicable  minimum tax fixed by section one hundred eighty-three or one
   54  hundred eighty-five of this article. If, however, the amount  of  credit
       S. 2609                            44                            A. 3009
    1  allowable  under  this  section  for any taxable year reduces the tax to
    2  such amount, any amount of credit not deductible in  such  taxable  year
    3  may  be  carried over to the following year or years and may be deducted
    4  from the taxpayer's tax for such year or years.
    5    5.  Credit  recapture[;  Alternative fuel vehicle refueling property].
    6  If, at any time before the end of its recovery period, [alternative fuel
    7  vehicle refueling] ELECTRIC VEHICLE RECHARGING  property  ceases  to  be
    8  qualified,  a  recapture  amount must be added back in the year in which
    9  such cessation occurs.
   10    (i) Cessation of qualification. [Alternative  fuel  vehicle  refueling
   11  property]  ELECTRIC  VEHICLE  RECHARGING PROPERTY ceases to be qualified
   12  if:
   13    (I) the property no longer qualifies as [property described in section
   14  thirty C of the internal revenue code] ELECTRIC VEHICLE RECHARGING PROP-
   15  ERTY; or
   16    (II) fifty percent or more of the use of the  property  in  a  taxable
   17  year is other than a trade or business in this state; or
   18    (III)  the  taxpayer  receiving the credit under this section sells or
   19  disposes of the property and knows or has reason to know that the  prop-
   20  erty will be used in a manner described in this subparagraph.
   21    (ii)  Recapture  amount.  The  recapture amount is equal to the credit
   22  allowable under this section multiplied by a fraction, the numerator  of
   23  which  is the total recovery period for the property minus the number of
   24  recovery years prior to, but not including, the recapture year, and  the
   25  denominator of which is the total recovery period.
   26    6.  Termination. The credit allowed by subdivision two of this section
   27  shall not apply in taxable years beginning after December  thirty-first,
   28  two thousand [ten] SEVENTEEN.
   29    S  2.  Subdivision  24  of  section  210 of the tax law, as amended by
   30  section 15 of part W-1 of chapter 109 of the laws of 2006, is amended to
   31  read as follows:
   32    24. [Alternative fuels] ELECTRIC VEHICLE RECHARGING  PROPERTY  credit.
   33  (a)  General.  A  taxpayer  shall be allowed a credit, to be computed as
   34  hereinafter provided, against  the  tax  imposed  by  this  article  for
   35  [alternative fuel vehicle refueling] ELECTRIC VEHICLE RECHARGING proper-
   36  ty placed in service during the taxable year.
   37    (b)  [Alternative  fuel  vehicle  refueling property] ELECTRIC VEHICLE
   38  RECHARGING PROPERTY.  The credit under this subdivision for [alternative
   39  fuel vehicle refueling] ELECTRIC VEHICLE RECHARGING property shall equal
   40  FOR EACH INSTALLATION OF PROPERTY THE LESSER OF FIVE THOUSAND DOLLARS OR
   41  fifty percent of the cost of any such property:
   42    (i) which is located in this state; [and]
   43    (ii) [for which a credit is allowed under  section  thirty  C  of  the
   44  internal revenue code but not including alternative fuel refueling prop-
   45  erty  relating  to a qualified hybrid vehicle as such vehicle is defined
   46  in subparagraph (B) of paragraph three of subsection (p) of section  six
   47  hundred  six of this chapter] WHICH IS ELECTRIC VEHICLE RECHARGING PROP-
   48  ERTY; AND
   49    (III) FOR WHICH NONE OF THE COST HAS BEEN PAID FOR FROM  THE  PROCEEDS
   50  OF  GRANTS, INCLUDING GRANTS FROM THE NEW YORK STATE ENERGY RESEARCH AND
   51  DEVELOPMENT AUTHORITY OR THE NEW YORK POWER AUTHORITY.
   52    (c) Definitions. The term ["alternative fuel vehicle refueling proper-
   53  ty"] "ELECTRIC VEHICLE RECHARGING PROPERTY"  means  [any  such  property
   54  which  is qualified within the meaning of section thirty C of the inter-
   55  nal revenue code but shall not include alternative fuel vehicle  refuel-
   56  ing  property  relating to a qualified hybrid vehicle as such vehicle is
       S. 2609                            45                            A. 3009
    1  defined in subparagraph (B) of paragraph  three  of  subsection  (p)  of
    2  section  six hundred six of this chapter] ALL OF THE EQUIPMENT NEEDED TO
    3  CONVEY ELECTRIC POWER FROM THE ELECTRIC GRID OR ANOTHER POWER SOURCE  TO
    4  AN ONBOARD VEHICLE ENERGY STORAGE SYSTEM.
    5    (d) Carryovers. In no event shall the credit under this subdivision be
    6  allowed  in an amount which will reduce the tax payable to less than the
    7  higher of the amounts prescribed in paragraphs (c) and (d)  of  subdivi-
    8  sion one of this section. Provided, however, that if the amount of cred-
    9  it allowable under this subdivision for any taxable year reduces the tax
   10  to such amount, any amount of credit not deductible in such taxable year
   11  may  be  carried over to the following year or years and may be deducted
   12  from the taxpayer's tax for such year or years.
   13    (e) Credit recapture. [(i) Alternative fuel vehicle refueling  proper-
   14  ty.] If, at any time before the end of its recovery period, [alternative
   15  fuel  vehicle  refueling] ELECTRIC VEHICLE RECHARGING property ceases to
   16  be qualified, a recapture amount must be added back in the year in which
   17  such cessation occurs.
   18    (A) [Alternative fuel vehicle refueling] ELECTRIC  VEHICLE  RECHARGING
   19  property ceases to be qualified if:
   20    (1) the property no longer qualifies as [property described in section
   21  thirty C of the internal revenue code] ELECTRIC VEHICLE RECHARGING PROP-
   22  ERTY; or
   23    (2) fifty percent or more of the use of the property in a taxable year
   24  is other than in a trade or business in this state; or
   25    (3)  the taxpayer receiving the credit under this subdivision sells or
   26  disposes of the property and knows or has reason to know that the  prop-
   27  erty  will  be used in a manner described in clauses one and two of this
   28  subparagraph.
   29    (B) Recapture amount. The recapture amount  is  equal  to  the  credit
   30  allowable under this subdivision multiplied by a fraction, the numerator
   31  of  which is the total recovery period for the property minus the number
   32  of recovery years prior to, but not including, the recapture  year,  and
   33  the denominator of which is the total recovery period.
   34    [(f)  Affiliates. (i) If a credit under this subdivision is allowed to
   35  a taxpayer with respect to a taxable year,  the  action  taken  by  such
   36  taxpayer which resulted in such credit being allowed thereto may, at the
   37  election  of  the taxpayer and an affiliate thereof, be ascribed to such
   38  affiliate. Where such affiliate, based on such  ascription,  is  allowed
   39  such  credit  and  deducts from the tax otherwise due the amount of such
   40  credit, such credit shall be deemed in all respects to have been allowed
   41  to such affiliate, provided that any action or inaction by the  taxpayer
   42  which  constitutes  an  event of recapture described in paragraph (e) of
   43  this subdivision shall be ascribed to the affiliate and shall constitute
   44  an event of recapture with respect to the credit allowed to  the  affil-
   45  iate pursuant to this subdivision.
   46    (ii)  Notwithstanding  any  other provision of law to the contrary, in
   47  the case of the credit provided for under this subdivision being allowed
   48  to, or asserted to be allowed to, an affiliate, pursuant to subparagraph
   49  (i) of this paragraph, the commissioner shall have the same powers  with
   50  respect  to  examining  the  books and records of the taxpayer, and have
   51  such other powers of investigation with respect to the taxpayer, as  are
   52  afforded  under  this  chapter  with  respect  to  a  taxpayer which has
   53  deducted the credit allowed under this section from tax  otherwise  due,
   54  as  if  it  were  the  taxpayer  which had deducted such credit from tax
   55  otherwise due.
       S. 2609                            46                            A. 3009
    1    (iii) The term "affiliate" shall mean a corporation substantially  all
    2  the  capital  stock  of  which is owned or controlled either directly or
    3  indirectly by the taxpayer, or which owns or controls either directly or
    4  indirectly substantially all the  capital  stock  of  the  taxpayer,  or
    5  substantially  all  the  capital  stock  of which is owned or controlled
    6  either directly or indirectly by interests which own or  control  either
    7  directly  or  indirectly  substantially  all  the  capital  stock of the
    8  taxpayer.]
    9    [(g)] (F) Termination. The credit allowed by  paragraph  (b)  of  this
   10  subdivision  shall  not  apply in taxable years beginning after December
   11  thirty-first, two thousand [ten] SEVENTEEN.
   12    S 3. Subsection (p) of section 606 of  the  tax  law,  as  amended  by
   13  section 16 of part W-1 of chapter 109 of the laws of 2006, is amended to
   14  read as follows:
   15    (p)  [Alternative  fuels] ELECTRIC VEHICLE RECHARGING PROPERTY credit.
   16  (1) General. A taxpayer shall be allowed a credit,  to  be  computed  as
   17  hereinafter  provided,  against  the  tax  imposed  by this article, for
   18  [alternative fuel vehicle refueling] ELECTRIC VEHICLE RECHARGING proper-
   19  ty placed in service during the taxable year.
   20    (2) [Alternative fuel vehicle  refueling  property]  ELECTRIC  VEHICLE
   21  RECHARGING  PROPERTY.   The credit under this subsection for [clean-fuel
   22  vehicle refueling] ELECTRIC VEHICLE RECHARGING property shall equal  FOR
   23  EACH  INSTALLATION  OF  PROPERTY  THE LESSER OF FIVE THOUSAND DOLLARS OR
   24  fifty percent of the cost of any such property
   25    (A) which is located in this state [and];
   26    (B) [for which a credit is allowed  under  section  thirty  C  of  the
   27  internal revenue code but not including alternative fuel vehicle refuel-
   28  ing  property  relating to a qualified hybrid vehicle as such vehicle is
   29  defined in subparagraph (B) of paragraph three of this subsection] WHICH
   30  IS ELECTRIC VEHICLE RECHARGING PROPERTY; AND
   31    (C) FOR WHICH NONE OF THE COST HAS BEEN PAID FOR FROM THE PROCEEDS  OF
   32  GRANTS,  INCLUDING  GRANTS  FROM  THE NEW YORK STATE ENERGY RESEARCH AND
   33  DEVELOPMENT AUTHORITY OR THE NEW YORK POWER AUTHORITY.
   34    (3) Definitions. [(A)] The term ["alternative fuel  vehicle  refueling
   35  property"]  "ELECTRIC VEHICLE RECHARGING PROPERTY" means [any such prop-
   36  erty which is qualified within the meaning of section thirty  C  of  the
   37  internal  revenue code, but such term shall not include alternative fuel
   38  vehicle refueling property relating to a  qualified  hybrid  vehicle  as
   39  such  vehicle  is defined in subparagraph (B) of this paragraph] ALL THE
   40  EQUIPMENT NEEDED TO CONVEY ELECTRIC POWER  FROM  THE  ELECTRIC  GRID  OR
   41  ANOTHER POWER SOURCE TO AN ONBOARD VEHICLE ENERGY STORAGE SYSTEM.
   42    [(B)  The  term  "qualified  hybrid vehicle" means a motor vehicle, as
   43  defined in section one hundred twenty-five of the  vehicle  and  traffic
   44  law,, that:
   45    (i) draws propulsion energy from both
   46    (a)  an internal combustion engine (or heat engine that uses combusti-
   47  ble fuel); and
   48    (b) an energy storage device; and
   49    (ii) employs a regenerative vehicle braking system that recovers waste
   50  energy to charge such energy storage device.]
   51    (4)  Carryovers.  If  the  amount  of  credit  allowable  under   this
   52  subsection shall exceed the taxpayer's tax for such year, the excess may
   53  be  carried over to the following year or years and may be deducted from
   54  the taxpayer's tax for such year or years.
   55    (5) Credit recapture. (A) [Vehicles.
       S. 2609                            47                            A. 3009
    1    (i) If, within three full years from the date a qualified hybrid vehi-
    2  cle or a vehicle of which alternative fuel vehicle property is a part is
    3  placed in service, such qualified hybrid vehicle  or  vehicle  of  which
    4  alternative  fuel vehicle property is a part] IF, AT ANY TIME BEFORE THE
    5  END  OF ITS RECOVERY PERIOD, ELECTRIC VEHICLE RECHARGING PROPERTY ceases
    6  to be qualified, a recapture amount must be added back in the  tax  year
    7  in which such cessation occurs.
    8    [(ii)] (B) Cessation of qualification. [(I) A qualified hybrid vehicle
    9  ceases to be qualified if
   10    (a)  it  is  modified  by  the taxpayer so that it no longer meets the
   11  requirements of a qualified hybrid vehicle as  defined  in  subparagraph
   12  (B) of paragraph three of this subsection.
   13    (b)  the  taxpayer receiving the credit under this subsection sells or
   14  disposes of the vehicle and knows or has reason to know that the vehicle
   15  will be so modified.
   16    (B) Alternative fuel vehicle refueling property. (i) If, at  any  time
   17  before  the end of its recovery period, alternative fuel vehicle refuel-
   18  ing property ceases to be qualified, a recapture amount  must  be  added
   19  back in the year in which such cessation occurs.
   20    (ii)  Cessation  of qualification. Clean-fuel vehicle refueling] ELEC-
   21  TRIC VEHICLE RECHARGING property ceases to be qualified if:
   22    [(I)] (I) the property no longer qualifies as [property  described  in
   23  section thirty C of the internal revenue code] ELECTRIC VEHICLE RECHARG-
   24  ING PROPERTY, or
   25    [(II)]  (II)  fifty  percent  or  more of the use of the property in a
   26  taxable year is other than in a trade or business in this state, or
   27    [(III)] (III) the taxpayer receiving the credit under this  subsection
   28  sells  or  disposes of the property and knows or has reason to know that
   29  the property will be used in a manner described in [item (I)] CLAUSE (I)
   30  or [(II)] (II) of this [clause] SUBPARAGRAPH.
   31    [(iii)] (C) Recapture amount. The recapture amount  is  equal  to  the
   32  credit  allowable  under  this  subsection multiplied by a fraction, the
   33  numerator of which is the total recovery period for the  property  minus
   34  the  number of recovery years prior to, but not including, the recapture
   35  year, and the denominator of which is the total recovery period.
   36    (6) Termination.  The  credit  allowed  by  [paragraph  two  of]  this
   37  subsection  shall  not  apply  in taxable years beginning after December
   38  thirty-first, two thousand [ten] SEVENTEEN.
   39    S 4. Clause (ix) of subparagraph (B) of paragraph 1 of subsection  (i)
   40  of  section  606  of the tax law, as amended by section 7 of part C-1 of
   41  chapter 57 of the laws of 2009, is amended to read as follows:
   42  (ix) [Alternative fuels]             [Cost] AMOUNT OF CREDIT
   43  ELECTRIC VEHICLE                     under subdivision twenty-four
   44  RECHARGING PROPERTY                  of section two hundred ten
   45  credit under subsection (p)
   46    S 5. This act shall take effect immediately and shall apply to taxable
   47  years beginning on or after January  1,  2013  for  property  placed  in
   48  service on or after such date.
   49                                   PART H
   50    Section  1.  Paragraph  10 of subsection (g) of section 658 of the tax
   51  law is REPEALED.
       S. 2609                            48                            A. 3009
    1    S 2. Paragraph 10 of subdivision (g) of section 11-1758 of the  admin-
    2  istrative code of the city of New York is REPEALED.
    3    S  3.  Paragraph  5 of subsection (u) of section 685 of the tax law is
    4  REPEALED.
    5    S 4. Paragraph 5 of subdivision (t) of section 11-1785 of the adminis-
    6  trative code of the city of New York is REPEALED.
    7    S 5. Section 23 of part U of chapter  61  of  the  laws  of  2011,  as
    8  amended  by  section  1  of part G of chapter 59 of the laws of 2012, is
    9  amended to read as follows:
   10    S 23. This act shall take effect immediately; provided, however, that:
   11    (a) the amendments to section 29 of the tax law made by section  thir-
   12  teen  of  this  act shall apply to tax documents filed or required to be
   13  filed on or after the sixtieth day  after  which  this  act  shall  have
   14  become  a  law  [and  shall  expire  and be deemed repealed December 31,
   15  2013], provided however that the amendments to paragraph 4  of  subdivi-
   16  sion (a) of section 29 of the tax law and paragraph 2 of subdivision (e)
   17  of  section  29 of the tax law made by section thirteen of this act with
   18  regard to individual taxpayers shall take effect September 15, 2011  but
   19  only  if  the  commissioner  of taxation and finance has reported in the
   20  report required by section seventeen-b of this act that  the  percentage
   21  of  individual  taxpayers  electronically  filing  their 2010 income tax
   22  returns is less than eighty-five percent; provided that the commissioner
   23  of taxation and finance  shall  notify  the  legislative  bill  drafting
   24  commission  of the date of the issuance of such report in order that the
   25  commission may maintain an accurate and timely effective  data  base  of
   26  the official text of the laws of the state of New York in furtherance of
   27  effectuating  the  provisions  of  section 44 of the legislative law and
   28  section 70-b of the public officers law;
   29    (b) sections fourteen, fifteen, sixteen  and  seventeen  of  this  act
   30  shall  take  effect  September  15, 2011 but only if the commissioner of
   31  taxation and finance has reported in  the  report  required  by  section
   32  seventeen-b  of  this  act  that  the percentage of individual taxpayers
   33  electronically filing their 2010 income tax returns is less than  eight-
   34  y-five percent;
   35    (c)  sections  fourteen-a  and fifteen-a of this act shall take effect
   36  September 15, 2011 and expire and be deemed repealed December  31,  2012
   37  but  shall  take effect only if the commissioner of taxation and finance
   38  has reported in the report required by section seventeen-b of  this  act
   39  that  the percentage of individual taxpayers electronically filing their
   40  2010 income tax returns is eighty-five percent or greater; AND
   41    (d) sections fourteen-b, fifteen-b, sixteen-a and seventeen-a of  this
   42  act  shall  take  effect January 1, 2014 but only if the commissioner of
   43  taxation and finance has reported in  the  report  required  by  section
   44  seventeen-b  of  this  act  that  the percentage of individual taxpayers
   45  electronically filing their 2010 income tax returns is less than  eight-
   46  y-five percent[; and
   47    (e)  sections twenty-one and twenty-one-a of this act shall expire and
   48  be deemed repealed December 31, 2013].
   49    S 6. This act shall take effect immediately.
   50                                   PART I
   51    Section 1. Legislative intent. The legislature  seeks  to  demonstrate
   52  that  the  state of New York is open for business by promoting, attract-
   53  ing, and encouraging the development of business  in  the  state.    The
   54  legislature  intends  to encourage businesses to locate in the state and
       S. 2609                            49                            A. 3009
    1  produce goods and services within  the  state,  thereby  increasing  job
    2  creation  and economic growth. The legislature further intends to foster
    3  economic development by showcasing various goods that  are  produced  in
    4  New  York.  In  order  to  accomplish  these objectives, the legislature
    5  intends that there shall be  established  "Taste-NY  facilities,"  which
    6  will  sell  a variety of products, including but not limited to products
    7  produced within the state, and prominently  feature  New  York  produced
    8  goods, including alcoholic beverages.
    9    S  2.  Subdivision  (b)  of  section 1101 of the tax law is amended by
   10  adding a new paragraph 39 to read as follows:
   11    (39) TASTE-NY FACILITY. "TASTE-NY  FACILITY"  SHALL  MEAN  A  FACILITY
   12  OPERATED  BY  A PERSON DESIGNATED BY AND PURSUANT TO A WRITTEN AGREEMENT
   13  WITH A STATE AGENCY, PUBLIC AUTHORITY, OR AN INTERSTATE AGENCY OR PUBLIC
   14  CORPORATION CREATED PURSUANT TO AN AGREEMENT  OR  COMPACT  WITH  ANOTHER
   15  STATE  OR  THE DOMINION OF CANADA, FROM WHICH SALES ARE MADE OF TANGIBLE
   16  PERSONAL PROPERTY OR FOOD AND DRINK (WHETHER OR NOT FOR  CONSUMPTION  ON
   17  THE  PREMISES  OF SUCH FACILITY), AND THAT PROMINENTLY FEATURES PRODUCTS
   18  PRODUCED WITHIN THE STATE.
   19    S 3. Subdivision (a) of section 1115 of the  tax  law  is  amended  by
   20  adding a new paragraph 44 to read as follows:
   21    (44)  TANGIBLE  PERSONAL  PROPERTY  SOLD  AT  A  TASTE-NY FACILITY, AS
   22  DEFINED IN PARAGRAPH THIRTY-NINE OF SECTION ELEVEN HUNDRED ONE  OF  THIS
   23  ARTICLE,  FOR  WHICH THE RECEIPT OR CONSIDERATION GIVEN OR CONTRACTED TO
   24  BE GIVEN IS LESS THAN TWO HUNDRED DOLLARS PER ITEM.
   25    S 4. Section 1115 of the tax law is amended by adding a  new  subdivi-
   26  sion (ii) to read as follows:
   27    (II) RECEIPTS FROM SALES OF THE FOLLOWING AT A TASTE-NY FACILITY SHALL
   28  BE  EXEMPT  FROM THE SALES TAX IMPOSED UNDER SECTION ELEVEN HUNDRED FIVE
   29  AND THE COMPENSATING USE TAX IMPOSED UNDER SECTION ELEVEN HUNDRED TEN OF
   30  THIS ARTICLE: (1) FOOD OR DRINK FOR CONSUMPTION ON THE PREMISES OF  SUCH
   31  FACILITY;  (2)  FOOD  OR  DRINK SOLD FOR CONSUMPTION OFF THE PREMISES OF
   32  SUCH FACILITY THAT IS SOLD IN A HEATED STATE; (3)  SANDWICHES  SOLD  FOR
   33  CONSUMPTION  OFF THE PREMISES OF SUCH FACILITY, WHETHER OR NOT SOLD IN A
   34  HEATED STATE; (4) FOOD OR DRINK SOLD THROUGH VENDING MACHINES;  AND  (5)
   35  FOOD  OR DRINK SOLD IN AN UNHEATED STATE THAT IS OF A TYPE COMMONLY SOLD
   36  FOR OFF-PREMISES CONSUMPTION AND IS NOT IN  THE  SAME  FORM,  CONDITION,
   37  QUANTITIES AND PACKAGING AS IN ESTABLISHMENTS THAT ARE FOOD STORES OTHER
   38  THAN THOSE PRINCIPALLY ENGAGED IN SELLING FOODS PREPARED AND READY TO BE
   39  EATEN.
   40    S  5.  The  alcoholic  beverage control law is amended by adding a new
   41  section 63-b to read as follows:
   42    S 63-B. SPECIAL LICENSE TO SELL  ALCOHOLIC  BEVERAGES  AT  RETAIL  FOR
   43  CONSUMPTION  OFF  THE  PREMISES.  1.  ANY PERSON AUTHORIZED TO OPERATE A
   44  TASTE-NY FACILITY DESIGNATED BY AND PURSUANT TO A WRITTEN AGREEMENT WITH
   45  A STATE AGENCY, PUBLIC AUTHORITY, OR  AN  INTERSTATE  AGENCY  OR  PUBLIC
   46  CORPORATION  CREATED  PURSUANT  TO  AN AGREEMENT OR COMPACT WITH ANOTHER
   47  STATE OR THE DOMINION OF CANADA MAY MAKE APPLICATION  TO  THE  AUTHORITY
   48  FOR A SPECIAL LICENSE TO SELL ALCOHOLIC BEVERAGES AT RETAIL FOR CONSUMP-
   49  TION OFF THE LICENSED PREMISES.
   50    2.  AN  APPLICATION  FOR A LICENSE UNDER THIS SECTION SHALL BE IN SUCH
   51  FORM AND SHALL CONTAIN SUCH INFORMATION AS  SHALL  BE  REQUIRED  BY  THE
   52  AUTHORITY  AND  SHALL  BE  ACCOMPANIED BY A CHECK OR DRAFT IN THE AMOUNT
   53  REQUIRED BY THIS ARTICLE.
   54    3. SECTION FIFTY-FOUR OF THIS CHAPTER  SHALL  CONTROL  SO  FAR  AS  IS
   55  APPLICABLE THE PROCEDURE IN CONNECTION WITH SUCH APPLICATION.
       S. 2609                            50                            A. 3009
    1    4. A LICENSE UNDER THIS SECTION SHALL BE ISSUED TO ALL ELIGIBLE APPLI-
    2  CANTS EXCEPT FOR GOOD CAUSE SHOWN.
    3    5. A LICENSE UNDER THIS CHAPTER SHALL NOT BE SUBJECT TO THE PROVISIONS
    4  OF  SUBDIVISIONS TWO, THREE, SIX AND SIXTEEN OF SECTION ONE HUNDRED FIVE
    5  OF THIS CHAPTER.
    6    6. NOTWITHSTANDING THE PROVISIONS OF SUBDIVISION FOURTEEN  OF  SECTION
    7  ONE  HUNDRED  FIVE  OF  THIS CHAPTER, THE HOURS OF OPERATION AND SALE OF
    8  ALCOHOLIC BEVERAGES SHALL BE GOVERNED BY THE LICENSEE'S  WRITTEN  AGREE-
    9  MENT  WITH  THE  STATE  AGENCY,  PUBLIC  AUTHORITY, INTERSTATE AGENCY OR
   10  COMPACT ENTITY.
   11    7. SUBJECT TO ANY RESTRICTION CONTAINED IN THE WRITTEN AGREEMENT  WITH
   12  THE STATE AGENCY, PUBLIC AUTHORITY, INTERSTATE AGENCY OR COMPACT ENTITY,
   13  THE  HOLDER  OF A LICENSE ISSUED UNDER THIS SECTION MAY OFFER SAMPLES OF
   14  ALCOHOLIC BEVERAGES TO CUSTOMERS TO BE CONSUMED ON THE LICENSED PREMISES
   15  UPON THE FOLLOWING CONDITIONS:
   16    (A) NO FEE SHALL BE CHARGED FOR ANY SAMPLE;
   17    (B) EACH SAMPLE SHALL BE LIMITED:
   18    (I) IN THE CASE OF BEER, WINE PRODUCTS AND CIDER, TO THREE  OUNCES  OR
   19  LESS;
   20    (II) IN THE CASE OF WINE, TO TWO OUNCES;
   21    (III) IN THE CASE OF LIQUOR, TO ONE-QUARTER OUNCE;
   22    (C) NO SAMPLE SHALL BE PROVIDED TO A CUSTOMER DURING THE HOURS PROHIB-
   23  ITED BY THE PROVISIONS OF SUBDIVISION FIVE OF SECTION ONE HUNDRED SIX OF
   24  THIS CHAPTER; AND
   25    (D)  NO  CUSTOMER  MAY BE PROVIDED WITH MORE THAN THREE SAMPLES IN ONE
   26  CALENDAR DAY.
   27    S 6. Section 66 of the alcoholic beverage control law  is  amended  by
   28  adding a new subdivision 11 to read as follows:
   29    11.  THE  ANNUAL FEE FOR A SPECIAL LICENSE TO SELL ALCOHOLIC BEVERAGES
   30  AT RETAIL FOR CONSUMPTION  OFF  THE  LICENSED  PREMISES  SHALL  BE  FIVE
   31  HUNDRED DOLLARS.
   32    S  7.  Section 67 of the alcoholic beverage control law, as amended by
   33  section 4 of part Z of chapter 85 of the laws of  2002,  is  amended  to
   34  read as follows:
   35    S 67. License  fees,  duration  of  licenses;  fee  for  part of year.
   36  [Effective April first,  nineteen  hundred  eighty-three,  licenses]  1.
   37  LICENSES  issued pursuant to sections sixty-one, sixty-two, sixty-three,
   38  [sixty-four, sixty-four-a and sixty-four-b] AND  SIXTY-THREE-B  of  this
   39  article  shall  be  effective for three years at three times that annual
   40  fee, except that, in implementing the  purposes  of  this  section,  the
   41  liquor  authority  shall  schedule  the commencement dates, duration and
   42  expiration dates thereof to  provide  for  an  equal  cycle  of  license
   43  renewals issued under each such section through the course of the fiscal
   44  year.     [Effective  December  first,  nineteen  hundred  ninety-eight,
   45  licenses]
   46    2. LICENSES issued pursuant to sections sixty-four,  sixty-four-a  and
   47  sixty-four-b  of  this  article  shall be effective for two years at two
   48  times that annual fee, except that, in implementing the purposes of this
   49  section, the liquor authority shall  schedule  the  commencement  dates,
   50  duration  and  expiration dates thereof to provide for an equal cycle of
   51  license renewals issued under each such section through  the  course  of
   52  the  fiscal year. [Notwithstanding the foregoing, commencing on December
   53  first, nineteen hundred ninety-eight  and  concluding  on  July  thirty-
   54  first, two thousand two, a licensee issued a license pursuant to section
   55  sixty-four,  sixty-four-a  or  sixty-four-b of this article may elect to
   56  remit the fee for  such  license  in  equal  annual  installments.  Such
       S. 2609                            51                            A. 3009
    1  installments  shall  be due on dates established by the liquor authority
    2  and the failure of a licensee to have remitted such annual  installments
    3  after  a  due  date  shall  be a violation of this chapter. For licenses
    4  issued  for  less  than the three-year licensing period, the license fee
    5  shall be levied on a pro-rated basis.]
    6    3. The entire license fee shall be due and  payable  at  the  time  of
    7  application. The liquor authority may make such rules as shall be appro-
    8  priate to carry out the purpose of this section.
    9    S  8.  Subdivisions  1 and 2 of section 56-a of the alcoholic beverage
   10  control law, as amended by chapter 108 of the laws of 2012, are  amended
   11  to read as follows:
   12    1.  In addition to the annual fees provided for in this chapter, there
   13  shall be paid to the authority  with  each  initial  application  for  a
   14  license  filed  pursuant to section fifty-one, fifty-one-a, fifty-three,
   15  fifty-eight, sixty-one, sixty-two, seventy-six or seventy-eight of  this
   16  chapter,  a filing fee of four hundred dollars; with each initial appli-
   17  cation  for  a  license   filed   pursuant   to   section   sixty-three,
   18  SIXTY-THREE-B, sixty-four, sixty-four-a or sixty-four-b of this chapter,
   19  a filing fee of two hundred dollars; with each initial application for a
   20  license filed pursuant to section fifty-three-a, fifty-four, fifty-five,
   21  fifty-five-a,  seventy-nine, eighty-one or eighty-one-a of this chapter,
   22  a filing fee of one hundred dollars; with each initial application for a
   23  permit filed pursuant to section ninety-one,  ninety-one-a,  ninety-two,
   24  ninety-two-a,  ninety-three,  ninety-three-a,  if  such  permit is to be
   25  issued on a calendar year basis, ninety-four, ninety-five, ninety-six or
   26  ninety-six-a, or pursuant to paragraph b, c, e or j of  subdivision  one
   27  of  section ninety-nine-b of this chapter if such permit is to be issued
   28  on a calendar year basis, or for an additional bar pursuant to  subdivi-
   29  sion four of section one hundred of this chapter, a filing fee of twenty
   30  dollars;  and  with  each application for a permit under section ninety-
   31  three-a of this chapter, other than a permit to be issued on a  calendar
   32  year  basis, section ninety-seven, ninety-eight, ninety-nine, or ninety-
   33  nine-b of this chapter, other than a permit to  be  issued  pursuant  to
   34  paragraph  b,  c,  e or j of subdivision one of section ninety-nine-b of
   35  this chapter on a calendar year basis, a filing fee of ten dollars.
   36    2. In addition to the annual fees provided for in this chapter,  there
   37  shall  be  paid  to  the  authority  with each renewal application for a
   38  license filed pursuant to section fifty-one,  fifty-one-a,  fifty-three,
   39  fifty-eight,  sixty-one, sixty-two, seventy-six or seventy-eight of this
   40  chapter, a filing fee of one hundred dollars; with each renewal applica-
   41  tion for a license filed pursuant to section sixty-three, SIXTY-THREE-B,
   42  sixty-four, sixty-four-a or sixty-four-b of this chapter, a  filing  fee
   43  of  ninety  dollars;  with  each renewal application for a license filed
   44  pursuant to section seventy-nine, eighty-one  or  eighty-one-a  of  this
   45  chapter,  a  filing  fee  of  twenty-five dollars; and with each renewal
   46  application for a license or permit filed  pursuant  to  section  fifty-
   47  three-a, fifty-four, fifty-five, fifty-five-a, ninety-one, ninety-one-a,
   48  ninety-two,  ninety-two-a,  ninety-three, ninety-three-a, if such permit
   49  is issued on a calendar year basis, ninety-four, ninety-five, ninety-six
   50  or ninety-six-a of this chapter or pursuant to subdivisions b, c, e or j
   51  of section ninety-nine-b, if such permit is issued on  a  calendar  year
   52  basis,  or  with each renewal application for an additional bar pursuant
   53  to subdivision four of section one hundred of this chapter, a filing fee
   54  of thirty dollars.
       S. 2609                            52                            A. 3009
    1    S 9. Paragraph (a) of subdivision 1 of section 101  of  the  alcoholic
    2  beverage  control  law, as amended by chapter 22 of the laws of 2011, is
    3  amended to read as follows:
    4    (a)  Be  interested  directly  or indirectly in any premises where any
    5  alcoholic beverage is sold at retail; or in any business devoted  wholly
    6  or  partially  to  the sale of any alcoholic beverage at retail by stock
    7  ownership, interlocking directors, mortgage or lien or any  personal  or
    8  real  property,  or by any other means. The provisions of this paragraph
    9  shall not apply to:
   10    (i) any such premises or business constituting the  overnight  lodging
   11  and  resort facility located wholly within the boundaries of the town of
   12  North Elba, county of Essex, township eleven,  Richard's  survey,  great
   13  lot  numbers  two  hundred  seventy-eight, two hundred seventy-nine, two
   14  hundred eighty, two hundred ninety-eight, two hundred ninety-nine, three
   15  hundred, three hundred eighteen, three hundred nineteen,  three  hundred
   16  twenty,  three  hundred  thirty-five  and  three hundred thirty-six, and
   17  township twelve, Thorn's survey, great lot numbers one hundred  six  and
   18  one  hundred  thirteen,  as shown on the Adirondack map, compiled by the
   19  conservation department of the state of  New  York  -  nineteen  hundred
   20  sixty-four  edition,  in  the Essex county atlas at page twenty-seven in
   21  the Essex county clerk's office, Elizabethtown, New York, provided  that
   22  such facility maintains not less than two hundred fifty rooms and suites
   23  for overnight lodging[,];
   24    (ii)  any such premises or business constituting the overnight lodging
   25  and resort facility located wholly within the boundaries of  that  tract
   26  or parcel of land situate in the city of Canandaigua, county of Ontario,
   27  beginning  at a point in the northerly line of village lot nine where it
   28  meets with South Main Street, thence south sixty-nine degrees fifty-four
   29  minutes west  a  distance  of  nine  hundred  sixteen  and  twenty-three
   30  hundredths  feet to an iron pin; thence in the same course a distance of
   31  fourteen feet to an iron pin; thence in the same course  a  distance  of
   32  fourteen  and  four-tenths feet to a point; thence south fifteen degrees
   33  thirty-eight minutes and forty seconds east a distance of  four  hundred
   34  forty-six  and  eighty-seven  hundredths  feet  to a point; thence south
   35  twenty-eight degrees thirty-seven  minutes  and  fifty  seconds  east  a
   36  distance  of  one  hundred thirteen and eighty-four hundredths feet to a
   37  point; thence south eighty-five degrees and forty-seven minutes  east  a
   38  distance  of  forty-seven  and sixty-one hundredths feet to an iron pin;
   39  thence on the same course a distance of  three  hundred  and  sixty-five
   40  feet  to  an iron pin; thence north seventeen degrees twenty-one minutes
   41  and ten seconds east a distance of four hundred fifty-seven and  thirty-
   42  two  hundredths  feet  to an iron pin; thence north nineteen degrees and
   43  thirty minutes west a distance of two hundred and forty-eight feet to  a
   44  point;  thence  north  sixty-nine  degrees and fifty-four minutes east a
   45  distance of two hundred eighty-four and twenty-six hundredths feet to  a
   46  point;  thence north nineteen degrees and thirty minutes west a distance
   47  of sixty feet to the point and place of beginning,  provided  that  such
   48  facility maintains not less than one hundred twenty rooms and suites for
   49  overnight lodging[,];
   50    (iii) any such premises or business constituting the overnight lodging
   51  facility located wholly within the boundaries of that tract or parcel of
   52  land  situated in the borough of Manhattan, city and county of New York,
   53  beginning at a point on the northerly side of west  fifty-fourth  street
   54  at  a  point one hundred feet easterly from the intersection of the said
   55  northerly side of west fifty-fourth street  and  the  easterly  side  of
   56  seventh  avenue; running thence northerly and parallel with the easterly
       S. 2609                            53                            A. 3009
    1  side of seventh avenue one hundred feet five inches to the  center  line
    2  of  the  block;  running thence easterly and parallel with the northerly
    3  side of west fifty-fourth street and along the center line of the  block
    4  fifty  feet  to  a point; running thence northerly and parallel with the
    5  easterly side of seventh avenue one hundred  feet  five  inches  to  the
    6  southerly side of west fifty-fifth street at a point distant one hundred
    7  fifty  feet easterly from the intersection of the said southerly side of
    8  west fifty-fifth street and the easterly side of seventh avenue; running
    9  thence easterly along the southerly  side  of  west  fifty-fifth  street
   10  thirty-one  feet  three  inches to a point; running thence southerly and
   11  parallel with the easterly side of the seventh avenue one  hundred  feet
   12  five  inches  to  the  center line of the block; running thence easterly
   13  along the center line of the block and parallel with the southerly  side
   14  of  west  fifty-fifth street, one hundred feet; running thence northerly
   15  and parallel with the easterly side of seventh avenue one  hundred  feet
   16  five  inches  to  the southerly side of west fifty-fifth street; running
   17  thence easterly along the southerly  side  of  west  fifty-fifth  street
   18  twenty-one  feet  ten  and  one-half  inches  to a point; running thence
   19  southerly and parallel with the easterly  side  of  seventh  avenue  one
   20  hundred feet five inches to the center line of the block; running thence
   21  westerly along the center line of the block and parallel with the north-
   22  erly  side of west fifty-fourth street three feet one and one-half inch-
   23  es; running thence southerly and parallel  with  the  easterly  side  of
   24  seventh  avenue  one  hundred  feet five inches to the northerly side of
   25  west fifty-fourth street at a point distant three hundred feet  easterly
   26  from  the  intersection  of the said northerly side of west fifty-fourth
   27  street and the easterly side of seventh avenue; running thence  westerly
   28  and  along  the  northerly  side of west fifty-fourth street two hundred
   29  feet to the point or place of beginning,  provided  that  such  facility
   30  maintains  not  less  than four hundred guest rooms and suites for over-
   31  night lodging[,];
   32    (iv) any such premises or business located on that tract or parcel  of
   33  land, or any subdivision thereof, situate in the Village of Lake Placid,
   34  Town  of North Elba, Essex County, New York; it being also a part of Lot
   35  No.  279, Township No. 11, Old  Military  Tract,  Richard's  Survey;  it
   36  being  also all of Lot No. 23 and part of Lot No. 22 as shown and desig-
   37  nated on a certain map entitled "Map of Building Sites for Sale by  B.R.
   38  Brewster"  made by G.T. Chellis C.E. in 1892; also being PARCEL No. 1 on
   39  a certain map of lands of Robert  J.  Mahoney  and  wife  made  by  G.C.
   40  Sylvester, P.E.  & L.S.  # 21300, dated August 4, 1964, and filed in the
   41  Essex  County  Clerk's  Office on August 27, 1964, and more particularly
   42  bounded and described as follows; BEGINNING at the intersection  of  the
   43  northerly  bounds  of  Shore  Drive  (formerly  Mirror  Street) with the
   44  westerly bounds of Park Place (formerly Rider  Street)  which  point  is
   45  also  the  northeast corner of Lot No. 23, from thence South 21 50' East
   46  in the westerly bounds of Park Place a distance of  119  feet,  more  or
   47  less,  to  a lead plug in the edge of the sidewalk marking the southeast
   48  corner of Lot No. 23 and the northeast corner of Lot No. 24; from thence
   49  South 68 00'50" West a distance of 50.05 feet to an  iron  pipe  set  in
   50  concrete  at  the  corner of Lots 23 and 22; from thence South 65 10'50"
   51  West a distance of 7.94 feet along the south line of Lot No.  22  to  an
   52  iron  pipe  for  a corner; from thence North 23 21'40" West and at 17.84
   53  feet along said line passing over a drill hole in a  concrete  sidewalk,
   54  and  at  68.04 feet further along said line passing over an iron pipe at
   55  the southerly edge of another sidewalk, and at 1.22 feet  further  along
   56  said  line  passing  over  another  drill  hole  in  a sidewalk, a total
       S. 2609                            54                            A. 3009
    1  distance of 119 feet, more or less, to the northerly line  of  Lot.  No.
    2  22;  from  thence easterly in the northerly line of Lot 22 and 23 to the
    3  northeast corner of Lot No. 23 and the point of beginning. Also  includ-
    4  ing the lands to the center of Shore Drive included between the norther-
    5  ly  straight  line continuation of the side lines of the above described
    6  parcel, and to the center of Park  Place,  where  they  abut  the  above
    7  described premises SUBJECT to the use thereof for street purposes. Being
    8  the  same  premises  conveyed  by Morestuff, Inc. to Madeline Sellers by
    9  deed dated June 30, 1992, recorded in the Essex County Clerk's Office on
   10  July 10, 1992 in Book 1017 of Deeds at Page 318;
   11    (v) any such premises or business located on  that  certain  piece  or
   12  parcel  of land, or any subdivision thereof, situate, lying and being in
   13  the Town of Plattsburgh, County of Clinton, State of New York and  being
   14  more  particularly bounded and described as follows: Starting at an iron
   15  pipe found in the easterly bounds of the highway known as the Old  Mili-
   16  tary  Turnpike,  said iron pipe being located 910.39 feet southeasterly,
   17  as measured along the easterly bounds of said highway, from the souther-
   18  ly bounds of the  roadway  known  as  Industrial  Parkway  West,  THENCE
   19  running  S 31   54' 33" E along the easterly bounds of said Old Military
   20  Turnpike Extension, 239.88 feet to a point marking the  beginning  of  a
   21  curve  concave  to the west; thence southerly along said curve, having a
   22  radius of 987.99 feet, 248.12 feet to an iron  pipe  found  marking  the
   23  point  of  beginning  for  the parcel herein being described, said point
   24  also marked the southerly corner of lands of Larry  Garrow,  et  al,  as
   25  described  in Book 938 of Deeds at page 224; thence N 07  45' 4" E along
   26  the easterly bounds of said Garrow, 748.16  feet  to  a  3"x4"  concrete
   27  monument  marking the northeasterly corner of said Garrow, the northwes-
   28  terly corner of the parcel herein being described and said monument also
   29  marking the southerly bounds  of  lands  of  Salerno  Plastic  Corp.  as
   30  described in Book 926 of Deeds at Page 186; thence S 81  45' 28" E along
   31  a  portion of the southerly bounds of said Salerno Plastic Corp., 441.32
   32  feet to an iron pin found marking the northeasterly corner of the parcel
   33  herein being described and also marking  the  northwest  corner  of  the
   34  remaining lands now or formerly owned by said Marx and Delaura; thence S
   35  07  45' 40" W along the Westerly bounds of lands now of formerly of said
   36  Marx  and  DeLaura  and  along  the easterly bounds of the parcel herein
   37  being described, 560.49 feet to an iron pin; thence  N  83   43'  21"  W
   38  along  a  portion of the remaining lands of said Marx and DeLaura, 41.51
   39  feet to an iron pin; thence S 08  31' 30" W,  along  a  portion  of  the
   40  remaining  lands  of  said  Marx  and Delaura, 75.01 feet to an iron pin
   41  marking northeasterly corner of lands currently owned by the Joint Coun-
   42  cil for Economic Opportunity of Plattsburgh and Clinton County, Inc.  as
   43  described in Book 963 of Deeds at Page 313; thence N 82  20' 32" W along
   44  a  portion  of  the northerly bounds of said J.C.E.O., 173.50 feet to an
   45  iron pin; thence 61  21' 12" W, continuing along a portion of the north-
   46  erly bounds of said J.C.E.O., 134.14 feet to an iron pin; thence  S  07
   47  45' 42" W along the westerly bounds of said J.C.E.O., 50 feet to an iron
   48  pin;  thence  S 66  48' 56" W along a portion of the northerly bounds of
   49  remaining lands of said Marx and DeLaura, 100.00 feet to  an  iron  pipe
   50  found  on  the  easterly bounds of the aforesaid highway, said from pipe
   51  also being located on a curve concave to the west;  thence  running  and
   52  running northerly along the easterly bounds of the aforesaid highway and
   53  being  along  said curve, with the curve having a radius of 987.93 feet,
   54  60.00 feet to the point of beginning and containing 6.905 acres of land.
   55  Being the same premises as conveyed to Ronald Marx  and  Alice  Marx  by
   56  deed of CIT Small Business Lending Corp., as agent of the administrator,
       S. 2609                            55                            A. 3009
    1  U.S.  Small  Business  Administration,  an  agency  of the United States
    2  Government dated September 10, 2001 and recorded in the  office  of  the
    3  Clinton County Clerk on September 21, 2001 as Instrument #135020; [or]
    4    (vi)  any  such  premises  or business located on the west side of New
    5  York state route 414 in military lots 64 and 75  located  wholly  within
    6  the  boundaries  of that tract or parcel of land situated in the town of
    7  Lodi, county of Seneca beginning at an iron pin on the assumed west line
    8  of New York State Route 414 on the apparent north line of lands reputed-
    9  ly of White (lib. 420, page 155); said iron pin also being  northerly  a
   10  distance  of  1200 feet more or less from the centerline of South Miller
   11  Road; Thence leaving the point of beginning north 85-17'-44" west  along
   12  said  lands  of  White  a distance of 2915.90 feet to an iron pin Thence
   13  north 03-52'-48" east along said lands of White, passing through an iron
   14  pin 338.36 feet distant, and continuing further along that same course a
   15  distance of 13.64 feet farther, the total distance being 352.00 feet  to
   16  a point in the assumed centerline of Nellie Neal Creek; Thence in gener-
   17  ally  a  north  westerly  direction  the following courses and distances
   18  along the assumed centerline of Nellie Neal Creek; north 69-25'-11" west
   19  a distance of 189.56 feet to a point; north 63-40'-00" west  a  distance
   20  of  156.00  feet  to  a point; north 49-25'-00" west a distance of 80.00
   21  feet to a point; south 80-21'-00" west a distance of  90.00  feet  to  a
   22  point; north 72-03'-00" west a distance of 566.00 feet to a point; north
   23  68-15'-00"  west  a distance of 506.00 feet to a point; north 55-16'-00"
   24  west a distance of 135.00 feet to  a  point;  south  69-18'-00"  west  a
   25  distance  of 200.00 feet to a point; south 88-00'-00" west a distance of
   26  170.00 feet to a point on a tie line at or near the high water  line  of
   27  Seneca Lake; Thence north 25-17'-00" east along said tie line a distance
   28  of 238.00 feet to an iron pipe; Thence south 82-04'-15" east along lands
   29  reputedly of M. Wagner (lib. 464, page 133) a distance of 100.00 feet to
   30  an  iron pin; Thence north 06-56'-47" east along said lands of M. Wagner
   31  a distance of 100.00 feet to an iron pipe; Thence north 09-34'-28"  east
   32  along  lands  reputedly  of  Schneider (lib. 429, page 37) a distance of
   33  50.10 feet to an iron pipe; Thence north  07-49'-11"  east  along  lands
   34  reputedly  of  Oney  (lib.  484, page 24) a distance of 50.00 feet to an
   35  iron pipe; Thence north 82-29'-40" west  along  said  lands  of  Oney  a
   36  distance  of  95.30  feet  to  an iron pipe on a tie line at or near the
   37  highwater line of Seneca Lake; Thence north 08-15'-22" east  along  said
   38  tie  line  a  distance  of  25.00  feet  to  an  iron  pin; Thence south
   39  82-28'-00" east along lands reputedly of  Yu  (lib.  405,  page  420)  a
   40  distance  of  96.53  feet  to an iron pipe; Thence north 34-36'-59" east
   41  along said lands of Yu a distance of  95.00  feet  to  a  point  in  the
   42  assumed  centerline  of  Van Liew Creek; Thence in generally an easterly
   43  direction the following courses and distances along the assumed  center-
   44  line  of Van Liew Creek; north 72-46'-37" east a distance of 159.98 feet
   45  to a point; north 87-53'-00" east a distance of 94.00 feet to  a  point;
   46  south  71-12'-00"  east  a  distance  of  52.00  feet  to a point; south
   47  84-10'-00" east a distance of 158.00 feet to a point;  south  59-51'-00"
   48  east  a  distance  of  160.00  feet  to a point; south 83-29'-00" east a
   49  distance of 187.00 feet to a point; Thence north 01-33'-40"  east  along
   50  lands  reputedly  of Hansen (lib. 515, page 205) passing through an iron
   51  pipe 32.62 feet distant, and continuing further along that  same  course
   52  passing  through  an  iron pin 205.38 feet farther, and continuing still
   53  further along that same course a distance of  21.45  feet  farther,  the
   54  total  distance  being 259.45 feet to the assumed remains of a White Oak
   55  stump; Thence north 69-16'-11" east along lands  reputedly  of  Schwartz
   56  (lib.  374, page 733) being tie lines along the top of the south bank of
       S. 2609                            56                            A. 3009
    1  Campbell Creek a distance of  338.00  feet  to  a  point;  Thence  south
    2  57-17'32" east along said tie line a distance of 136.60 feet to a point;
    3  Thence  south  74-45'-00"  east along said tie line a distance of 100.00
    4  feet  to  an  iron pin; Thence north 04-46'-00" east along said lands of
    5  Schwartz a distance of 100.00 feet to a point in the assumed  centerline
    6  of Campbell Creek; Thence in generally an easterly direction the follow-
    7  ing  courses  and  distances  along  the  assumed centerline of Campbell
    8  Creek; south 71-34'-00" east a distance of 330.00 feet to a point; north
    9  76-53'-00" east a distance of 180.00 feet to a  point;  north  83-05'00"
   10  east  a  distance  of  230.00  feet  to a point; south 66-44'-00" east a
   11  distance of 90.00 feet to a point; south 81-10'-00" east a  distance  of
   12  240.00  feet  to a point; south 45-29'-15" east a distance of 73.18 feet
   13  to a point; Thence south 05-25'-50" west along lands reputedly of  Stan-
   14  ley  Wagner (lib. 450, page 276) a distance of 135.00 feet to a point on
   15  the assumed north line of Military Lot 75; Thence south 84-34'-10"  east
   16  along said lands of Wagner and the assumed north line of Military Lot 75
   17  a  distance  of 1195.06 feet to an iron pin; Thence south O6-57'52" west
   18  along said lands of M. Wagner (lib. 414, page 267)  passing  through  an
   19  iron  pin  215.58  feet  distant, and continuing further along that same
   20  course a distance of 20.59 feet farther, the total distance being 236.17
   21  feet to a point in the assumed centerline of Campbell Creek;  Thence  in
   22  generally  a south easterly direction the following course and distances
   23  along the assumed centerline of Campbell Creek; north 78-23'-09" east  a
   24  distance  of  29.99 feet to a point; south 46-09'-15" east a distance of
   25  65.24 feet to a point; north 85-55'-09" east a distance of 60.10 feet to
   26  a point; south 61-59'-50" east a distance of 206.91  feet  to  a  point;
   27  north  63-58'-27"  east  a  distance  of  43.12  feet  to a point; south
   28  28-51'-21" east a distance of 47.72 feet to a  point;  south  15-14'-08"
   29  west  a  distance  of  33.42  feet  to  a point; south 79-16'-32" east a
   30  distance of 255.15 feet to a point; south 62-19'-46" east a distance  of
   31  75.82 feet to a point; north 76-10'-42" east a distance of 99.60 feet to
   32  a point; north 82-12'55" east a distance of 86.00 feet to a point; south
   33  44-13'53"  east  a  distance  of 64.08 feet to a point; north 67-52'-46"
   34  east a distance of 73.98 feet  to  a  point;  north  88-13'-13"  east  a
   35  distance  of  34.64 feet to a point on the assumed west line of New York
   36  State Route 414; Thence south 20-13'-30" east  along  the  assumed  west
   37  line of New York State Route 414 a distance of 248.04 feet to a concrete
   38  monument;  Thence  south 02-10'-30" west along said road line a distance
   39  of 322.90 feet to an iron pin; Thence 13-14'-50" west  along  said  road
   40  line  a  distance of 487.41 feet to an iron pin, said iron pin being the
   41  point and place of beginning; Comprising an area  of  126.807  acres  of
   42  land  according  to  a  survey  completed by Michael D. Karlsen entitled
   43  "Plan Owned by Stanley A.   Wagner" known as  Parcel  A  of  Job  number
   44  98-505.    This survey is subject to all utility easements and easements
   45  and right-of-ways of record which may affect the parcel of land.    This
   46  survey is also subject to the rights of the public in and to lands here-
   47  in  referred  to  as  New York State Route 414.   This survey intends to
   48  describe a portion of the premises as conveyed  by  Ruth  V.  Wagner  to
   49  Stanley  A.  Wagner  by  deed recorded February 10, 1989 in Liber 450 of
   50  deeds, at Page 286.  This survey also intends to describe a  portion  of
   51  the  premises as conveyed by Stanley W. VanVleet to Stanley A. Wagner by
   52  deed recorded April 30, 1980 in Liber 385 of Deeds, at Page 203.
   53   ALSO ALL THAT OTHER TRACT OR PARCEL OF LAND SITUATE on the east side of
   54  New York State Route 414 in Military Lot 75 in the Town of Lodi,  County
   55  of  Seneca,  State of New York bounded and described as follows:  Begin-
   56  ning at an iron pin on the assumed east line of  New  York  State  Route
       S. 2609                            57                            A. 3009
    1  414, said iron pin being north 50-44'-57" east a distance of 274.92 feet
    2  from the south east corner of the parcel of land herein above described;
    3  Thence leaving the point of beginning north 00-26'01" east along a math-
    4  ematical tie line a distance of 504.91 feet to an iron pin; Thence south
    5  37-00'-20" east along lands reputedly of Tomberelli (lib. 419, page 243)
    6  passing  through an iron pin 176.00 feet distant, and continuing further
    7  along that same course a  distance  of  2.01  feet  farther,  the  total
    8  distance  being  178.01  feet  to  a point; Thence south 09-03'-55" west
    9  along lands reputedly of M. Wagner (lib. 491, page 181)  a  distance  of
   10  68.19  feet  to  an  iron  pipe; Thence south 15-36'-04" west along said
   11  lands of M. Wagner a distance of 300.15 feet to  an  iron  pipe;  Thence
   12  south  72-04'-59" west along said lands of M. Wagner a distance of 20.49
   13  feet to an iron pin, said iron pin being the point and place  of  begin-
   14  ning.    Comprising an area of 0.727 acre of lands according to a survey
   15  completed by Michael D. Karlsen entitled "Plan of Land Owned by  Stanley
   16  A.  Wagner"  known  as  Parcel  B of job number 98-505.   This survey is
   17  subject to all utility easements  and  easements  and  right-of-ways  of
   18  record  which  may  affect  this  parcel  of land.   This survey is also
   19  subject to the rights of the public in and to lands herein  referred  to
   20  as  New  York State Route 414.  This survey intends to describe the same
   21  premises as conveyed by Henry W. Eighmey as executor of  the  Last  Will
   22  and  Testament  of Mary C. Eighmey to Stanley A. Wagner by deed recorded
   23  July 2, 1996 in liber 542,  page  92.    This  survey  also  intends  to
   24  describe  a  portion  of  the  premises as conveyed by Ruth V. Wagner to
   25  Stanley A. Wagner by deed recorded February 10, 1989  in  Liber  450  of
   26  deeds, at Page 286[.];
   27    [The  provisions of this paragraph shall not apply to] (VII) any prem-
   28  ises or business located wholly within the following  described  parcel:
   29  ALL  THAT TRACT OR PARCEL OF LAND situate in the City of Corning, County
   30  of Steuben and State of New  York  bounded  and  described  as  follows:
   31  Beginning at an iron pin situate at the terminus of the westerly line of
   32  Townley  Avenue  at  its intersection with the southwesterly line of New
   33  York State Route 17; thence S 00  45' 18" E along the westerly  line  of
   34  Townley  Avenue,  a distance of 256.09 feet to a point; thence S 89  02'
   35  07" W through an iron pin placed at a distance of 200.00 feet,  a  total
   36  distance  of  300.00  feet  to  an  iron  pin;  thence N 00  59' 17" W a
   37  distance of 47.13 feet to an iron pin; thence S 89  02' 07" W a distance
   38  of 114.56 feet to a point situate in the southeast corner of Parcel  A-2
   39  as set forth on a survey map hereinafter described; thence N 14  18' 49"
   40  E  a  distance  of  124.40  feet to an iron pin situate at the southeast
   41  corner of lands now or formerly of Cicci (Liber 923, Page 771); thence N
   42  14  18' 49" E a distance of 76.46 feet to an iron pin; thence N 00   57'
   43  53"  W  a  distance  of  26.25 feet to an iron pin marking the southeast
   44  corner of parcel A-1 as set forth on the  hereinafter  described  survey
   45  map;  thence N 00  58' 01" W a distance of 166.00 to an iron pin situate
   46  at the northeast corner of said Parcel A-1, which  pin  also  marks  the
   47  southeast  corner  of lands now or formerly of Becraft (Liber 1048, Page
   48  1086); thence N 00  57' 53" W a distance of 106.00 feet to an  iron  pin
   49  situate  in  the  southerly  line of lands now or formerly of the United
   50  States Postal Service; thence N 89  02' 07" E along the  southerly  line
   51  of  said  United  States  Postal  Service  a distance of 81.47 feet to a
   52  point; thence N 14  18' 49" E along the easterly  line  of  said  United
   53  States  Postal  Service a distance of 114.29 feet to an iron pin situate
   54  in the southwesterly line of New York State Route 17; thence S  32   00'
   55  31"  E  along  the  southwesterly  line  of  New  York State Route 17, a
   56  distance of 358.93 feet to an iron  pin;  thence  continuing  along  the
       S. 2609                            58                            A. 3009
    1  southwesterly  line  of  New  York  state  Route  17,  S 38  30' 04" E a
    2  distance of 108.18 feet to the iron pin marking the place of  beginning.
    3  Said  premises  are  set forth and shown as approximately 4.026 acres of
    4  land  designated as Parcel A (excluding Parcels A-1 and A-2) on a survey
    5  map entitled "As-Built Survey of Lands of New York  Inn,  LLC,  City  of
    6  Corning,  Steuben County, New York" by Weiler Associates, dated December
    7  27, 2001, designated Job No. 12462; [or (vii)]
    8    (VIII) any such premises or businesses located on that  certain  plot,
    9  piece  or parcel of land, situate, lying and being in the Second Ward of
   10  the City of Schenectady, on the Northerly side of Union Street,  bounded
   11  and  described as follows: to wit; Beginning at the Southeasterly corner
   12  of the lands lately owned by Elisha L. Freeman and now by Albert  Shear;
   13  and running from thence Easterly along the line of Union Street, 44 feet
   14  to  the  lands  now owned by or in the possession of James G. Van Vorst;
   15  thence Northerly in a straight line along the last mentioned  lands  and
   16  the lands of the late John Lake, 102 feet to the lands of one Miss Rodg-
   17  ers;  thence Westerly along the line of the last mentioned lands of said
   18  Rodgers to the lands of the said Shear; and thence Southerly  along  the
   19  lands  of  said  Shear  101 feet, 6 inches to Union Street, the place of
   20  beginning.
   21    Also all that tract or parcel of land,  with  the  buildings  thereon,
   22  situate  in the City of Schenectady, County of Schenectady, and State of
   23  New York, situate in the First, formerly the Second  Ward  of  the  said
   24  City,  on  the  Northerly  side  of  Union Street, which was conveyed by
   25  William Meeker and wife to Elisha L. Freeman by deed  dated  the  second
   26  day  of December 1843, and recorded in the Clerk's Office of Schenectady
   27  County on December 5, 1843, in Book V of Deeds at page 392, which lot in
   28  said deed is bounded and described as follows: Beginning at a  point  in
   29  the  Northerly line of Union Street where it is intersected by the East-
   30  erly line of  property  numbered  235  Union  Street,  which  is  hereby
   31  conveyed,  and  running thence Northerly along the Easterly line of said
   32  property, One Hundred Forty and Five-tenths  (140.5)  feet  to  a  point
   33  sixteen  (16)  feet  Southerly from the Southerly line of the new garage
   34  built upon land adjoining on the North; thence  Westerly  parallel  with
   35  said  garage,  Forty-six  and Seven-tenths (46.7) feet; thence Southerly
   36  One Hundred Forty and Eight-tenths (140.8) feet to the Northerly  margin
   37  of  Union  Street;  thence  Easterly along the Northerly margin of Union
   38  Street, about Forty-eight and three-tenths (48.3) feet to the  point  or
   39  place of beginning.  The two above parcels are together more particular-
   40  ly  described  as follows:  All that parcel of land in the City of Sche-
   41  nectady beginning at a point in the northerly margin of Union Street  at
   42  the southwesterly corner of lands now or formerly of Friedman (Deed Book
   43  636  at  page 423) which point is about 60 feet westerly of the westerly
   44  line of North College Street and runs thence N. 86 deg. 42' 20" W. 92.30
   45  feet to the southeasterly corner of  other  lands  now  or  formerly  of
   46  Friedman  (Deed  Book  798  at  page  498); thence N. 04 deg. 06' 48" E.
   47  140.50 feet to the southwesterly corner of  lands  now  or  formerly  of
   48  Stockade  Associates (Deed Book 1038 at page 521); thence S. 87 deg. 05'
   49  27" E. 46.70 feet to lands now or formerly of McCarthy (Deed  Book  1129
   50  at  page  281); thence along McCarthy S. 00 deg. 52' 02" E. 3.69 feet to
   51  the northwesterly corner of lands now or formerly of SONYMA  (Deed  Book
   52  1502  at  page  621);  thence  along  lands  of SONYMA S. 02 deg 24' 56"
   53  W.34.75 feet to a corner; thence still along lands of SONYMA  and  lands
   54  now  or formerly of Magee (Deed Book 399 at page 165) S. 86 deg. 11' 52"
   55  E. 42.57 feet to a corner; thence still along lands of Magee  and  Lands
   56  of  Friedman  first above mentioned S. 03 deg. 10' 08" W. 102.00 feet to
       S. 2609                            59                            A. 3009
    1  the point of beginning.  Excepting and reserving all that portion of the
    2  above parcel lying easterly of a line described as follows:    All  that
    3  tract  or parcel of land, situated in the City of Schenectady and County
    4  of  Schenectady  and  State  of New York, on the Northerly side of Union
    5  Street bounded and described as follows:  Beginning at a  point  in  the
    6  northerly  line  of  Union Street, said point being in the division line
    7  between lands now or formerly of Electric Brew Pubs, Inc. (1506 of Deeds
    8  at page 763) on the West and lands now or formerly  of  Margaret  Wexler
    9  and  Donna Lee Wexler Pavlovic, as trustees under Will of Ruth F. Wexler
   10  (Street number 241 Union Street) on the East; thence North 03  deg.  04'
   11  10"  East,  along  the  building known as Street No. 241 Union Street, a
   12  distance of 30.50 feet to a point; thence North 88 deg.  45'  45"  West,
   13  along  said  building  and  building  eve,  a distance of 5.62 feet to a
   14  point; thence North 03 deg. 03' 30" East, along  said  building  eve  of
   15  Street  No.  241 Union Street, a distance of 32.74 feet; thence South 88
   16  deg. 45' 45" East, along said building eve, a distance of 1.2 feet to an
   17  intersection of building corner of Street No. 241  Union  Street  and  a
   18  brick  wall; thence north 03 deg. 37' 30" East, along said brick wall, a
   19  distance of 14.47 feet to a point in  the  corner  of  the  brick  wall,
   20  thence  South  86  deg. 46' 45" East along said brick wall a distance of
   21  4.42 feet to the intersection of  brick  wall  with  the  boundary  line
   22  between  the  Electric Brew Pubs, Inc. (aforesaid) on the West and lands
   23  of Margaret Wexler and Donna Lee Wexler  Pavlovic,  (aforesaid)  on  the
   24  East;  thence  North  03 deg 10' 08" East a distance of 0.62 feet to the
   25  Northeast corner of lands belonging to Margaret  Wexler  and  Donna  Lee
   26  Wexler  Pavlovic.   Also all that tract or parcel of land commonly known
   27  as the Union Street School, located on the Northeasterly corner of Union
   28  and North College Streets in the First Ward of the City  and  County  of
   29  Schenectady  and  State  of  New  York,  more  particularly  bounded and
   30  described as follows:  Beginning at a point in the Northerly street line
   31  of Union Street where it is intersected by the Easterly street  line  of
   32  North  College  Street,  and  runs  thence  Northerly along the Easterly
   33  street line of North College Street, one hundred seven  and  five-tenths
   34  (107.5)  feet  to  a  point,  thence easterly at an angle of ninety (90)
   35  degrees, one hundred ninety-one  and  seventy-five  hundredths  (191.75)
   36  feet  to  a  point  in  the  Northwesterly street line of Erie Boulevard
   37  thence southwesterly along the Northwesterly street line of Erie  Boule-
   38  vard,  one  hundred  twenty-three  and  eight-tenths (123.8) feet to its
   39  intersection with the Northerly street  line  of  Union  Street;  thence
   40  Westerly  along  the  Northerly street line of Union Street, one hundred
   41  twenty-four and fifty-five hundredths (124.55)  feet  to  the  point  or
   42  place of beginning.
   43    The  above  described parcel of property includes the Blue Line parcel
   44  of land, which is a portion of the abandoned Erie Canal  Lands,  located
   45  in  the  First Ward of the City of Schenectady, New York, and which Blue
   46  Line parcel lies between the Northwesterly line of Erie Boulevard as set
   47  forth in the above described premises and the Northeasterly lot line  of
   48  the  old  Union Street School as it runs parallel with the Northwesterly
   49  line of Erie Boulevard as aforesaid.
   50    The two above parcels are  together  more  particularly  described  as
   51  follows: All that parcel of land in the City of Schenectady beginning at
   52  a  point  in  the northerly margin of Union Street and the northwesterly
   53  margin of Erie Boulevard and runs thence along Union Street N.  86  deg.
   54  42'  20"  W. 124.55 feet to the easterly margin of North College Street;
   55  thence along North College Street N. 05 deg 04' 40" E.  107.50  feet  to
   56  the southeasterly corner of lands now or formerly of McCarthy (Deed Book
       S. 2609                            60                            A. 3009
    1  1129 at page 279); thence along McCarthy, Cottage Alley and lands now or
    2  formerly  of  McGregor (Deed Book 912 at page 624) S. 84 deg. 55' 20" E.
    3  191.75 feet to the northwesterly margin of Erie Boulevard; thence  along
    4  Erie  Boulevard S. 38 deg. 03' 53" W. 123.54 feet to the point of begin-
    5  ning; [or (viii)]
    6    (IX) any such premises or businesses located on that tract  or  parcel
    7  of  land  situate  in the Town of Hopewell, Ontario County, State of New
    8  York, bounded and described as follows: Commencing at a 5/8" rebar found
    9  on the division line between lands now or formerly of Ontario  County  -
   10  Finger  Lakes  Community  College  (Liber 698 of Deeds, Page 466) on the
   11  north and lands now or formerly of James W. Baird (Liber 768  of  Deeds,
   12  Page  1109)  on the south; thence, North 43 -33'-40" West, on said divi-
   13  sion line, a distance of 77.32 feet to the Point of  Beginning.  Thence,
   14  North  43 -33'-40"  West,  continuing  on said division line and through
   15  said lands of Ontario County, a distance of 520.45 feet to  a  point  on
   16  the  southeasterly  edge  of  an  existing  concrete  pad; thence, South
   17  74 -19'-53" West, along said edge of concrete and the projection  there-
   18  of,  a  distance of 198.78 feet to a point on the easterly edge of pave-
   19  ment of an existing campus drive; thence, the following two (2)  courses
   20  and  distances  along said edge of pavement: Northeasterly on a curve to
   21  the left having a radius of 2221.65  feet,  a  chord  bearing  of  North
   22  30 -16'-39"  East,  a  chord  distance  of  280.79,  a  central angle of
   23  07 -14'-47", a length of 280.98 feet to a point  of  reverse  curvature;
   24  thence,  Northeasterly on a curve to the right having a radius of 843.42
   25  feet, a chord bearing of North 45 -25'-09" East,  a  chord  distance  of
   26  534.08,  a  central  angle  of 36 -55'-01", a length of 543.43 feet to a
   27  point; thence, South 30 -04'-59" East, a distance of 18.28 feet  to  the
   28  corner  of  the property acquired by Ontario County (Liber 766 of Deeds,
   29  Page 1112), as shown on a map recorded in  the  Ontario  County  Clerk's
   30  Office  as  Map  No.  6313;  thence,  the following four (4) courses and
   31  distances along said property line: South 30 -04'-59" East,  a  distance
   32  of 177.17 feet to a point; thence, South 02 -20'-33" East, a distance of
   33  147.53  feet  to  a point; thence, South 41 -31'-35" East, a distance of
   34  200.93 feet to a point; thence, South 23 -48'-53" West, along said prop-
   35  erty line, and the projection thereof, through the first said  lands  of
   36  Ontario  County  -  Finger  Lakes Community College (Liber 698 of Deeds,
   37  Page 466), a distance of 517.96 feet to Point of Beginning. Said  parcel
   38  containing  7.834  acres,  more  or  less,  as  shown  on a map entitled
   39  "Proposed Lease Area - Friends  of  the  Finger  Lakes  Performing  Arts
   40  Center,  Hopewell,  NY", prepared by Bergmann Associates, drawing LM-01,
   41  dated June 10, 2005, last revised August 17, 2005. The related PAC Prop-
   42  erties are shown on the Map denominated  "FLCC  Campus  Property,  FLPAC
   43  Ground  Lease,  Parking, Vehicular & Pedestrian Access", recorded in the
   44  Ontario County Clerk's Office on December 10, 2009 in Book 1237 of Deeds
   45  at page 9 and are comprised of the areas separately labeled  as  Parking
   46  Lot  'A', Parking Lot 'G', the Ticket Booth area, the Sidewalks, and the
   47  Entry Roads[.];
   48    (X) ANY PREMISES LICENSED PURSUANT TO SECTION  SIXTY-THREE-B  OF  THIS
   49  CHAPTER.
   50    [The  provisions  of this paragraph shall not apply to] (XI) any prem-
   51  ises licensed under section  sixty-four  of  this  chapter  in  which  a
   52  manufacturer or wholesaler holds a direct or indirect interest, provided
   53  that:  [(I)]  (1)  said premises consist of an interactive entertainment
   54  facility which  predominantly  offers  interactive  computer  and  video
   55  entertainment  attractions,  and  other  games  and  also  offers themed
   56  merchandise and food and beverages, [(II)] (2)  the  sale  of  alcoholic
       S. 2609                            61                            A. 3009
    1  beverages  within the premises shall be restricted to an area consisting
    2  of not more than twenty-five percent of the total interior floor area of
    3  the premises, [(III)] (3) the retail licenses shall derive not less than
    4  sixty-five  percent  of the total revenue generated by the facility from
    5  interactive video entertainment activities and  other  games,  including
    6  related  attractions  and sales of merchandise other than food and alco-
    7  holic beverages, [(IV)] (4) the interested manufacturer  or  wholesaler,
    8  or its parent company, shall be listed on a national securities exchange
    9  and  its direct or indirect equity interest in the retail licensee shall
   10  not exceed twenty-five percent, [(V)] (5) no more than  fifteen  percent
   11  of  said  licensee's  purchases  of  alcoholic beverages for sale in the
   12  premises shall be products produced or distributed by  the  manufacturer
   13  or wholesaler, [(VI)] (6) neither the name of the manufacturer or whole-
   14  saler  nor  the  name  of  any  brand  of alcoholic beverage produced or
   15  distributed by said manufacturer or wholesaler shall be part of the name
   16  of the premises, [(VII)] (7) the name of the manufacturer or  wholesaler
   17  or  the  name  of  products  sold or distributed by such manufacturer or
   18  wholesaler shall not be identified on  signage  affixed  to  either  the
   19  interior  or  the  exterior of the premises in any fashion, [(VIII)] (8)
   20  promotions involving alcoholic beverages produced or distributed by  the
   21  manufacturer  or  wholesaler  are not held in such premises and further,
   22  retail and consumer advertising specialties  bearing  the  name  of  the
   23  manufacturer  or  wholesaler or the name of alcoholic beverages produced
   24  or distributed by the manufacturer or wholesaler are not utilized in any
   25  fashion, given away or sold in said premises, and [(IX)] (9)  except  to
   26  the  extent  provided  in this paragraph, the licensing of each premises
   27  covered by this exception  is  subject  to  all  provisions  of  section
   28  sixty-four of this chapter, including but not limited to liquor authori-
   29  ty approval of the specific location thereof.
   30    The provisions of this paragraph shall not prohibit (1) a manufacturer
   31  or  wholesaler, if an individual, or a partner, of a partnership, or, if
   32  a corporation, an officer or director thereof, from being an officer  or
   33  director  of a duly licensed charitable organization which is the holder
   34  of a license for on-premises consumption under this chapter, nor  (2)  a
   35  manufacturer  from  acquiring  any such premises if the liquor authority
   36  first consents thereto after determining, upon such proofs as  it  shall
   37  deem  sufficient, that such premises is contiguous to the licensed prem-
   38  ises of such manufacturer, and is reasonably necessary for the expansion
   39  of the facilities of such manufacturer. After any such  acquisition,  it
   40  shall  be illegal for a manufacturer acquiring any such premises to sell
   41  or deliver alcoholic beverages manufactured by him to any licensee occu-
   42  pying such premises.
   43    S 10. If any provision of this act or the  application  thereof  shall
   44  for  any reason be finally adjudged by a court of competent jurisdiction
   45  to be invalid or  unconstitutional,  such  judgment  shall  not  affect,
   46  impair, or invalidate the remainder of this act but shall be confined in
   47  its  operation  to  the provision or provisions directly involved in the
   48  controversy in which such judgment shall have been rendered. It is here-
   49  by declared to be the intent of the legislature that this act would have
   50  been enacted even if such invalid provision or provisions had  not  been
   51  included.    In the event that any provision of the laws of New York, as
   52  amended by this act, shall be finally adjudged by a court  of  competent
   53  jurisdiction  to  be invalid or unconstitutional, the provisions of such
   54  laws in effect prior to the date this act shall have  become  law  shall
   55  not be affected by such judgment.
       S. 2609                            62                            A. 3009
    1    S  11. This act shall take effect immediately; provided, however, that
    2  the sales tax exemptions created by sections three and four of this  act
    3  shall  take  effect on the first day of a sales tax quarterly period, as
    4  described in subdivision (b) of  section  1136  of  the  tax  law,  next
    5  commencing  at  least 30 days after this act shall have become a law and
    6  shall apply in accordance with the applicable transitional provisions in
    7  sections 1106 and 1217 of the tax law; and  provided  further  that  the
    8  amendments  to  subdivisions  1  and  2 of section 56-a of the alcoholic
    9  beverage control law made by section eight of this act shall take effect
   10  on the same date and in the same manner as sections 7 and 8, respective-
   11  ly, of chapter 108 of the laws of 2012, as amended, take effect.
   12                                   PART J
   13    Section 1. The general municipal  law  is  amended  by  adding  a  new
   14  section 875 to read as follows:
   15    S  875.  SPECIAL PROVISIONS APPLICABLE TO STATE SALES AND COMPENSATING
   16  USE TAXES AND CERTAIN TYPES OF  FACILITIES.  1.  FOR  PURPOSES  OF  THIS
   17  SECTION:  "STATE  SALES  AND USE TAXES" MEANS SALES AND COMPENSATING USE
   18  TAXES AND FEES IMPOSED BY ARTICLE TWENTY-EIGHT OR TWENTY-EIGHT-A OF  THE
   19  TAX  LAW  BUT  EXCLUDING  SUCH TAXES IMPOSED IN A CITY BY SECTION ELEVEN
   20  HUNDRED SEVEN OR ELEVEN HUNDRED  EIGHT  OF  SUCH  ARTICLE  TWENTY-EIGHT.
   21  "IDA" MEANS AN INDUSTRIAL DEVELOPMENT AGENCY ESTABLISHED BY THIS ARTICLE
   22  OR AN INDUSTRIAL DEVELOPMENT AUTHORITY CREATED BY THE PUBLIC AUTHORITIES
   23  LAW. "COMMISSIONER" MEANS THE COMMISSIONER OF TAXATION AND FINANCE.
   24    2.  (A)  AN  IDA  SHALL  NOT PROVIDE STATE SALES AND USE TAX EXEMPTION
   25  BENEFITS WITH RESPECT TO ANY PROJECT UNLESS AND UNTIL THE  PREREQUISITES
   26  SET  FORTH  IN  PARAGRAPHS (B), (C), (D) AND (E) OF THIS SUBDIVISION ARE
   27  MET.
   28    (B) EITHER (I) THE AGENT OR PROJECT OPERATOR OF SUCH PROJECT MUST HAVE
   29  BEEN CERTIFIED AS A PARTICIPANT IN THE EXCELSIOR JOBS PROGRAM,  AS  SUCH
   30  TERM  "PARTICIPANT" IS DEFINED IN SECTION THREE HUNDRED FIFTY-TWO OF THE
   31  ECONOMIC DEVELOPMENT LAW, AND PROVIDES TO THE IDA VALID PROOF OF PARTIC-
   32  IPATION IN SUCH PROGRAM, OR (II) IF SUCH AGENT OR  PROJECT  OPERATOR  IS
   33  NOT A PARTICIPANT IN SUCH PROGRAM, THE IDA, AFTER REVIEWING THE FACTS ON
   34  THE  RECORD,  MUST FIND THAT THE AGENT OR PROJECT OPERATOR IS A BUSINESS
   35  ENTITY OF THE TYPE DESCRIBED IN SUBDIVISION ONE OF SECTION THREE HUNDRED
   36  FIFTY-THREE OF THE ECONOMIC  DEVELOPMENT  LAW  AND  REGULATIONS  ADOPTED
   37  PURSUANT TO SUCH SECTION.
   38    (C)  IF  THE  PREREQUISITE IN EITHER SUBPARAGRAPH (I) OR (II) OF PARA-
   39  GRAPH (B) OF THIS SUBDIVISION HAS BEEN MET,  THE  IDA  SHALL  SUBMIT  IN
   40  WRITING ITS PLAN TO PROVIDE SUCH STATE SALES AND USE TAX EXEMPTION BENE-
   41  FITS  FOR  SUCH  PROJECT,  TOGETHER WITH THE FINDINGS IT MADE UNDER SUCH
   42  SUBPARAGRAPH (II) OF PARAGRAPH  (B)  TO  THE  COMMISSIONER  OF  ECONOMIC
   43  DEVELOPMENT.
   44    (D)  THE  COMMISSIONER  OF  ECONOMIC  DEVELOPMENT  SHALL  REVIEW  SUCH
   45  PROPOSED STATE SALES AND USE TAX EXEMPTION BENEFIT PLAN FOR SUCH PROJECT
   46  AND DETERMINE, IN CONSULTATION WITH THE  REGIONAL  ECONOMIC  DEVELOPMENT
   47  COUNCIL  ESTABLISHED  BY  THE GOVERNOR THAT ENCOMPASSES THE JURISDICTION
   48  FOR WHOSE BENEFIT THE IDA RECOMMENDING THE TAX  EXEMPTION  BENEFITS  WAS
   49  CREATED, WHETHER SUCH PROPOSED STATE SALES AND USE TAX EXEMPTION BENEFIT
   50  PLAN  FOR  SUCH PROJECT IS CONSISTENT WITH REGIONAL ECONOMIC DEVELOPMENT
   51  STRATEGIES.
   52    (E) THE COMMISSIONER OF ECONOMIC DEVELOPMENT SHALL  REVIEW  THE  IDA'S
   53  FINDINGS,  IF  ANY,  AND  APPROVE OR DISAPPROVE THE PROPOSED BENEFITS OR
   54  DENY THEM IF SUCH COMMISSIONER DOES NOT APPROVE SUCH IDA'S FINDINGS THAT
       S. 2609                            63                            A. 3009
    1  THE AGENT/PROJECT OPERATOR IS A BUSINESS ENTITY OF  THE  TYPE  REQUIRED.
    2  SUCH  COMMISSIONER  IS ALSO AUTHORIZED TO MODIFY THE IDA'S PROPOSED PLAN
    3  BY REDUCING THE TOTAL AMOUNT  OF  ANY  SUCH  STATE  SALES  AND  USE  TAX
    4  EXEMPTION  BENEFITS  OR  BY SPECIFYING THAT SUCH BENEFITS SHALL APPLY TO
    5  ONLY SOME OF THE TYPES OF PROPERTY OR SERVICES  PROPOSED  TO  BE  EXEMPT
    6  FROM  SUCH  STATE TAXES OR BY REDUCING THE TIME PERIOD DURING WHICH SUCH
    7  BENEFITS MAY BE PROVIDED. SUCH COMMISSIONER  SHALL  ADVISE  THE  IDA  IN
    8  WRITING  OF HIS OR HER APPROVAL, DISAPPROVAL, DENIAL, OR MODIFICATION OF
    9  THE IDA'S PLAN, AND SUCH APPROVAL, DISAPPROVAL, DENIAL, OR  MODIFICATION
   10  SHALL BIND THE IDA AS TO WHETHER THE IDA CAN PROVIDE STATE SALES AND USE
   11  TAX  EXEMPTION  BENEFITS  AND,  IF APPROVED IN WHOLE OR AS MODIFIED, THE
   12  AMOUNT OF STATE SALES AND USE TAX EXEMPTION BENEFITS THAT  THE  IDA  CAN
   13  PROVIDE WITH RESPECT TO SUCH PROJECT, THE TYPES OF PROPERTY AND SERVICES
   14  THAT  MAY  BE  ELIGIBLE  FOR  EXEMPTION, AND THE DURATION OF TIME DURING
   15  WHICH SUCH EXEMPTION BENEFITS MAY APPLY. HOWEVER, THE  IDA  MAY  PROVIDE
   16  STATE SALES AND USE TAX EXEMPTION BENEFITS IN A LESSER AMOUNT, FOR FEWER
   17  TYPES OF PROPERTY OR SERVICES, OR FOR A SHORTER PERIOD, THAN AS APPROVED
   18  BY SUCH COMMISSIONER.
   19    (F)  NOTWITHSTANDING  THE  FOREGOING, IF AT THE TIME AN IDA PROPOSES A
   20  STATE SALES AND USE TAX EXEMPTION BENEFIT  PLAN  THERE  IS  NO  REGIONAL
   21  ECONOMIC  DEVELOPMENT COUNCIL IN THE APPLICABLE REGION, THEN THE COMMIS-
   22  SIONER OF ECONOMIC DEVELOPMENT SHALL REVIEW SUCH PLAN AND ANY SUCH FIND-
   23  INGS AS PROVIDED IN PARAGRAPH (D) OF THIS SUBDIVISION, WITHOUT REGARD TO
   24  THE RECOMMENDATION OF ANY OTHER BODY.
   25    (G) AN IDA SHALL NOT PROVIDE STATE SALES AND USE TAX  EXEMPTION  BENE-
   26  FITS IN AN AMOUNT GREATER, FOR PROPERTY OR SERVICES OTHER, OR FOR A TIME
   27  PERIOD  LONGER THAN AS APPROVED BY THE COMMISSIONER OF ECONOMIC DEVELOP-
   28  MENT. ANY AMOUNT OF STATE SALES AND USE TAX EXEMPTION BENEFITS  THAT  AN
   29  IDA PURPORTS TO PROVIDE IN EXCESS OF THE AMOUNT APPROVED, OR FOR DIFFER-
   30  ENT  PROPERTY  OR  SERVICES  THAN  APPROVED, OR FOR A PERIOD LONGER THAN
   31  APPROVED BY SUCH COMMISSIONER SHALL BE VOID FROM ITS INCEPTION,  AND  AN
   32  AGENT, PROJECT OPERATOR, OR OTHER PERSON OR ENTITY THAT MAKES A PURCHASE
   33  OR  USE WITHOUT PAYING STATE SALES AND USE TAXES, OR WHO PAID SUCH TAXES
   34  BUT OBTAINED A REFUND OR CREDIT OF THEM, AS A RESULT SHALL  BE  REQUIRED
   35  TO PAY SUCH AMOUNT OF TAX TO THE COMMISSIONER OF TAXATION AND FINANCE IN
   36  ACCORDANCE  WITH  ARTICLES  TWENTY-EIGHT AND TWENTY-NINE OF THE TAX LAW.
   37  THE COMMISSIONER SHALL BE AUTHORIZED TO DETERMINE AND ASSESS STATE SALES
   38  AND USE TAXES FOREGONE ON ACCOUNT OF AN AGENT, PROJECT OPERATOR OR OTHER
   39  PERSON OR ENTITY NOT HAVING PAID SUCH STATE SALES OR USE TAX THAT SHOULD
   40  HAVE BEEN PAID, OR WHO OBTAINED SUCH A REFUND OR CREDIT BUT  SHOULD  NOT
   41  HAVE,  IN  ACCORD  WITH THE APPLICABLE PROVISIONS OF THE TAX LAW, EXCEPT
   42  THAT ANY STATUTE THAT LIMITS THE TIME BY  WHICH  THE  COMMISSIONER  MUST
   43  DETERMINE  OR  ASSESS  SUCH TAX SHALL NOT BEGIN TO RUN UNTIL THE COMMIS-
   44  SIONER HAS RECEIVED ACTUAL NOTICE OF SUCH IMPROPER PURCHASES OR USES.
   45    3. AN IDA SHALL KEEP RECORDS OF THE AMOUNT OF STATE  AND  LOCAL  SALES
   46  AND  USE  TAX EXEMPTION BENEFITS PROVIDED TO EACH PROJECT AND EACH AGENT
   47  OR PROJECT OPERATOR, AND  SHALL  MAKE  SUCH  RECORDS  AVAILABLE  TO  THE
   48  COMMISSIONER  AND  STATE  COMPTROLLER UPON REQUEST. SUCH IDA SHALL ALSO,
   49  WITHIN THIRTY DAYS OF PROVIDING FINANCIAL ASSISTANCE TO A  PROJECT  THAT
   50  INCLUDES  ANY  AMOUNT  OF  STATE  SALES  AND USE TAX EXEMPTION BENEFITS,
   51  REPORT TO THE COMMISSIONER AND THE STATE COMPTROLLER THE AMOUNT OF  SUCH
   52  BENEFITS FOR SUCH PROJECT, THE PROJECT TO WHICH THEY ARE BEING PROVIDED,
   53  ANY  LIMITATION  ON  THE APPLICATION OR EXERCISE OF SUCH EXEMPTIONS, THE
   54  TYPES OF PROPERTY AND SERVICES TO BE EXEMPTED,  THE  TIME  DURING  WHICH
   55  SUCH  EXEMPTION BENEFITS APPLY, AND THE NAME AND ADDRESS OF THE AGENT OR
   56  PROJECT OPERATOR OF SUCH PROJECT, TOGETHER WITH SUCH  OTHER  INFORMATION
       S. 2609                            64                            A. 3009
    1  AND  SUCH SPECIFICITY AND DETAIL AS THE COMMISSIONER MAY PRESCRIBE, WITH
    2  A COPY OF SUCH REPORT FURNISHED AT THE SAME TIME TO THE AGENT OR PROJECT
    3  OPERATOR. THIS REPORT MAY BE MADE  IN  CONJUNCTION  WITH  THE  STATEMENT
    4  REQUIRED  BY  SUBDIVISION  NINE OF SECTION EIGHT HUNDRED SEVENTY-FOUR OF
    5  THIS ARTICLE OR IT MAY BE MADE AS A SEPARATE REPORT, AT  THE  DISCRETION
    6  OF  THE  COMMISSIONER.  AN  AGENT OR PROJECT OPERATOR OR OTHER PERSON OR
    7  ENTITY SHALL NOT AVAIL ITSELF OF  STATE  OR  LOCAL  SALES  AND  USE  TAX
    8  EXEMPTIONS  IN  EXCESS OF THE AMOUNT OR IN CONTRAVENTION OF THE TIME AND
    9  OTHER LIMITATIONS SET OUT IN SUCH REPORT OR  FOR  PROPERTY  OR  SERVICES
   10  OTHER  THAN THOSE SET OUT IN SUCH REPORT. AN IDA THAT FAILS TO MAKE SUCH
   11  RECORDS AVAILABLE TO THE COMMISSIONER OR TO THE STATE COMPTROLLER OR  TO
   12  FILE  SUCH REPORT OR TO COMPLY WITH ANY OTHER REQUIREMENT OF THIS SUBDI-
   13  VISION SHALL BE PROHIBITED  FROM  PROVIDING  STATE  SALES  AND  USE  TAX
   14  EXEMPTION  BENEFITS FOR ANY PROJECT UNLESS AND UNTIL SUCH IDA COMES INTO
   15  COMPLIANCE WITH ALL SUCH REQUIREMENTS.
   16    4. NOTWITHSTANDING ANY PROVISION OF THIS SECTION OR OTHER LAW,  IN  NO
   17  CASE  SHALL  AN  IDA  AGENT, PROJECT OPERATOR, OR OTHER PERSON OR ENTITY
   18  TAKE ANY STATE SALES AND USE TAX EXEMPTION BENEFITS AS EXEMPTIONS AT THE
   19  TIME OF PURCHASE OR USE. RATHER, IN ALL  CASES,  THE  PERSON  OR  ENTITY
   20  SHALL PAY STATE SALES OR USE TAX TO THE PERSON REQUIRED TO COLLECT IT AT
   21  THE  TIME OF PURCHASE OR TO THE COMMISSIONER IN ACCORD WITH THE REQUIRE-
   22  MENTS OF ARTICLE TWENTY-EIGHT OF THE TAX LAW. AFTER HAVING PAID  TAX  TO
   23  THE PERSON REQUIRED TO COLLECT IT OR TO THE COMMISSIONER, SUCH PERSON OR
   24  ENTITY MAY THEN APPLY TO THE COMMISSIONER FOR A REFUND OR CREDIT OF SUCH
   25  TAX  ACTUALLY  PAID. ANY SUCH REFUND OR CREDIT SHALL THEN BE APPLIED FOR
   26  IN THE MANNER ESTABLISHED BY AND SUBJECT TO THE PROVISIONS OF SUCH ARTI-
   27  CLE TWENTY-EIGHT.
   28    5. NOTWITHSTANDING ANY PROVISION OF THIS SECTION OR OTHER LAW, AN  IDA
   29  SHALL NOT CREATE A PROJECT OR ANY PORTION OF A PROJECT, OR AUTHORIZE THE
   30  USE OF ANY PROJECT OR PROJECT PROPERTY, OUTSIDE THIS STATE.
   31    6.  AN IDA THAT ENTERS INTO AN AGREEMENT REQUIRING PAYMENTS IN LIEU OF
   32  STATE SALES AND USE TAXES TO BE PAID TO IT SHALL REMIT THE  FULL  AMOUNT
   33  OF  ANY SUCH PAYMENTS IT RECEIVES TO THE COMMISSIONER WITHIN THIRTY DAYS
   34  OF THE DATE THAT THE IDA RECEIVES THE PAYMENT, TOGETHER WITH A RETURN OR
   35  REPORT REQUIRED BY THE COMMISSIONER. THE IDA SHALL SEND A  COPY  OF  ANY
   36  SUCH  AGREEMENT  FOR  PAYMENT  IN LIEU OF SUCH TAXES TO THE COMMISSIONER
   37  WITHIN THIRTY DAYS OF THE DATE IT IS EXECUTED. IF THE PERSON  OR  ENTITY
   38  REQUIRED  TO  MAKE SUCH PAYMENTS TO THE IDA FAILS TO DO SO TIMELY, OR IF
   39  THE IDA FAILS TO REMIT SUCH PAYMENTS TO  THE  COMMISSIONER  TIMELY,  THE
   40  AMOUNT  OF  ANY  SUCH  UNTIMELY  PAYMENTS OR REMISSIONS, TOGETHER WITH A
   41  PENALTY OF FIVE PERCENT OF THE AMOUNT OF SUCH LATE PAYMENTS AND INTEREST
   42  ON SUCH LATE PAYMENTS AT THE RATE OF ONE PERCENT  PER MONTH,  SHALL  ALL
   43  BE DEEMED TO BE SALES TAX WHICH A RETURN OR REPORT SHOWS TO BE DUE UNDER
   44  SECTION  ONE  HUNDRED  SEVENTY-THREE-A  OF  THE TAX LAW AND SUCH AMOUNTS
   45  SHALL BE PAID UPON NOTICE AND DEMAND AND SHALL BE  ASSESSED,  COLLECTED,
   46  AND  PAID  IN  THE  MANNER  PROVIDED  FOR SALES TAX, AND SUCH NOTICE AND
   47  DEMAND SHALL  NOT  BE  CONSIDERED  AS  A  NOTICE  OF  DETERMINATION,  AS
   48  DESCRIBED IN SUCH SECTION ONE HUNDRED SEVENTY-THREE-A. AN IDA SHALL JOIN
   49  THE  COMMISSIONER  AS  A  PARTY IN ANY ACTION OR PROCEEDING THAT THE IDA
   50  COMMENCES TO RECOVER, OBTAIN, OR OTHERWISE SEEK, ANY UNPAID PAYMENTS  IN
   51  LIEU OF STATE SALES AND USE TAX FROM AN AGENT, PROJECT OPERATOR OR OTHER
   52  PERSON OR ENTITY. THE PROVISIONS OF THIS SUBDIVISION SHALL ALSO APPLY TO
   53  ANY  INTEREST  OR  PENALTY  THAT THE IDA IMPOSES ON ANY SUCH PAYMENTS IN
   54  LIEU OF TAXES OR THAT ARE IMPOSED ON SUCH PAYMENTS BY OPERATION  OF  LAW
   55  OR  BY JUDICIAL ORDER OR OTHERWISE. ANY SUCH PAYMENTS, TOGETHER WITH ANY
   56  INTEREST OR PENALTIES THEREON, SHALL BE DEEMED TO BE STATE SALES AND USE
       S. 2609                            65                            A. 3009
    1  TAXES AND THE IDA SHALL RECEIVE ANY SUCH PAYMENTS, WHETHER AS  A  RESULT
    2  OF  COURT  ACTION  OR  OTHERWISE,  AS  TRUSTEE FOR AND ON ACCOUNT OF THE
    3  STATE.
    4    7.  AN  IDA  OR IDA AGENT OR PROJECT OPERATOR SHALL NOT BE EXEMPT FROM
    5  THE TAXES IMPOSED BY PARAGRAPH TEN OF SUBDIVISION (C) OF SECTION  ELEVEN
    6  HUNDRED  FIVE  OR  BY ARTICLE TWENTY-EIGHT-A OR TWENTY-NINE-A OF THE TAX
    7  LAW.
    8    8. IF AN IDA RECOVERS, RECAPTURES, RECEIVES, OR OTHERWISE OBTAINS, ANY
    9  AMOUNT OF STATE SALES AND USE TAX  EXEMPTION  BENEFITS  FROM  AN  AGENT,
   10  PROJECT OPERATOR OR OTHER PERSON OR ENTITY, THE IDA SHALL, WITHIN THIRTY
   11  DAYS  OF  COMING INTO POSSESSION OF SUCH AMOUNT, REMIT IT TO THE COMMIS-
   12  SIONER, TOGETHER WITH SUCH INFORMATION AND REPORT THAT THE  COMMISSIONER
   13  DEEMS  NECESSARY TO ADMINISTER PAYMENT OVER OF SUCH AMOUNT. AN IDA SHALL
   14  JOIN THE COMMISSIONER AS A PARTY IN ANY ACTION OR  PROCEEDING  THAT  THE
   15  IDA  COMMENCES  TO  RECOVER,  RECAPTURE,  OBTAIN,  OR OTHERWISE SEEK THE
   16  RETURN OF, STATE SALES AND USE TAX EXEMPTION  BENEFITS  FROM  AN  AGENT,
   17  PROJECT  OPERATOR  OR  OTHER  PERSON OR ENTITY.   THIS SUBDIVISION SHALL
   18  APPLY TO ANY AMOUNTS OF STATE SALES AND USE TAX EXEMPTION BENEFITS  THAT
   19  AN  IDA RECOVERS, RECAPTURES, RECEIVES, OR OTHERWISE OBTAINS, REGARDLESS
   20  OF WHETHER THE IDA OR THE AGENT, PROJECT OPERATOR  OR  OTHER  PERSON  OR
   21  ENTITY  CHARACTERIZES  SUCH BENEFITS RECOVERED, RECAPTURED, RECEIVED, OR
   22  OTHERWISE OBTAINED, AS A PENALTY OR LIQUIDATED OR  CONTRACT  DAMAGES  OR
   23  OTHERWISE.  THE  PROVISIONS  OF THIS SUBDIVISION SHALL ALSO APPLY TO ANY
   24  INTEREST OR PENALTY THAT THE IDA IMPOSES ON ANY SUCH AMOUNTS OR THAT ARE
   25  IMPOSED ON SUCH AMOUNTS BY OPERATION OF LAW  OR  BY  JUDICIAL  ORDER  OR
   26  OTHERWISE.  ANY  SUCH  AMOUNTS  OR PAYMENTS THAT AN IDA RECOVERS, RECAP-
   27  TURES, RECEIVES, OR OTHERWISE OBTAINS, TOGETHER  WITH  ANY  INTEREST  OR
   28  PENALTIES  THEREON,  SHALL BE DEEMED TO BE STATE SALES AND USE TAXES AND
   29  THE IDA SHALL RECEIVE ANY SUCH AMOUNTS OR PAYMENTS, WHETHER AS A  RESULT
   30  OF  COURT  ACTION  OR  OTHERWISE,  AS  TRUSTEE FOR AND ON ACCOUNT OF THE
   31  STATE.
   32    9. THE COMMISSIONER SHALL DEPOSIT AND DISPOSE OF  ANY  AMOUNT  OF  ANY
   33  PAYMENTS  OR  MONEYS  RECEIVED FROM OR PAID OVER BY AN IDA OR FROM OR BY
   34  ANY PERSON OR ENTITY, OR RECEIVED PURSUANT TO AN  ACTION  OR  PROCEEDING
   35  COMMENCED  BY  AN  IDA, TOGETHER WITH ANY INTEREST OR PENALTIES THEREON,
   36  PURSUANT TO SUBDIVISION SIX OR EIGHT OF THIS SECTION, AS STATE SALES AND
   37  USE TAXES IN ACCORD WITH THE PROVISIONS OF ARTICLE TWENTY-EIGHT  OF  THE
   38  TAX  LAW.   THE AMOUNT OF ANY SUCH PAYMENTS OR MONEYS, TOGETHER WITH ANY
   39  INTEREST OR PENALTIES THEREON, SHALL BE ATTRIBUTED TO THE TAXES  IMPOSED
   40  BY SECTIONS ELEVEN HUNDRED FIVE AND ELEVEN HUNDRED TEN, ON THE ONE HAND,
   41  AND SECTION ELEVEN HUNDRED NINE OF THE TAX LAW, ON THE OTHER HAND, OR TO
   42  ANY  LIKE TAXES OR FEES IMPOSED BY SUCH ARTICLE, BASED ON THE PROPORTION
   43  THAT THE RATES OF SUCH TAXES OR FEES BEAR TO EACH OTHER, UNLESS THERE IS
   44  EVIDENCE TO SHOW THAT ONLY ONE OR THE OTHER OF SUCH TAXES  OR  FEES  WAS
   45  IMPOSED OR RECEIVED OR PAID OVER.
   46    10.  THE  STATEMENT  THAT  AN  IDA  IS REQUIRED BY SUBDIVISION NINE OF
   47  SECTION EIGHT HUNDRED SEVENTY-FOUR OF THIS  ARTICLE  TO  FILE  WITH  THE
   48  COMMISSIONER  SHALL  NOT BE CONSIDERED AN EXEMPTION OR OTHER CERTIFICATE
   49  OR DOCUMENT UNDER ARTICLE TWENTY-EIGHT OR TWENTY-NINE OF  THE  TAX  LAW.
   50  THE  IDA  SHALL  NOT  REPRESENT TO ANY AGENT, PROJECT OPERATOR, OR OTHER
   51  PERSON OR ENTITY THAT A COPY OF SUCH STATEMENT MAY SERVE AS A  SALES  OR
   52  USE  TAX EXEMPTION CERTIFICATE OR DOCUMENT. NO AGENT OR PROJECT OPERATOR
   53  MAY TENDER A COPY OF SUCH STATEMENT TO ANY PERSON  REQUIRED  TO  COLLECT
   54  SALES OR USE TAXES AS THE BASIS TO MAKE ANY PURCHASE EXEMPT FROM TAX. NO
   55  SUCH  PERSON  REQUIRED  TO  COLLECT SALES OR USE TAXES MAY ACCEPT SUCH A
   56  STATEMENT IN LIEU OF COLLECTING ANY TAX REQUIRED TO  BE  COLLECTED.  THE
       S. 2609                            66                            A. 3009
    1  CIVIL  AND  CRIMINAL PENALTIES FOR MISUSE OF A COPY OF SUCH STATEMENT AS
    2  AN EXEMPTION CERTIFICATE OR DOCUMENT OR FOR FAILURE TO  PAY  OR  COLLECT
    3  TAX  SHALL BE AS PROVIDED IN THE TAX LAW. IN ADDITION, THE USE BY AN IDA
    4  OR AGENT, PROJECT OPERATOR, OR OTHER PERSON OR ENTITY OF SUCH STATEMENT,
    5  OR  THE  IDA'S RECOMMENDATION OF THE USE OR TENDERING OF SUCH STATEMENT,
    6  AS SUCH AN EXEMPTION CERTIFICATE OR DOCUMENT  SHALL  BE  DEEMED  TO  BE,
    7  UNDER  ARTICLES  TWENTY-EIGHT AND THIRTY-SEVEN OF THE TAX LAW, THE ISSU-
    8  ANCE OF A FALSE OR FRAUDULENT EXEMPTION  CERTIFICATE  OR  DOCUMENT  WITH
    9  INTENT TO EVADE TAX.
   10    11. IN CONSULTATION WITH THE COMMISSIONER OF ECONOMIC DEVELOPMENT, THE
   11  COMMISSIONER OF TAXATION AND FINANCE IS HEREBY AUTHORIZED TO ADOPT RULES
   12  AND  REGULATIONS AND TO ISSUE PUBLICATIONS AND OTHER GUIDANCE IMPLEMENT-
   13  ING THE PROVISIONS OF THIS SECTION AND OF THE  OTHER  SECTIONS  OF  THIS
   14  ARTICLE  RELATING  TO  ANY  STATE  OR  LOCAL TAX OR FEE, OR EXEMPTION OR
   15  EXCLUSION THEREFROM, THAT THE COMMISSIONER ADMINISTERS AND THAT  MAY  BE
   16  AFFECTED  BY ANY PROVISION OF THIS ARTICLE, AND ANY SUCH RULES AND REGU-
   17  LATIONS OF THE COMMISSIONER SHALL HAVE THE SAME FORCE  AND  EFFECT  WITH
   18  RESPECT  TO SUCH TAXES AND FEES, OR AMOUNTS MEASURED IN RESPECT OF THEM,
   19  AS IF THEY HAD BEEN ADOPTED BY THE COMMISSIONER PURSUANT TO THE AUTHORI-
   20  TY OF THE TAX LAW.
   21    12. TO THE EXTENT THAT A PROVISION OF THIS SECTION  CONFLICTS  WITH  A
   22  PROVISION  OF  ANY OTHER SECTION OF THIS ARTICLE, THE PROVISIONS OF THIS
   23  SECTION SHALL CONTROL.
   24    S 2. The public authorities law is amended by  adding  a  new  section
   25  1963-b to read as follows:
   26    S  1963-B. SPECIAL PROVISIONS APPLICABLE TO STATE SALES AND COMPENSAT-
   27  ING USE TAXES AND CERTAIN TYPES OF FACILITIES. THE PROVISIONS OF SECTION
   28  EIGHT HUNDRED SEVENTY-FIVE OF THE GENERAL MUNICIPAL LAW SHALL  APPLY  TO
   29  THE  PROVISIONS OF THIS TITLE AND TO THE AUTHORITY CREATED BY THIS TITLE
   30  WITH THE SAME FORCE AND EFFECT AS IF  THE  PROVISIONS  OF  SUCH  SECTION
   31  EIGHT HUNDRED SEVENTY-FIVE HAD BEEN INCORPORATED IN FULL INTO THIS TITLE
   32  AND  HAD  EXPRESSLY REFERRED TO THE PROVISIONS OF THIS TITLE AND TO SUCH
   33  AUTHORITY, WITH SUCH CHANGES TO SUCH SECTION AS ARE NECESSARY  TO  REFER
   34  TO  THE  PROVISIONS  OF  THIS TITLE AND TO THE AUTHORITY CREATED BY THIS
   35  TITLE.
   36    S 3. The public authorities law is amended by  adding  a  new  section
   37  2326-a to read as follows:
   38    S  2326-A. SPECIAL PROVISIONS APPLICABLE TO STATE SALES AND COMPENSAT-
   39  ING USE TAXES AND CERTAIN TYPES OF FACILITIES. THE PROVISIONS OF SECTION
   40  EIGHT HUNDRED SEVENTY-FIVE OF THE GENERAL MUNICIPAL LAW SHALL  APPLY  TO
   41  THE  PROVISIONS OF THIS TITLE AND TO THE AUTHORITY CREATED BY THIS TITLE
   42  WITH THE SAME FORCE AND EFFECT AS IF  THE  PROVISIONS  OF  SUCH  SECTION
   43  EIGHT HUNDRED SEVENTY-FIVE HAD BEEN INCORPORATED IN FULL INTO THIS TITLE
   44  AND  HAD  EXPRESSLY REFERRED TO THE PROVISIONS OF THIS TITLE AND TO SUCH
   45  AUTHORITY, WITH SUCH CHANGES TO SUCH SECTION AS ARE NECESSARY  TO  REFER
   46  TO  THE  PROVISIONS  OF  THIS TITLE AND TO THE AUTHORITY CREATED BY THIS
   47  TITLE.
   48    S 4. Subdivision 3 of section 810 of the  general  municipal  law,  as
   49  amended  by  chapter  356  of  the  laws  of 1993, is amended to read as
   50  follows:
   51    3. The term "local officer or employee" shall mean  the  heads  (other
   52  than local elected officials) of any agency, department, division, coun-
   53  cil,  board,  commission, or bureau of a political subdivision and their
   54  deputies and assistants, and the officers and employees  of  such  agen-
   55  cies,  departments,  divisions, boards, bureaus, commissions or councils
   56  who hold policy-making positions, as annually determined by the appoint-
       S. 2609                            67                            A. 3009
    1  ing authority and set forth in a written instrument which shall be filed
    2  with the appropriate body during the month of February; except that  the
    3  term  "local officer or employee" shall not mean a judge, justice, offi-
    4  cer  or  employee  of  the  unified court system. Members, officers, and
    5  employees of each industrial development  agency  and  authority  ESTAB-
    6  LISHED BY THIS CHAPTER OR CREATED BY THE PUBLIC AUTHORITIES LAW shall be
    7  deemed  officers  or employees of the county, city, village, or town for
    8  whose benefit such agency or authority is established OR CREATED.
    9    S 5. Subdivision 4 of section 854 of the  general  municipal  law,  as
   10  amended  by  chapter  478  of  the  laws  of 2011, is amended to read as
   11  follows:
   12    (4) "Project" - shall mean any land, any building  or  other  improve-
   13  ment,  and  all real and personal properties located within the state of
   14  New York and within or outside or partially within and partially outside
   15  the municipality for whose benefit the agency  was  created,  including,
   16  but  not  limited  to,  machinery, equipment and other facilities deemed
   17  necessary or desirable in connection therewith, or  incidental  thereto,
   18  whether  or  not  now in existence or under construction, which shall be
   19  suitable for manufacturing, warehousing, research, commercial or  indus-
   20  trial  purposes  or  other  economically  sound  purposes identified and
   21  called for to implement a state designated urban cultural  park  manage-
   22  ment  plan  as provided in title G of the parks, recreation and historic
   23  preservation law and which may include or mean an  industrial  pollution
   24  control facility, a recreation facility, educational or cultural facili-
   25  ty, a horse racing facility, a railroad facility or an automobile racing
   26  facility,  provided,  however,  no agency shall use its funds OR PROVIDE
   27  FINANCIAL ASSISTANCE in respect  of  any  project  wholly  or  partially
   28  outside  the municipality for whose benefit the agency was created with-
   29  out the prior consent thereto by the governing body or bodies of all the
   30  other municipalities in which a part or parts of the project is,  or  is
   31  to  be,  located,  AND  SUCH PORTION OF THE PROJECT LOCATED OUTSIDE SUCH
   32  MUNICIPALITY FOR WHOSE BENEFIT THE AGENCY WAS CREATED SHALL  BE  CONTIG-
   33  UOUS WITH THE PORTION OF THE PROJECT INSIDE SUCH MUNICIPALITY.
   34    S 6. Section 883 of the general municipal law, as added by chapter 356
   35  of the laws of 1993, is amended to read as follows:
   36    S  883. Conflicts of interest. All members, officers, and employees of
   37  an agency or INDUSTRIAL DEVELOPMENT authority ESTABLISHED BY THIS  CHAP-
   38  TER  OR  CREATED  BY  THE PUBLIC AUTHORITIES LAW shall be subject to the
   39  provisions of article eighteen of this chapter.
   40    S 7. Subdivision 9 of section 874 of the  general  municipal  law,  as
   41  added  by  section 1 of subpart C of part S of chapter 57 of the laws of
   42  2010, is amended to read as follows:
   43    (9) (A) Within thirty days of the date that the  agency  designates  a
   44  project  operator  or  other  person  to  act as agent of the agency for
   45  purposes of providing financial assistance consisting of any  sales  and
   46  compensating  use  tax exemption to such person, the agency shall file a
   47  statement with the department of taxation and finance relating  thereto,
   48  on  a  form  and  in such manner as is prescribed by the commissioner of
   49  taxation and finance, identifying each such agent so named by the  agen-
   50  cy, setting forth the taxpayer identification number of each such agent,
   51  giving  a  brief description of the property and/or services intended to
   52  be exempted from such taxes as a result of such  appointment  as  agent,
   53  indicating  the  agency's  rough  estimate  of the value of the property
   54  and/or services to which such appointment as agent  relates,  indicating
   55  the  date when such designation as agent became effective and indicating
   56  the date upon which such designation as agent shall cease.
       S. 2609                            68                            A. 3009
    1    (B) WITHIN THIRTY DAYS OF  THE  DATE  THAT  THE  AGENCY'S  DESIGNATION
    2  DESCRIBED  IN PARAGRAPH (A) OF THIS SUBDIVISION HAS BEEN AMENDED, TERMI-
    3  NATED, BEEN REVOKED, OR BECOME INVALID OR INEFFECTIVE  FOR  ANY  REASON,
    4  THE  AGENCY  SHALL  FILE A STATEMENT WITH THE DEPARTMENT OF TAXATION AND
    5  FINANCE  RELATING THERETO, ON A FORM AND IN SUCH MANNER AS IS PRESCRIBED
    6  BY THE COMMISSIONER OF TAXATION AND FINANCE, IDENTIFYING EACH SUCH AGENT
    7  SO NAMED BY THE AGENCY IN THE ORIGINAL DESIGNATION AND SETTING FORTH THE
    8  TAXPAYER IDENTIFICATION NUMBER AND OTHER IDENTIFYING INFORMATION OF EACH
    9  SUCH AGENT, THE DATE AS OF WHICH THE ORIGINAL DESIGNATION  WAS  AMENDED,
   10  TERMINATED,  REVOKED,  OR  BECAME  INVALID OR INEFFECTIVE AND THE REASON
   11  THEREFOR, TOGETHER WITH A COPY OF THE ORIGINAL DESIGNATION.
   12    S 8. Subdivision 4 of section 1963 of the public authorities  law,  as
   13  added  by  section 2 of subpart C of part S of chapter 57 of the laws of
   14  2010, is amended to read as follows;
   15    4. (A) Within thirty days of the date that the authority designates  a
   16  project  operator  or  other person to act as agent of the authority for
   17  purposes of providing financial assistance consisting of any  sales  and
   18  compensating  use  tax exemption to such person, the agency shall file a
   19  statement with the department of taxation and finance relating  thereto,
   20  on  a  form  and  in such manner as is prescribed by the commissioner of
   21  taxation and finance, identifying  each  such  agent  so  named  by  the
   22  authority, setting forth the taxpayer identification number of each such
   23  agent,  giving  a  brief  description  of  the  property and/or services
   24  intended to be exempted from such taxes as a result of such  appointment
   25  as  agent, indicating the authority's rough estimate of the value of the
   26  property and/or services to which such  appointment  as  agent  relates,
   27  indicating  the date when such designation as agent became effective and
   28  indicating the date upon which such designation as agent shall cease.
   29    (B) WITHIN THIRTY DAYS OF THE DATE THAT  THE  AUTHORITY'S  DESIGNATION
   30  DESCRIBED  IN PARAGRAPH (A) OF THIS SUBDIVISION HAS BEEN AMENDED, TERMI-
   31  NATED, BEEN REVOKED, OR BECOME INVALID OR INEFFECTIVE  FOR  ANY  REASON,
   32  THE AUTHORITY SHALL FILE A STATEMENT WITH THE DEPARTMENT OF TAXATION AND
   33  FINANCE  RELATING THERETO, ON A FORM AND IN SUCH MANNER AS IS PRESCRIBED
   34  BY THE COMMISSIONER OF TAXATION AND FINANCE, IDENTIFYING EACH SUCH AGENT
   35  SO NAMED BY THE AUTHORITY IN THE ORIGINAL DESIGNATION AND SETTING  FORTH
   36  THE  TAXPAYER IDENTIFICATION NUMBER AND OTHER IDENTIFYING INFORMATION OF
   37  EACH SUCH AGENT, THE DATE AS  OF  WHICH  THE  ORIGINAL  DESIGNATION  WAS
   38  AMENDED,  TERMINATED,  REVOKED, OR BECAME INVALID OR INEFFECTIVE AND THE
   39  REASON THEREFOR, TOGETHER WITH A COPY OF THE ORIGINAL DESIGNATION.
   40    S 9. Subdivision 4 of section 2326 of the public authorities  law,  as
   41  added  by  section 3 of subpart C of part S of chapter 57 of the laws of
   42  2010, is amended to read as follows:
   43    4. (A) Within thirty days of the date that the authority designates  a
   44  project  operator  or  other person to act as agent of the authority for
   45  purposes of providing financial assistance consisting of any  sales  and
   46  compensating  use  tax exemption to such person, the agency shall file a
   47  statement with the department of taxation and finance relating  thereto,
   48  on  a  form  and  in such manner as is prescribed by the commissioner of
   49  taxation and finance, identifying  each  such  agent  so  named  by  the
   50  authority, setting forth the taxpayer identification number of each such
   51  agent,  giving  a  brief  description  of  the  property and/or services
   52  intended to be exempted from such taxes as a result of such  appointment
   53  as  agent, indicating the authority's rough estimate of the value of the
   54  property and/or services to which such  appointment  as  agent  relates,
   55  indicating  the date when such designation as agent became effective and
   56  indicating the date upon which such designation as agent shall cease.
       S. 2609                            69                            A. 3009
    1    (B) WITHIN THIRTY DAYS OF THE DATE THAT  THE  AUTHORITY'S  DESIGNATION
    2  DESCRIBED  IN PARAGRAPH (A) OF THIS SUBDIVISION HAS BEEN AMENDED, TERMI-
    3  NATED, BEEN REVOKED, OR BECOME INVALID OR INEFFECTIVE  FOR  ANY  REASON,
    4  THE AUTHORITY SHALL FILE A STATEMENT WITH THE DEPARTMENT OF TAXATION AND
    5  FINANCE  RELATING THERETO, ON A FORM AND IN SUCH MANNER AS IS PRESCRIBED
    6  BY THE COMMISSIONER OF TAXATION AND FINANCE, IDENTIFYING EACH SUCH AGENT
    7  SO NAMED BY THE AUTHORITY IN THE ORIGINAL DESIGNATION AND SETTING  FORTH
    8  THE  TAXPAYER IDENTIFICATION NUMBER AND OTHER IDENTIFYING INFORMATION OF
    9  EACH SUCH AGENT, THE DATE AS  OF  WHICH  THE  ORIGINAL  DESIGNATION  WAS
   10  AMENDED,  TERMINATED,  REVOKED, OR BECAME INVALID OR INEFFECTIVE AND THE
   11  REASON THEREFOR, TOGETHER WITH A COPY OF THE ORIGINAL DESIGNATION.
   12    S 10. Severability. If any provision of this act shall for any  reason
   13  be  finally adjudged by any court of competent jurisdiction to be inval-
   14  id, such judgment shall not affect, impair, or invalidate the  remainder
   15  of  this  act,  but  shall be confined in its operation to the provision
   16  directly involved in the controversy in which such judgment  shall  have
   17  been rendered. It is hereby declared to be the intent of the legislature
   18  that this act would have been enacted even if such invalid provision had
   19  not been included in this act.
   20    S  11.  This  act shall take effect immediately and shall apply to (a)
   21  any project established, agent or project operator appointed,  financial
   22  assistance  provided,  and agreement regarding payments in lieu of taxes
   23  entered into, on or after the date this act shall have become a law, (b)
   24  any amendment or revision made on or after the date this act shall  have
   25  become  a  law  to  any  project  established, agent or project operator
   26  appointed, financial assistance provided, or payment in  lieu  of  taxes
   27  entered  into,  prior to that date, (c) any state sales and compensating
   28  use tax exemption benefits recovered, recaptured, received, or otherwise
   29  obtained by an industrial development agency or authority established by
   30  the general municipal law or created by the public authorities law on or
   31  after such date, and (d) any payments in lieu of state sales and compen-
   32  sating use taxes of such an industrial development agency  or  authority
   33  receives on or after such date.
   34                                   PART K
   35    Section  1. Paragraph 42 of subdivision (a) of section 1115 of the tax
   36  law, as added by section 11 of part W-1 of chapter 109 of  the  laws  of
   37  2006, is amended to read as follows:
   38    (42)  E85, CNG or hydrogen, for use or consumption directly and exclu-
   39  sively in the engine of a motor vehicle AND NATURAL  GAS  PURCHASED  AND
   40  CONVERTED  INTO CNG, FOR USE OR FOR SALE FOR USE OR CONSUMPTION DIRECTLY
   41  AND EXCLUSIVELY IN THE ENGINE OF A MOTOR VEHICLE.
   42    S 2. This act shall take effect on the first day of a sales tax  quar-
   43  terly period, as described in subdivision (b) of section 1136 of the tax
   44  law,  next  commencing  after this act shall have become a law and shall
   45  apply in accordance  with  the  applicable  transitional  provisions  in
   46  sections  1106  and  1217  of  the  tax law; provided, however, that the
   47  amendments to paragraph 42 of subdivision (a) of section 1115 of the tax
   48  law made by section one of this act shall not affect the repeal of  such
   49  paragraph and shall be deemed repealed therewith.
   50                                   PART L
   51    Section  1.  Section  301-c  of the tax law is amended by adding a new
   52  subdivision (p) to read as follows:
       S. 2609                            70                            A. 3009
    1    (P) REIMBURSEMENT FOR MOTOR FUEL AND  DIESEL  MOTOR  FUEL  USED  BY  A
    2  VOLUNTARY AMBULANCE SERVICE, AS DEFINED IN SECTION THREE THOUSAND ONE OF
    3  THE  PUBLIC  HEALTH LAW, A FIRE COMPANY OR A FIRE DEPARTMENT, AS DEFINED
    4  IN SECTION THREE OF THE VOLUNTEER FIREFIGHTERS' BENEFIT LAW, OR A VOLUN-
    5  TEER RESCUE SQUAD SUPPORTED IN WHOLE OR IN PART BY TAX MONIES, WHERE ANY
    6  SUCH  ENTITY  IS THE PURCHASER, USER OR CONSUMER OF MOTOR FUEL OR DIESEL
    7  MOTOR FUEL IN A VEHICLE OWNED AND  OPERATED  BY  SUCH  ENTITY  AND  USED
    8  EXCLUSIVELY  FOR  SUCH  ENTITY'S PURPOSES. A PURCHASER SHALL BE ELIGIBLE
    9  FOR REIMBURSEMENT OF THE TAX IMPOSED PURSUANT TO THIS ARTICLE IF (1) ANY
   10  TAX IMPOSED PURSUANT TO THIS ARTICLE HAS BEEN PAID WITH RESPECT TO  SUCH
   11  GALLONAGE  AND  THE  ENTIRE AMOUNT OF SUCH TAX HAS BEEN ABSORBED BY SUCH
   12  PURCHASER, AND (2) SUCH PURCHASER POSSESSES DOCUMENTARY PROOF  SATISFAC-
   13  TORY  TO THE COMMISSIONER EVIDENCING THE ABSORPTION BY SUCH PURCHASER OF
   14  THE ENTIRE AMOUNT OF SUCH TAX. PROVIDED,  THAT  THE  COMMISSIONER  SHALL
   15  REQUIRE SUCH DOCUMENTARY PROOF TO QUALIFY FOR ANY REIMBURSEMENT PROVIDED
   16  HEREUNDER AS THE COMMISSIONER DEEMS APPROPRIATE.
   17    S  2.  This  act shall take effect on the first day of the first month
   18  next succeeding the sixtieth day after it shall have become a law.
   19                                   PART M
   20    Section 1. Subparagraphs (A) and (B) of paragraph 4 of subdivision (a)
   21  of section 1134 of the tax law, subparagraph (A) as amended  by  section
   22  21-a of part U of chapter 61 of the laws of 2011 and subparagraph (B) as
   23  amended  by  chapter  2  of  the  laws  of  1995, are amended to read as
   24  follows:
   25    (A) Where a person who holds a certificate of authority (i)  willfully
   26  fails to file a report or return required by this article, (ii) willful-
   27  ly  files,  causes  to  be  filed, gives or causes to be given a report,
   28  return, certificate or affidavit required under this  article  which  is
   29  false,  (iii) willfully fails to comply with the provisions of paragraph
   30  two or three of subdivision (e) of section eleven  hundred  thirty-seven
   31  of  this  article,  (iv)  willfully fails to prepay, collect, truthfully
   32  account for or pay over any tax imposed under this article  or  pursuant
   33  to  the  authority  of article twenty-nine of this chapter, (v) fails to
   34  obtain a bond pursuant to paragraph two of subdivision  (e)  of  section
   35  eleven  hundred  thirty-seven  of  this  part, or fails to comply with a
   36  notice issued by the commissioner pursuant to paragraph  three  of  such
   37  subdivision,  [or]  (vi)  has  been convicted of a crime provided for in
   38  this chapter, OR UNDER THE PENAL LAW OF THIS STATE WHERE THE  UNDERLYING
   39  CONDUCT  CONSTITUTES  A  CRIME  UNDER THIS CHAPTER, OR IS CONVICTED OF A
   40  CRIMINAL OFFENSE OF THE UNITED STATES, ANY OTHER STATE, OR  A  POLITICAL
   41  SUBDIVISION  OF  THIS  STATE  OR ANY OTHER STATE, WHICH, IF COMMITTED IN
   42  THIS STATE, WOULD CONSTITUTE A SIMILAR CRIME UNDER THIS CHAPTER OR (VII)
   43  SUCH PERSON WOULD BE INELIGIBLE TO RECEIVE SUCH CERTIFICATE OF AUTHORITY
   44  PURSUANT TO CLAUSES (I), (II), (IV) OR (V) OF SUBPARAGRAPH (B)  OF  THIS
   45  PARAGRAPH,  the  commissioner  may revoke or suspend such certificate of
   46  authority and  all  duplicates  thereof.  Provided,  however,  that  the
   47  commissioner  may  revoke or suspend a certificate of authority based on
   48  the grounds set forth in clause (vi) of this subparagraph only where the
   49  conviction referred to occurred not more  than  [one  year]  FIVE  YEARS
   50  prior to the date of revocation or suspension.
   51    (B)  Where  a person files a certificate of registration for a certif-
   52  icate of authority under this subdivision and in considering such appli-
   53  cation the commissioner ascertains that (i) any tax imposed  under  this
   54  chapter  or  any related statute, as defined in section eighteen hundred
       S. 2609                            71                            A. 3009
    1  of this chapter, has been finally determined to be due from such  person
    2  and  has not been paid in full, (ii) [a] ANY tax [due under this article
    3  or any law, ordinance or resolution enacted pursuant to the authority of
    4  article  twenty-nine]  IMPOSED  BY  OR PURSUANT TO THE AUTHORITY OF THIS
    5  CHAPTER OR ANY RELATED STATUTE AS DEFINED IN SECTION EIGHTEEN HUNDRED of
    6  this chapter has been finally determined to  be  due  from  an  officer,
    7  director,  partner or employee of such person, and, where such person is
    8  a limited liability company, also a member or manager of such person, in
    9  the officer's, director's, partner's, member's, manager's or  employee's
   10  capacity as a person required to collect tax on behalf of such person or
   11  another  person  and  has  not  been  paid,  (iii)  such person has been
   12  convicted of a crime provided for in this chapter, OR  UNDER  THE  PENAL
   13  LAW OF THIS STATE WHERE THE UNDERLYING CONDUCT CONSTITUTES A CRIME UNDER
   14  THIS  CHAPTER,  OR  IS  CONVICTED  OF  A  CRIMINAL OFFENSE OF THE UNITED
   15  STATES, ANY OTHER STATE, OR A POLITICAL SUBDIVISION OF THIS STATE OR ANY
   16  OTHER STATE, WHICH, IF COMMITTED IN THIS STATE, WOULD CONSTITUTE A SIMI-
   17  LAR CRIME UNDER THIS CHAPTER within [one year] FIVE YEARS from the  date
   18  on  which  such  certificate  of registration is filed, (iv) an officer,
   19  director, partner or employee of such person, and, where such person  is
   20  a  limited  liability  company, also a member or manager of such person,
   21  which officer, director, partner,  member,  manager  or  employee  is  a
   22  person required to collect tax on behalf of such person filing a certif-
   23  icate  of  registration  has  in  the  officer's, director's, partner's,
   24  member's, manager's or employee's  capacity  as  a  person  required  to
   25  collect tax on behalf of such person or of another person been convicted
   26  of  a  crime [provided for in this chapter] SET FORTH IN CLAUSE (III) OF
   27  THIS SUBPARAGRAPH WHERE THE CONVICTION REFERRED TO OCCURRED within  [one
   28  year] FIVE YEARS from the date on which such certificate of registration
   29  is filed, (v) a shareholder owning more than fifty percent of the number
   30  of  shares  of stock of such person (where such person is a corporation)
   31  entitling the holder thereof to vote for the election  of  directors  or
   32  trustees,  OR  A  PERSON  HAVING  MORE  THAN FIFTY PERCENT OF THE VOTING
   33  RIGHTS OF SUCH PERSON (WHERE SUCH PERSON IS A LIMITED  LIABILITY  COMPA-
   34  NY),  OR  A PERSON HAVING A CONTROLLING INTEREST IN ANY FORM OF PARTNER-
   35  SHIP (CONTROLLING INTEREST MEANING MORE THAN FIFTY PERCENT OF THE  CAPI-
   36  TAL,  PROFITS OR BENEFICIAL INTEREST IN SUCH PARTNERSHIP) who owned more
   37  than fifty percent of the number of such shares of another person (where
   38  such other person is a corporation), OR HAD MORE THAN FIFTY  PERCENT  OF
   39  THE  VOTING  RIGHTS  OF  A LIMITED LIABILITY COMPANY, OR HAD CONTROLLING
   40  INTEREST IN ANY FORM OF PARTNERSHIP (CONTROLLING INTEREST  MEANING  MORE
   41  THAN  FIFTY  PERCENT  OF  THE CAPITAL, PROFITS OR BENEFICIAL INTEREST IN
   42  SUCH PARTNERSHIP) at the time any tax imposed under this chapter or  any
   43  related  statute  as defined in section eighteen hundred of this chapter
   44  was finally determined to  be  due  FROM  SUCH  CORPORATION  OR  LIMITED
   45  LIABILITY  COMPANY  and  where such tax has not been paid in full, or at
   46  the time such other person was convicted of a  crime  [provided  for  in
   47  this  chapter]  SET FORTH IN CLAUSE (III) OF THIS SUBPARAGRAPH WHERE THE
   48  CONVICTION REFERRED TO OCCURRED within [one year] FIVE  YEARS  from  the
   49  date  on  which  such  certificate of registration is filed, [or] (vi) a
   50  certificate of authority issued to  such  person  has  been  revoked  or
   51  suspended  pursuant  to  subparagraph  (A) of this paragraph within [one
   52  year] THREE YEARS from the date on which such certificate  of  registra-
   53  tion  is  filed,  (VII)  A  CERTIFICATE OF AUTHORITY ISSUED TO ANY OTHER
   54  PERSON HAS BEEN REVOKED OR SUSPENDED PURSUANT  TO  SUBPARAGRAPH  (A)  OF
   55  THIS  PARAGRAPH  WITHIN  THREE YEARS FROM THE DATE ON WHICH SUCH CERTIF-
   56  ICATE OF REGISTRATION IS FILED AND AN OFFICER, DIRECTOR, MEMBER,  MANAG-
       S. 2609                            72                            A. 3009
    1  ER, PARTNER OR EMPLOYEE OF SUCH PERSON WAS, AT THAT TIME OF SUCH REVOCA-
    2  TION, A PERSON REQUIRED TO COLLECT TAX ON BEHALF OF SUCH PERSON AND SUCH
    3  OFFICER,  DIRECTOR,  MEMBER,  MANAGER,  PARTNER  OR EMPLOYEE IS A PERSON
    4  REQUIRED  TO COLLECT TAX ON BEHALF OF THE PERSON FILING A CERTIFICATE OF
    5  REGISTRATION, OR (VIII) SUCH PERSON HAS COMMITTED  AN  ACT  WHICH  WOULD
    6  GIVE  THE  COMMISSIONER  THE AUTHORITY TO REVOKE OR SUSPEND SUCH CERTIF-
    7  ICATE PURSUANT TO CLAUSE (I), (II), (III), (IV), OR (V) OF  SUBPARAGRAPH
    8  (A)  OF  THIS  PARAGRAPH, the commissioner may refuse to issue a certif-
    9  icate of authority.
   10    S 2. Subparagraph (A) of paragraph 4 of  subdivision  (a)  of  section
   11  1134  of  the  tax  law, as amended by chapter 2 of the laws of 1995, is
   12  amended to read as follows:
   13    (A) Where a person who holds a certificate of authority (i)  willfully
   14  fails to file a report or return required by this article, (ii) willful-
   15  ly  files,  causes  to  be  filed, gives or causes to be given a report,
   16  return, certificate or affidavit required under this  article  which  is
   17  false,  (iii) willfully fails to comply with the provisions of paragraph
   18  two or three of subdivision (e) of section eleven  hundred  thirty-seven
   19  of  this  article,  (iv)  willfully fails to prepay, collect, truthfully
   20  account for or pay over any tax imposed under this article  or  pursuant
   21  to  the  authority  of article twenty-nine of this chapter, [or] (v) has
   22  been convicted of a crime provided for in this  chapter,  OR  UNDER  THE
   23  PENAL LAW OF THIS STATE WHERE THE UNDERLYING CONDUCT CONSTITUTES A CRIME
   24  UNDER  THIS CHAPTER, OR IS CONVICTED OF A CRIMINAL OFFENSE OF THE UNITED
   25  STATES, ANY OTHER STATE, OR A POLITICAL SUBDIVISION OF THIS STATE OR ANY
   26  OTHER STATE, WHICH, IF COMMITTED IN THIS STATE, WOULD CONSTITUTE A SIMI-
   27  LAR CRIME UNDER THIS CHAPTER, OR (VI) SUCH PERSON WOULD BE INELIGIBLE TO
   28  RECEIVE SUCH CERTIFICATE OF AUTHORITY PURSUANT  TO  CLAUSES  (I),  (II),
   29  (IV)  OR (V) OF SUBPARAGRAPH (B) OF THIS PARAGRAPH, the commissioner may
   30  revoke or suspend such certificate of authority and all duplicates ther-
   31  eof. Provided, however, that the commissioner may revoke  or  suspend  a
   32  certificate of authority based on the grounds set forth in clause (v) of
   33  this  subparagraph  only  where  the conviction referred to occurred not
   34  more than [one year] FIVE YEARS prior  to  the  date  of  revocation  or
   35  suspension.
   36    S  3.  Subparagraphs  (C)  and  (E)  of paragraph 4 and paragraph 5 of
   37  subdivision (a) of section 1134 of the tax law, as amended by chapter  2
   38  of the laws of 1995, are amended to read as follows:
   39    (C)  In  any  of  the  foregoing  instances where the commissioner may
   40  suspend or revoke or refuse to issue a  certificate  of  authority,  the
   41  commissioner may condition the retention or issuance of a certificate of
   42  authority upon (I) the filing of a bond [or], (II) the deposit of tax in
   43  the  manner  provided  in  paragraph  two or three of subdivision (e) of
   44  section eleven hundred thirty-seven OF THIS PART, (III)  NOTWITHSTANDING
   45  PARAGRAPH  TWO  OF SUBDIVISION (A) OF THIS SECTION, THE ISSUANCE OF SUCH
   46  CERTIFICATE FOR A SPECIFIED TERM OF LESS  THAN  THREE  YEARS,  (IV)  THE
   47  FILING  OF  PART-QUARTERLY RETURNS PURSUANT TO PARAGRAPH TWO OF SUBDIVI-
   48  SION (A) OF SECTION ELEVEN HUNDRED THIRTY-SIX  OF  THIS  PART,  (V)  THE
   49  FILING OF ANY UNFILED RETURNS, (VI) ENTERING INTO AN INSTALLMENT PAYMENT
   50  AGREEMENT  OR  OTHERWISE MAKING PAYMENT ARRANGEMENTS SATISFACTORY TO THE
   51  COMMISSIONER, AND/OR (VII) SUCH OTHER  TERMS  AS  THE  COMMISSIONER  AND
   52  APPLICANT MAY AGREE TO.
   53    (E) After the commissioner has suspended or revoked a person's certif-
   54  icate  of  authority,  by  a  notice of suspension or revocation, or has
   55  refused to issue a certificate of authority, by a notice of refusal,  to
   56  such  person  and such decision has become final as provided for in this
       S. 2609                            73                            A. 3009
    1  paragraph, or after a person's certificate of authority has expired,  OR
    2  A  PERSON  WAS  NOTIFIED THAT SUCH PERSON'S CERTIFICATE OF AUTHORITY WAS
    3  DEEMED TO EXPIRE PURSUANT TO PARAGRAPH FIVE OF SUBDIVISION (A)  OF  THIS
    4  SECTION and such person has failed to renew such certificate or obtain a
    5  new  certificate of authority, OR WHERE A PERSON REQUIRED TO COLLECT TAX
    6  HAS FAILED TO APPLY FOR SUCH CERTIFICATE OF AUTHORITY, ANY  such  person
    7  is  prohibited  from  engaging in any business in this state for which a
    8  certificate of authority is required.  If despite such prohibition  such
    9  person  continues  to  be  so  engaged in business, the commissioner may
   10  bring an action to enjoin such person from so engaging in business.   NO
   11  SUCH  ACTION  SHALL BE INSTITUTED BY THE COMMISSIONER BEFORE THE COMMIS-
   12  SIONER GIVES NOTICE TO THE ATTORNEY GENERAL APPRISING HIM OR HER OF SUCH
   13  ACTION AND THE NATURE AND PURPOSE THEREOF, SO THAT THE ATTORNEY  GENERAL
   14  MAY  PARTICIPATE  OR JOIN THEREIN IF IN HIS OR HER OPINION THE INTERESTS
   15  OF THE STATE SO WARRANT, AND THE COMMISSIONER  MAY  NOT  INSTITUTE  SUCH
   16  ACTION  UNTIL  TWO  WEEKS  AFTER  PROVIDING  SUCH NOTICE TO THE ATTORNEY
   17  GENERAL.
   18    (5) If the commissioner considers it necessary for the proper adminis-
   19  tration of the sales and use taxes and prepaid  taxes  imposed  by  this
   20  article  and  pursuant  to  the authority of article twenty-nine of this
   21  chapter, it may require every  person  under  this  section  or  section
   22  twelve  hundred  fifty-three  of this chapter who holds a certificate of
   23  authority to file a new certificate of registration in such form and  at
   24  such  time  as  the  commissioner  may  prescribe  and to surrender such
   25  certificate of authority. The commissioner may require such  filing  and
   26  such  surrender  not more often than once every three years; HOWEVER, IN
   27  ANY INSTANCE WHERE A HOLDER OF A CERTIFICATE OF AUTHORITY HAS FAILED  TO
   28  FILE  A  SALES TAX RETURN AS REQUIRED BY THIS CHAPTER FOR A PERIOD OF AT
   29  LEAST ONE YEAR SUCH CERTIFICATE SHALL BE DEEMED EXPIRED AND THE  COMMIS-
   30  SIONER  SHALL REQUIRE A NEW CERTIFICATE OF REGISTRATION PURSUANT TO THIS
   31  SUBDIVISION. Upon the filing of such certificate of registration and, TO
   32  THE EXTENT REQUIRED BY THE COMMISSIONER, the surrender of  such  certif-
   33  icate  of  authority,  the commissioner shall issue, within such time as
   34  the commissioner may prescribe, a new certificate of authority,  without
   35  charge,  to  each registrant and a duplicate thereof for each additional
   36  place of business of such registrant.
   37    S 4. Subparagraph (i) of paragraph 3 of  subdivision  (a)  of  section
   38  1145 of the tax law, as amended by section 48 of part K of chapter 61 of
   39  the laws of 2011, is amended to read as follows:
   40    (i)  Any  person  required  to obtain a certificate of authority under
   41  section eleven hundred thirty-four of this part who, without  possessing
   42  a  valid  certificate of authority, (A) sells tangible personal property
   43  or services subject to tax, receives amusement  charges  or  operates  a
   44  hotel, (B) purchases or sells tangible personal property for resale, (C)
   45  sells  petroleum products, or (D) sells cigarettes shall, in addition to
   46  any other penalty imposed by this chapter, be subject to a penalty in an
   47  amount [not exceeding] OF five hundred dollars [for  the  first]  A  day
   48  FROM  THE  FIRST DAY on which such sales or purchases are made, [plus an
   49  amount not exceeding two hundred dollars  for  each  subsequent  day  on
   50  which  such  sales  or  purchases  are made,] not to exceed [ten] TWENTY
   51  thousand dollars in the aggregate. THE  WILLFUL  FAILURE  TO  OBTAIN  OR
   52  MAINTAIN  A VALID CERTIFICATE OF AUTHORITY SHALL BE SUBJECT TO A PENALTY
   53  IN AN AMOUNT OF ONE THOUSAND DOLLARS A DAY FROM THE FIRST DAY SUCH SALES
   54  OR PURCHASES ARE MADE, NOT TO  EXCEED  FIFTY  THOUSAND  DOLLARS  IN  THE
   55  AGGREGATE,  IN  ADDITION  TO THE PENALTIES IMPOSED BY SUBDIVISION (B) OF
   56  SECTION EIGHTEEN HUNDRED SEVENTEEN OF THIS ARTICLE, OR ANY OTHER PENALTY
       S. 2609                            74                            A. 3009
    1  IMPOSED BY THIS CHAPTER. FOR THE PURPOSES OF THIS SECTION,  THE  PENALTY
    2  FOR  THE  WILLFUL  FAILURE  TO OBTAIN OR MAINTAIN A VALID CERTIFICATE OF
    3  AUTHORITY SHALL BE ALTERNATE  TO  THE  TWENTY  THOUSAND  DOLLAR  PENALTY
    4  DESCRIBED  ABOVE,  AND THE TERM "WILLFUL" SHALL HAVE THE SAME MEANING AS
    5  "WILLFULLY" AS DEFINED IN SUBDIVISION (C) OF  SECTION  EIGHTEEN  HUNDRED
    6  ONE OF THIS CHAPTER.
    7    S  5. Subparagraphs (ii), (iii) and (iv) of paragraph 3 of subdivision
    8  (a) of section 1145 of the tax law, as amended by chapter 65 of the laws
    9  of 1985, are amended to read as follows:
   10    (ii) Any person who fails to surrender a certificate of authority when
   11  a notice of revocation, EXPIRATION or suspension has become final shall,
   12  in addition to any other penalty imposed by this chapter, be subject  to
   13  a penalty in an amount not exceeding five hundred dollars [for the first
   14  day  of such failure, together with a penalty in an amount not exceeding
   15  two hundred dollars for each subsequent] A day [of]  FOR  such  failure,
   16  not to exceed [ten] TWENTY thousand dollars in the aggregate.
   17    (iii)  Any person described in paragraph one or two of subdivision (a)
   18  of section eleven hundred thirty-four OF THIS PART who takes  possession
   19  of  or  pays for business assets under circumstances requiring notifica-
   20  tion by such person to the [tax  commission]  COMMISSIONER  pursuant  to
   21  subdivision (c) of section eleven hundred forty-one OF THIS PART without
   22  having  filed  a  certificate of registration pursuant to section eleven
   23  hundred thirty-four OF THIS PART shall, in addition to any other penalty
   24  imposed by this chapter, be subject  to  a  penalty  in  an  amount  not
   25  exceeding two [hundred] THOUSAND dollars.
   26    (iv)  If the [tax commission] COMMISSIONER determines that any failure
   27  or act described in this paragraph was due to reasonable cause  and  not
   28  due  to  willful  neglect,  [it] HE OR SHE may remit all or part of such
   29  penalty. PROVIDED, HOWEVER, THIS CLAUSE SHALL NOT APPLY TO A PENALTY FOR
   30  THE WILLFUL FAILURE TO OBTAIN A CERTIFICATE OF AUTHORITY.
   31    S 6. Paragraph 4 of subdivision (a) of section 1145 of the tax law, as
   32  amended by chapter 65 of the  laws  of  1985,  is  amended  to  read  as
   33  follows:
   34    (4)  Any  person  required by this article to display a certificate of
   35  authority, who fails to display such certificate in the manner  required
   36  by  this  article  or any rule or regulation adopted by the [tax commis-
   37  sion] COMMISSIONER in connection with such requirement shall,  in  addi-
   38  tion  to  any  other  penalty  imposed  by this chapter, be subject to a
   39  penalty of [fifty] ONE HUNDRED dollars. If the [tax commission]  COMMIS-
   40  SIONER determines that such failure was due to reasonable cause [and not
   41  due  to  willful  neglect], [it] HE OR SHE may remit all or part of such
   42  penalty.
   43    S 7. Subdivision (g) of section 1146 of the tax law, as added by chap-
   44  ter 577 of the laws of 1997, is amended to read as follows:
   45    (g) (1) Notwithstanding the provisions  of  subdivision  (a)  of  this
   46  section,  if  the  commissioner  determines  that  a  person required to
   47  collect tax is liable for any tax, penalty or interest under this  arti-
   48  cle  or  is liable for a penalty under subdivision (e) of section eleven
   49  hundred forty-five of this [article] PART with respect to  any  failure,
   50  upon  request in writing of such person, the commissioner shall disclose
   51  in writing to such person  [(1)]  (I)  the  name  of  any  other  person
   52  required  to  collect  tax  or  any other person liable for such penalty
   53  under such subdivision (e) whom the commissioner has  determined  to  be
   54  liable  for  the  same tax, penalty or interest or for such penalty with
   55  respect to such failure, and [(2)] (II)  whether  the  commissioner  has
   56  attempted  to collect such tax, penalty or interest or such penalty from
       S. 2609                            75                            A. 3009
    1  such other person, the general nature of such collection activities, and
    2  the amount collected.
    3    (2) NOTWITHSTANDING ANY PROVISION OF THIS CHAPTER TO THE CONTRARY, FOR
    4  THE PURPOSES OF SUBPARAGRAPH (B) OF PARAGRAPH FOUR OF SUBDIVISION (A) OF
    5  SECTION  ELEVEN  HUNDRED  THIRTY-FOUR  OF THIS PART, IF THE COMMISSIONER
    6  DETERMINES THAT ANY TAX IMPOSED UNDER THIS CHAPTER OR ANY RELATED  STAT-
    7  UTE,  AS  DEFINED  IN SECTION EIGHTEEN HUNDRED OF THIS CHAPTER, HAS BEEN
    8  FINALLY DETERMINED TO BE DUE FROM A PERSON REQUIRED TO COLLECT  TAX  AND
    9  HAS  NOT  BEEN  PAID,  UPON  WRITTEN REQUEST OF THE PERSON WHO FILED THE
   10  CERTIFICATE OF REGISTRATION FOR A  CERTIFICATE  OF  AUTHORITY  THAT  WAS
   11  REFUSED,  THE  COMMISSIONER  MAY DISCLOSE TO SUCH PERSON THE NAME OF THE
   12  PERSON OR PERSONS REQUIRED TO COLLECT TAX WHOSE TAX LIABILITY OR LIABIL-
   13  ITIES WERE GROUNDS FOR THE REFUSAL TO ISSUE THE CERTIFICATE OF AUTHORITY
   14  AND THE AMOUNT OR AMOUNTS OF TAX DUE FOR EACH SUCH PERSON OR PERSONS.
   15    S 8. Subdivisions (a) and (b) of section  1817  of  the  tax  law,  as
   16  amended  by  section 53 of part K of chapter 61 of the laws of 2011, are
   17  amended to read as follows:
   18    (a) Any person required to obtain a  certificate  of  authority  under
   19  section eleven hundred thirty-four of this chapter who, without possess-
   20  ing  a  valid  certificate  of authority, OR POSSESSING A CERTIFICATE OF
   21  AUTHORITY THAT WAS DEEMED TO HAVE EXPIRED PURSUANT TO PARAGRAPH FIVE  OF
   22  SUBDIVISION  (A)  OF  SECTION ELEVEN HUNDRED THIRTY-FOUR OF THIS CHAPTER
   23  willfully (1) sells tangible personal property or  services  subject  to
   24  tax,  receives  amusement  charges or operates a hotel, (2) purchases or
   25  sells tangible personal property for  resale,  or  (3)  sells  petroleum
   26  products; and any person who fails to surrender a certificate of author-
   27  ity as required by such article shall be guilty of [a misdemeanor] CRIM-
   28  INAL TAX FRAUD IN THE FIFTH DEGREE.
   29    (b)  Any  person  required  to obtain a certificate of authority under
   30  section eleven hundred thirty-four of this chapter who within five years
   31  after a determination by the commissioner[,] pursuant to such section[,]
   32  to suspend, revoke or refuse to issue a  certificate  of  authority  has
   33  become  final,  OR  WAS  NOTIFIED  BY THE COMMISSIONER THAT THE PERSON'S
   34  CERTIFICATE OF AUTHORITY WAS DEEMED TO HAVE EXPIRED  PURSUANT  TO  PARA-
   35  GRAPH  FIVE  OF SUBDIVISION (A) OF SECTION ELEVEN HUNDRED THIRTY-FOUR OF
   36  THIS CHAPTER, and without possession of a valid certificate of authority
   37  WILLFULLY (1) sells tangible personal property or  services  subject  to
   38  tax,  receives  amusement  charges or operates a hotel, (2) purchases or
   39  sells tangible personal property for  resale,  or  (3)  sells  petroleum
   40  products,  shall  be guilty of [a misdemeanor] CRIMINAL TAX FRAUD IN THE
   41  FOURTH DEGREE.   It shall be an affirmative  defense  that  such  person
   42  performed  the  acts  described in this subdivision without knowledge of
   43  such determination. Any person who violates a provision of this subdivi-
   44  sion, upon conviction, shall be subject to a fine in any amount  author-
   45  ized  by  this article, but not less than five hundred dollars, in addi-
   46  tion to any other penalty provided by law.
   47    S 9. This act shall take effect immediately, provided that the  amend-
   48  ments  to  subparagraph (A) of paragraph 4 of subdivision (a) of section
   49  1134 of the tax law made by section one of this act shall be subject  to
   50  the expiration and reversion of such subparagraph pursuant to section 23
   51  of  part  U of chapter 61 of the laws of 2011, as amended when upon such
   52  date the provisions of section two of this act shall take effect.
   53                                   PART N
       S. 2609                            76                            A. 3009
    1    Section 1. Subdivision 1 of section 480-a of the tax law is amended by
    2  adding a new paragraph (f) to read as follows:
    3    (F)  WHEN A PERSON FILES AN APPLICATION FOR A CERTIFICATE OF REGISTRA-
    4  TION UNDER THIS SECTION, AND IN CONSIDERING SUCH APPLICATION THE COMMIS-
    5  SIONER ASCERTAINS THE EXISTENCE OF  ONE  OR  MORE  OF  THE  GROUNDS  FOR
    6  REFUSAL OF A CERTIFICATE OF AUTHORITY IN CLAUSES (I), (II), (III), (IV),
    7  AND  (V)  OF  SUBPARAGRAPH  (B)  OF PARAGRAPH FOUR OF SUBDIVISION (A) OF
    8  SECTION ELEVEN HUNDRED THIRTY-FOUR OF THIS CHAPTER, THE COMMISSIONER MAY
    9  REFUSE TO ISSUE  A  CERTIFICATE  OF  REGISTRATION.  NOTWITHSTANDING  ANY
   10  PROVISION  OF  THIS CHAPTER TO THE CONTRARY, IF THE COMMISSIONER REFUSES
   11  TO ISSUE A CERTIFICATE  OF  REGISTRATION  UNDER  THIS  SUBDIVISION,  THE
   12  COMMISSIONER SHALL UPON WRITTEN REQUEST OF THE PERSON FILING SUCH APPLI-
   13  CATION  DISCLOSE THE NAME OF THE PERSON OR PERSONS WHOSE TAX LIABILITIES
   14  WERE GROUNDS FOR THE REFUSAL TO ISSUE THE CERTIFICATE OF REGISTRATION.
   15    S 2.  Paragraph (d) of subdivision 2 of section 480-a of the tax  law,
   16  as  amended  by  chapter  760 of the laws of 1992, is amended to read as
   17  follows:
   18    (d) Except as otherwise provided in this section, all  the  provisions
   19  of article twenty-eight of this chapter relating to the personal liabil-
   20  ity  for  the  tax, administration, collection and determination of tax,
   21  and deposit and disposition of revenue, including section eleven hundred
   22  thirty-eight of this  chapter  relating  to  determination  of  tax  and
   23  section  eleven  hundred forty-five of this chapter (but only paragraphs
   24  one and two of subdivision (a) of such section)  relating  to  penalties
   25  and  interest  for  failure  to file a return or pay tax within the time
   26  required, shall apply to the applications for registration and the  fees
   27  for  filing  such  applications required by this section and the penalty
   28  imposed pursuant to subdivision three of this section, as if such appli-
   29  cations were returns required under section eleven hundred thirty-six of
   30  this chapter and such filing fees, penalties  and  interest  were  taxes
   31  required  to  be paid pursuant to such article twenty-eight, in the same
   32  manner and with the same force and effect as if  the  language  of  such
   33  provisions  of  such  article twenty-eight had been incorporated in full
   34  into this article, except to the  extent  that  any  such  provision  is
   35  either  inconsistent with a provision of this section or is not relevant
   36  thereto and with such other modifications as may be necessary  to  adapt
   37  the  language  of  such  provisions  to  the provisions of this section.
   38  [Section] EXCEPT AS PROVIDED FOR IN PARAGRAPH (F) OF SUBDIVISION ONE  OF
   39  THIS  SECTION,  SECTION eleven hundred thirty-four of such article twen-
   40  ty-eight shall not apply to this section. Provided,  however,  that  the
   41  commissioner  of taxation and finance shall refund or credit an applica-
   42  tion fee paid with respect to the registration of a vending machine or a
   43  retail place of business in  this  state  through  which  cigarettes  or
   44  tobacco  products  were  to  be  sold  if, prior to the beginning of the
   45  calendar year with respect  to  which  such  registration  relates,  the
   46  certificate  of registration described in paragraph (a) of this subdivi-
   47  sion is returned to the department of taxation and finance, or  if  such
   48  certificate  has  been  destroyed,  the retail dealer or vending machine
   49  operator satisfactorily accounts to the  commissioner  for  the  missing
   50  certificate,  but  such  vending machine or retail place of business may
   51  not be used to sell cigarettes or tobacco products in this state  during
   52  such  calendar  year,  unless  it  is  re-registered.  The provisions of
   53  section eleven hundred thirty-nine of this chapter shall  apply  to  the
   54  refund  or  credit  authorized  by  the  preceding sentence and for such
   55  purposes, such refund or credit shall be deemed a refund of tax paid  in
       S. 2609                            77                            A. 3009
    1  error  provided,  however,  no  interest shall be allowed or paid on any
    2  such refund.
    3    S 3. This act shall take effect immediately and shall apply to certif-
    4  icates  of  registration  applications  filed for calendar year 2014 and
    5  thereafter.
    6                                   PART O
    7    Section 1. Subparagraph (i) of  paragraph  (b)  of  subdivision  1  of
    8  section  481  of  the  tax law, as amended by chapter 604 of the laws of
    9  2008, is amended to read as follows:
   10    (i) In addition to any other penalty  imposed  by  this  article,  the
   11  commissioner may (A) impose a penalty of not more than [one] SIX hundred
   12  [fifty] dollars for each two hundred cigarettes, or fraction thereof, in
   13  excess  of  one  thousand  cigarettes in unstamped or unlawfully stamped
   14  packages in the possession or under the control of  any  person  or  (B)
   15  impose a penalty of not more than two hundred dollars for each ten unaf-
   16  fixed  false,  altered  or counterfeit cigarette tax stamps, imprints or
   17  impressions, or fraction thereof, in the possession or under the control
   18  of any person. In addition, the commissioner may impose a penalty of not
   19  more than seventy-five dollars for each fifty cigars  or  one  pound  of
   20  tobacco,  or  fraction thereof, in excess of two hundred fifty cigars or
   21  five pounds of tobacco in the possession or under  the  control  of  any
   22  person and a penalty of not more than one hundred fifty dollars for each
   23  fifty cigars or pound of tobacco, or fraction thereof, in excess of five
   24  hundred  cigars  or ten pounds of tobacco in the possession or under the
   25  control of any person, with respect to which the  tobacco  products  tax
   26  has  not been paid or assumed by a distributor or tobacco products deal-
   27  er; provided, however, that any such penalty imposed  shall  not  exceed
   28  seven  thousand  five hundred dollars in the aggregate. The commissioner
   29  may impose a penalty of not more  than  seventy-five  dollars  for  each
   30  fifty  cigars or one pound of tobacco, or fraction thereof, in excess of
   31  fifty cigars or one pound of tobacco in  the  possession  or  under  the
   32  control  of  any tobacco products dealer or distributor appointed by the
   33  commissioner, and a penalty of not more than one hundred  fifty  dollars
   34  for  each  fifty  cigars  or  pound  of tobacco, or fraction thereof, in
   35  excess of two hundred fifty cigars or five  pounds  of  tobacco  in  the
   36  possession  or under the control of any such dealer or distributor, with
   37  respect to which the tobacco products tax has not been paid  or  assumed
   38  by  a  distributor or a tobacco products dealer; provided, however, that
   39  any such penalty imposed shall not exceed fifteen  thousand  dollars  in
   40  the aggregate.
   41    S 2. This act shall take effect June 1, 2013.
   42                                   PART P
   43    Section  1.  The  tax  law is amended by adding a new section 171-v to
   44  read as follows:
   45    S 171-V. ENFORCEMENT OF DELINQUENT TAX LIABILITIES THROUGH THE SUSPEN-
   46  SION OF DRIVERS' LICENSES. (1) THE COMMISSIONER SHALL ENTER INTO A WRIT-
   47  TEN AGREEMENT WITH THE COMMISSIONER OF MOTOR VEHICLES, WHICH  SHALL  SET
   48  FORTH  THE  PROCEDURES FOR THE TWO DEPARTMENTS TO COOPERATE IN A PROGRAM
   49  TO IMPROVE TAX COLLECTION THROUGH THE SUSPENSION OF DRIVERS' LICENSES OF
   50  TAXPAYERS WITH PAST-DUE TAX LIABILITIES EQUAL TO OR  IN  EXCESS  OF  TEN
   51  THOUSAND  DOLLARS.    FOR  THE  PURPOSES  OF THIS SECTION, THE TERM "TAX
   52  LIABILITIES" SHALL MEAN ANY TAX, SURCHARGE, OR FEE ADMINISTERED  BY  THE
       S. 2609                            78                            A. 3009
    1  COMMISSIONER, OR ANY PENALTY OR INTEREST DUE ON THESE AMOUNTS OWED BY AN
    2  INDIVIDUAL WITH A NEW YORK DRIVER'S LICENSE, THE TERM "DRIVER'S LICENSE"
    3  MEANS ANY LICENSE ISSUED BY THE DEPARTMENT OF MOTOR VEHICLES, EXCEPT FOR
    4  A  COMMERCIAL  DRIVER'S LICENSE AS DEFINED IN SECTION FIVE HUNDRED ONE-A
    5  OF THE VEHICLE AND TRAFFIC LAW, AND THE TERM "PAST-DUE TAX  LIABILITIES"
    6  MEANS ANY TAX LIABILITY OR LIABILITIES WHICH HAVE BECOME FIXED AND FINAL
    7  SUCH  THAT  THE  TAXPAYER  NO  LONGER HAS ANY RIGHT TO ADMINISTRATIVE OR
    8  JUDICIAL REVIEW.
    9    (2) THE AGREEMENT SHALL INCLUDE THE FOLLOWING PROVISIONS:
   10    (A) THE PROCEDURES BY WHICH THE DEPARTMENT SHALL  NOTIFY  THE  COMMIS-
   11  SIONER  OF  MOTOR  VEHICLES  OF TAXPAYERS WITH PAST-DUE TAX LIABILITIES,
   12  INCLUDING THE PROCEDURES BY WHICH THE DEPARTMENT AND THE  DEPARTMENT  OF
   13  MOTOR  VEHICLES  SHALL SHARE THE INFORMATION NECESSARY TO IDENTIFY INDI-
   14  VIDUALS WITH PAST-DUE TAX LIABILITIES, WHICH SHALL INCLUDE A  TAXPAYER'S
   15  NAME,  SOCIAL  SECURITY  NUMBER,  AND ANY OTHER INFORMATION NECESSARY TO
   16  ENSURE THE PROPER IDENTIFICATION OF THE TAXPAYER;
   17    (B) THE PROCEDURES BY WHICH THE COMMISSIONER SHALL NOTIFY THE  DEPART-
   18  MENT OF MOTOR VEHICLES THAT A TAXPAYER HAS SATISFIED HIS OR HER PAST-DUE
   19  TAX LIABILITIES, OR HAS ENTERED INTO AN INSTALLMENT PAYMENT AGREEMENT OR
   20  HAS  OTHERWISE MADE PAYMENT ARRANGEMENTS SATISFACTORY TO THE COMMISSION-
   21  ER, SO THAT THE SUSPENSION OF THE TAXPAYER'S  DRIVER'S  LICENSE  MAY  BE
   22  LIFTED; AND
   23    (C)  ANY OTHER MATTER THE DEPARTMENT AND THE DEPARTMENT OF MOTOR VEHI-
   24  CLES SHALL DEEM NECESSARY TO CARRY OUT THE PROVISIONS OF THIS SECTION.
   25    (3) THE DEPARTMENT SHALL PROVIDE NOTICE TO THE TAXPAYER OF HIS OR  HER
   26  INCLUSION  IN  THE  LICENSE  SUSPENSION PROGRAM NO LATER THAN FORTY-FIVE
   27  DAYS PRIOR TO THE DATE THE DEPARTMENT INTENDS TO INFORM THE COMMISSIONER
   28  OF MOTOR VEHICLES OF THE TAXPAYER'S INCLUSION. HOWEVER, NO  SUCH  NOTICE
   29  SHALL  BE  ISSUED  TO  A TAXPAYER WHOSE WAGES ARE BEING GARNISHED BY THE
   30  DEPARTMENT FOR THE PAYMENT OF PAST-DUE TAX LIABILITIES OR PAST-DUE CHILD
   31  SUPPORT OR COMBINED CHILD AND SPOUSAL SUPPORT ARREARS.  NOTICE SHALL  BE
   32  PROVIDED  BY  FIRST  CLASS  MAIL TO THE TAXPAYER'S LAST KNOWN ADDRESS AS
   33  SUCH ADDRESS APPEARS IN THE ELECTRONIC SYSTEMS OR RECORDS OF THE DEPART-
   34  MENT. SUCH NOTICE SHALL INCLUDE:
   35    (A) A CLEAR STATEMENT OF THE PAST-DUE TAX  LIABILITIES  ALONG  WITH  A
   36  STATEMENT  THAT  THE DEPARTMENT SHALL PROVIDE TO THE DEPARTMENT OF MOTOR
   37  VEHICLES THE TAXPAYER'S NAME, SOCIAL SECURITY NUMBER AND ANY OTHER IDEN-
   38  TIFYING INFORMATION NECESSARY FOR THE PURPOSE OF SUSPENDING HIS  OR  HER
   39  DRIVER'S  LICENSE  PURSUANT  TO  THIS  SECTION AND SUBDIVISION FOUR-F OF
   40  SECTION FIVE HUNDRED TEN OF THE VEHICLE AND TRAFFIC LAW FORTY-FIVE  DAYS
   41  AFTER THE MAILING OR SENDING OF SUCH NOTICE TO THE TAXPAYER;
   42    (B)  A  STATEMENT THAT THE TAXPAYER MAY AVOID SUSPENSION OF HIS OR HER
   43  LICENSE BY FULLY SATISFYING THE PAST-DUE TAX LIABILITIES  OR  BY  MAKING
   44  PAYMENT  ARRANGEMENTS  SATISFACTORY TO THE COMMISSIONER, AND INFORMATION
   45  AS TO HOW THE TAXPAYER CAN PAY  THE  PAST-DUE  TAX  LIABILITIES  TO  THE
   46  DEPARTMENT,  ENTER  INTO  A  PAYMENT  ARRANGEMENT  OR REQUEST ADDITIONAL
   47  INFORMATION;
   48    (C) A STATEMENT THAT THE TAXPAYER'S RIGHT TO  PROTEST  THE  NOTICE  IS
   49  LIMITED TO RAISING ISSUES SET FORTH IN SUBDIVISION FIVE OF THIS SECTION;
   50    (D) A STATEMENT THAT THE SUSPENSION OF THE TAXPAYER'S DRIVER'S LICENSE
   51  SHALL  CONTINUE UNTIL THE PAST-DUE TAX LIABILITIES ARE FULLY PAID OR THE
   52  TAXPAYER MAKES PAYMENT ARRANGEMENTS SATISFACTORY  TO  THE  COMMISSIONER;
   53  AND
   54    (E) ANY OTHER INFORMATION THAT THE COMMISSIONER DEEMS NECESSARY.
   55    (4) AFTER THE EXPIRATION OF THE FORTY-FIVE DAY PERIOD, IF THE TAXPAYER
   56  HAS  NOT  CHALLENGED  THE  NOTICE  PURSUANT  TO SUBDIVISION FIVE OF THIS
       S. 2609                            79                            A. 3009
    1  SECTION AND THE TAXPAYER HAS FAILED TO SATISFY THE PAST-DUE TAX  LIABIL-
    2  ITIES OR MAKE PAYMENT ARRANGEMENTS SATISFACTORY TO THE COMMISSIONER, THE
    3  DEPARTMENT  SHALL NOTIFY THE DEPARTMENT OF MOTOR VEHICLES, IN THE MANNER
    4  AGREED  UPON  BY  THE TWO AGENCIES, THAT THE TAXPAYER'S DRIVER'S LICENSE
    5  SHALL BE SUSPENDED  PURSUANT  TO  SUBDIVISION  FOUR-F  OF  SECTION  FIVE
    6  HUNDRED  TEN  OF  THE VEHICLE AND TRAFFIC LAW; PROVIDED, HOWEVER, IN ANY
    7  CASE WHERE A TAXPAYER FAILS TO  COMPLY  WITH  THE  TERMS  OF  A  CURRENT
    8  PAYMENT  ARRANGEMENT  MORE  THAN  ONCE WITHIN A TWELVE MONTH PERIOD, THE
    9  COMMISSIONER SHALL IMMEDIATELY NOTIFY THE DEPARTMENT OF  MOTOR  VEHICLES
   10  THAT THE TAXPAYER'S DRIVER'S LICENSE SHALL BE SUSPENDED.
   11    (5)  NOTWITHSTANDING ANY OTHER PROVISION OF LAW, AND EXCEPT AS SPECIF-
   12  ICALLY PROVIDED HEREIN, THE TAXPAYER SHALL HAVE NO RIGHT TO  COMMENCE  A
   13  COURT  ACTION  OR  PROCEEDING OR TO ANY OTHER LEGAL RECOURSE AGAINST THE
   14  DEPARTMENT OR THE DEPARTMENT OF MOTOR VEHICLES REGARDING A NOTICE ISSUED
   15  BY THE DEPARTMENT PURSUANT TO THIS  SECTION  AND  THE  REFERRAL  BY  THE
   16  DEPARTMENT  OF ANY TAXPAYER WITH PAST-DUE TAX LIABILITIES TO THE DEPART-
   17  MENT OF MOTOR VEHICLES PURSUANT TO  THIS  SECTION  FOR  THE  PURPOSE  OF
   18  SUSPENDING  THE  TAXPAYER'S  DRIVER'S LICENSE. A TAXPAYER MAY ONLY CHAL-
   19  LENGE SUCH SUSPENSION OR REFERRAL ON THE GROUNDS THAT (I) THE INDIVIDUAL
   20  TO WHOM THE NOTICE WAS PROVIDED IS NOT THE TAXPAYER AT ISSUE;  (II)  THE
   21  PAST-DUE  TAX LIABILITIES WERE SATISFIED; (III) THE TAXPAYER'S WAGES ARE
   22  BEING GARNISHED BY THE DEPARTMENT FOR THE PAYMENT OF  THE  PAST-DUE  TAX
   23  LIABILITIES AT ISSUE OR FOR PAST-DUE CHILD SUPPORT OR COMBINED CHILD AND
   24  SPOUSAL  SUPPORT  ARREARS; (IV) THE TAXPAYER'S WAGES ARE BEING GARNISHED
   25  FOR THE PAYMENT OF PAST-DUE CHILD SUPPORT OR COMBINED CHILD AND  SPOUSAL
   26  SUPPORT  ARREARS  PURSUANT  TO  AN  INCOME  EXECUTION ISSUED PURSUANT TO
   27  SECTION FIVE THOUSAND TWO HUNDRED FORTY-ONE OF THE  CIVIL  PRACTICE  LAW
   28  AND  RULES; (V) THE TAXPAYER'S DRIVER'S LICENSE IS A COMMERCIAL DRIVER'S
   29  LICENSE AS DEFINED IN SECTION FIVE HUNDRED  ONE-A  OF  THE  VEHICLE  AND
   30  TRAFFIC  LAW; OR (VI) THE DEPARTMENT INCORRECTLY FOUND THAT THE TAXPAYER
   31  HAS FAILED TO COMPLY WITH THE TERMS OF A PAYMENT ARRANGEMENT  MADE  WITH
   32  THE  COMMISSIONER  MORE  THAN  ONCE WITHIN A TWELVE MONTH PERIOD FOR THE
   33  PURPOSES OF SUBDIVISION THREE OF THIS SECTION.
   34    HOWEVER, NOTHING IN THIS SUBDIVISION IS INTENDED TO LIMIT  A  TAXPAYER
   35  FROM SEEKING RELIEF FROM JOINT AND SEVERAL LIABILITY PURSUANT TO SECTION
   36  SIX  HUNDRED FIFTY-FOUR OF THIS CHAPTER, TO THE EXTENT THAT HE OR SHE IS
   37  ELIGIBLE PURSUANT TO THAT SUBDIVISION, OR ESTABLISHING TO THE DEPARTMENT
   38  THAT THE ENFORCEMENT OF THE UNDERLYING TAX LIABILITIES HAS  BEEN  STAYED
   39  BY  THE  FILING  OF  A  PETITION PURSUANT TO THE BANKRUPTCY CODE OF 1978
   40  (TITLE ELEVEN OF THE UNITED STATES CODE).
   41    (6) NOTWITHSTANDING ANY PROVISION OF THIS CHAPTER TO THE CONTRARY, THE
   42  DEPARTMENT MAY DISCLOSE TO THE DEPARTMENT OF MOTOR VEHICLES THE INFORMA-
   43  TION DESCRIBED IN THIS SECTION THAT, IN THE DISCRETION  OF  THE  COMMIS-
   44  SIONER,  IS  NECESSARY  FOR  THE  PROPER  IDENTIFICATION  OF  A TAXPAYER
   45  REFERRED TO THE DEPARTMENT OF MOTOR VEHICLES FOR THE PURPOSE OF SUSPEND-
   46  ING THE TAXPAYER'S DRIVER'S LICENSE PURSUANT TO THIS SECTION AND  SUBDI-
   47  VISION  FOUR-F  OF  SECTION  FIVE HUNDRED TEN OF THE VEHICLE AND TRAFFIC
   48  LAW. THE DEPARTMENT OF MOTOR VEHICLES MAY NOT REDISCLOSE  THIS  INFORMA-
   49  TION  TO  ANY  OTHER  ENTITY  OR  PERSON,  OTHER THAN FOR THE PURPOSE OF
   50  INFORMING THE TAXPAYER  THAT  HIS  OR  HER  DRIVER'S  LICENSE  HAS  BEEN
   51  SUSPENDED.
   52    (7)  EXCEPT  AS  OTHERWISE PROVIDED IN THIS SECTION, THE ACTIVITIES TO
   53  COLLECT PAST-DUE TAX LIABILITIES UNDERTAKEN BY THE  DEPARTMENT  PURSUANT
   54  TO  THIS  SECTION  SHALL  NOT  IN  ANY WAY LIMIT, RESTRICT OR IMPAIR THE
   55  DEPARTMENT FROM EXERCISING ANY OTHER AUTHORITY TO COLLECT OR ENFORCE TAX
   56  LIABILITIES UNDER ANY OTHER APPLICABLE PROVISION OF LAW.
       S. 2609                            80                            A. 3009
    1    S 2. Section 510 of the vehicle and traffic law is amended by adding a
    2  new subdivision 4-f to read as follows:
    3    4-F.  SUSPENSION  FOR FAILURE TO PAY PAST-DUE TAX LIABILITIES. (1) THE
    4  COMMISSIONER SHALL ENTER INTO A WRITTEN AGREEMENT WITH THE  COMMISSIONER
    5  OF   TAXATION   AND   FINANCE,   AS  PROVIDED  IN  SECTION  ONE  HUNDRED
    6  SEVENTY-ONE-V OF THE TAX LAW, WHICH SHALL SET FORTH THE  PROCEDURES  FOR
    7  SUSPENDING  THE  DRIVERS'  LICENSES  OF  INDIVIDUALS  WHO HAVE FAILED TO
    8  SATISFY PAST-DUE TAX LIABILITIES AS  SUCH  TERMS  ARE  DEFINED  IN  SUCH
    9  SECTION.
   10    (2)  UPON  RECEIPT OF NOTIFICATION FROM THE DEPARTMENT OF TAXATION AND
   11  FINANCE THAT AN INDIVIDUAL HAS FAILED TO SATISFY  PAST-DUE  TAX  LIABIL-
   12  ITIES,  OR  TO  OTHERWISE  MAKE PAYMENT ARRANGEMENTS SATISFACTORY TO THE
   13  COMMISSIONER OF TAXATION AND FINANCE, OR HAS FAILED TO COMPLY  WITH  THE
   14  TERMS  OF SUCH PAYMENT ARRANGEMENTS MORE THAN ONCE WITHIN A TWELVE MONTH
   15  PERIOD, THE COMMISSIONER OR HIS OR HER AGENT SHALL SUSPEND  THE  LICENSE
   16  OF  SUCH  PERSON TO OPERATE A MOTOR VEHICLE. IN THE EVENT SUCH PERSON IS
   17  UNLICENSED, SUCH PERSON'S PRIVILEGE OF  OBTAINING  A  LICENSE  SHALL  BE
   18  SUSPENDED.  SUCH SUSPENSION SHALL TAKE EFFECT NO LATER THAN FIFTEEN DAYS
   19  FROM THE DATE OF THE NOTICE THEREOF PROVIDED TO THE PERSON WHOSE LICENSE
   20  OR PRIVILEGE OF OBTAINING A LICENSE IS TO BE SUSPENDED, AND SHALL REMAIN
   21  IN EFFECT UNTIL SUCH TIME AS THE COMMISSIONER IS ADVISED THAT THE PERSON
   22  HAS SATISFIED HIS OR HER PAST-DUE TAX LIABILITIES, OR HAS OTHERWISE MADE
   23  PAYMENT ARRANGEMENTS SATISFACTORY TO THE COMMISSIONER  OF  TAXATION  AND
   24  FINANCE.
   25    (3)  FROM  THE  TIME THE COMMISSIONER IS NOTIFIED BY THE DEPARTMENT OF
   26  TAXATION AND FINANCE UNDER  THIS  SECTION,  THE  COMMISSIONER  SHALL  BE
   27  RELIEVED  FROM  ALL  LIABILITY  TO SUCH PERSON WHICH MAY OTHERWISE ARISE
   28  UNDER THIS SECTION, AND SUCH PERSON SHALL HAVE NO RIGHT  TO  COMMENCE  A
   29  COURT  ACTION  OR  PROCEEDING OR TO ANY OTHER LEGAL RECOURSE AGAINST THE
   30  COMMISSIONER TO RECOVER SUCH DRIVING PRIVILEGES AS  AUTHORIZED  BY  THIS
   31  SECTION.  IN  ADDITION, NOTWITHSTANDING ANY OTHER PROVISION OF LAW, SUCH
   32  PERSON SHALL HAVE NO RIGHT TO A HEARING OR APPEAL PURSUANT TO THIS CHAP-
   33  TER WITH RESPECT TO A SUSPENSION OF DRIVING PRIVILEGES AS AUTHORIZED  BY
   34  THIS SECTION.
   35    (4)  NOTWITHSTANDING ANY PROVISION OF LAW TO THE CONTRARY, THE DEPART-
   36  MENT SHALL FURNISH THE DEPARTMENT  OF  TAXATION  AND  FINANCE  WITH  THE
   37  INFORMATION  NECESSARY  FOR  THE  PROPER IDENTIFICATION OF AN INDIVIDUAL
   38  REFERRED TO THE DEPARTMENT FOR THE PURPOSE OF DRIVER'S  LICENSE  SUSPEN-
   39  SION  PURSUANT  TO THIS SECTION AND SECTION ONE HUNDRED SEVENTY-ONE-V OF
   40  THE TAX LAW. THIS SHALL INCLUDE THE INDIVIDUAL'S NAME,  SOCIAL  SECURITY
   41  NUMBER  AND  ANY  OTHER  INFORMATION  THE COMMISSIONER OF MOTOR VEHICLES
   42  DEEMS NECESSARY.
   43    (5) ANY PERSON WHOSE DRIVER'S LICENSE IS SUSPENDED PURSUANT  TO  PARA-
   44  GRAPH TWO OF THIS SUBDIVISION MAY APPLY FOR THE ISSUANCE OF A RESTRICTED
   45  USE LICENSE AS PROVIDED IN SECTION FIVE HUNDRED THIRTY OF THIS TITLE.
   46    S  3.  Subdivision 7 of section 511 of the vehicle and traffic law, as
   47  added by chapter 81 of the laws of 1995, is amended to read as follows:
   48    7. Exceptions. When a person is convicted of a violation  of  subdivi-
   49  sion  one  [of]  OR  two  of this section, and the suspension was issued
   50  pursuant to (A) subdivision four-e of section five hundred ten  of  this
   51  article  due  to a support arrears, OR (B) SUBDIVISION FOUR-F OF SECTION
   52  FIVE HUNDRED TEN OF THE ARTICLE DUE TO  PAST-DUE  TAX  LIABILITIES,  the
   53  mandatory  penalties set forth in subdivision one or two of this section
   54  shall not be applicable if, on or before the return date  or  subsequent
   55  adjourned  date, such person presents proof that such support arrears OR
   56  PAST-DUE TAX LIABILITIES have  been  satisfied  as  shown  by  certified
       S. 2609                            81                            A. 3009
    1  check,  notice  issued  by  the court ordering the suspension, or notice
    2  from a support collection unit OR DEPARTMENT OF TAXATION AND FINANCE  AS
    3  APPLICABLE.  The sentencing court shall take the satisfaction of arrears
    4  OR  THE PAYMENT OF THE PAST-DUE TAX LIABILITIES into account when impos-
    5  ing a sentence for any such conviction. FOR LICENSES SUSPENDED FOR  NON-
    6  PAYMENT  OF  PAST-DUE  TAX  LIABILITIES,  THE COURT SHALL ALSO TAKE INTO
    7  CONSIDERATION PROOF, IN THE FORM OF A  NOTICE  FROM  THE  DEPARTMENT  OF
    8  TAXATION  AND  FINANCE,  THAT  SUCH PERSON HAS MADE PAYMENT ARRANGEMENTS
    9  THAT ARE SATISFACTORY TO THE COMMISSIONER OF TAXATION AND FINANCE.
   10    S 4. Section 530 of the vehicle and traffic law is amended by adding a
   11  new subdivision 5-b to read as follows:
   12    (5-B) ISSUANCE OF A RESTRICTED LICENSE SHALL  NOT  BE  DENIED  TO  ANY
   13  PERSON  WHOSE  LICENSE  IS  SUSPENDED  PURSUANT TO SUBDIVISION FOUR-F OF
   14  SECTION FIVE HUNDRED TEN OF THIS TITLE FOR ANY REASON  OTHER  THAN  SUCH
   15  PERSON'S  FAILURE  TO  OTHERWISE  HAVE  A  VALID  OR  RENEWABLE DRIVER'S
   16  LICENSE. THE RESTRICTIONS ON THE TYPES OF VEHICLES WHICH MAY BE OPERATED
   17  WITH A RESTRICTED LICENSE CONTAINED IN SUCH  SUBDIVISION  FIVE  OF  THIS
   18  SECTION  SHALL  NOT  BE  APPLICABLE  TO A RESTRICTED LICENSE ISSUED TO A
   19  PERSON PURSUANT TO SUBDIVISION FOUR-F OF SECTION  FIVE  HUNDRED  TEN  OF
   20  THIS TITLE. THE ISSUANCE OF A RESTRICTED LICENSE ISSUED AS A RESULT OF A
   21  SUSPENSION  UNDER SUBDIVISION FOUR-F OF SECTION FIVE HUNDRED TEN OF THIS
   22  TITLE SHALL  NOT  IN  ANY  WAY  AFFECT  A  PERSON'S  ELIGIBILITY  FOR  A
   23  RESTRICTED LICENSE AT SOME FUTURE TIME.
   24    S  5.  Section 2335-a of the insurance law, as added by chapter 152 of
   25  the laws of 1998, is amended to read as follows:
   26    S 2335-a. Prohibition of rate increases for persons involved in  emer-
   27  gency  use of vehicles OR DUE TO A DRIVER'S LICENSE SUSPENSION FOR PAST-
   28  DUE TAX LIABILITIES.
   29    (A) No insurer authorized to transact or transacting business in  this
   30  state,  or  controlling  or  controlled by or under common control by or
   31  with an insurer authorized to transact or transacting business  in  this
   32  state,  [which]  THAT  sells  a policy providing motor vehicle liability
   33  insurance coverage in this state, shall increase the policy  premium  in
   34  connection  with  the  insurance  permitted  or required by this chapter
   35  solely because the insured or any other person who customarily  operates
   36  an  automobile covered by the policy has had an accident while operating
   37  a motor vehicle in response to  an  emergency,  where  the  insured  was
   38  either responding to a call to duty as a paid or volunteer member of any
   39  police  or  fire department or first aid squad[;], or was performing any
   40  other function on behalf of the state, any political subdivision  there-
   41  of, a public authority, public benefit corporation, or any other govern-
   42  mental agency or instrumentality in a public emergency.
   43    (B)  NO INSURER AUTHORIZED TO TRANSACT OR TRANSACTING BUSINESS IN THIS
   44  STATE, OR CONTROLLING OR CONTROLLED BY OR UNDER  COMMON  CONTROL  BY  OR
   45  WITH  AN  INSURER AUTHORIZED TO TRANSACT OR TRANSACTING BUSINESS IN THIS
   46  STATE, THAT SELLS A POLICY PROVIDING MOTOR VEHICLE INSURANCE COVERAGE IN
   47  THIS STATE SHALL INCREASE THE POLICY  PREMIUM  IN  CONNECTION  WITH  THE
   48  INSURANCE  PERMITTED  OR  REQUIRED  BY  THIS  CHAPTER SOLELY BECAUSE THE
   49  INSURED OR ANY OTHER  PERSON  WHO  CUSTOMARILY  OPERATES  AN  AUTOMOBILE
   50  COVERED  BY  THE  POLICY  HAS  HAD HIS OR HER DRIVER'S LICENSE SUSPENDED
   51  PURSUANT TO SUBDIVISION FOUR-F OF SECTION FIVE HUNDRED TEN OF THE  VEHI-
   52  CLE  AND TRAFFIC LAW FOR PAST-DUE TAX LIABILITIES, AS DEFINED IN SECTION
   53  ONE HUNDRED SEVENTY-ONE-V OF THE TAX LAW, OR HAS APPLIED FOR OR RECEIVED
   54  A RESTRICTED USE LICENSE AS PROVIDED FOR BY SECTION FIVE HUNDRED  THIRTY
   55  OF THE VEHICLE AND TRAFFIC LAW, AS THE RESULT OF SUCH SUSPENSION.
       S. 2609                            82                            A. 3009
    1    S 6. The insurance law is amended by adding a new section 2616 to read
    2  as follows:
    3    S  2616.  DISCRIMINATION  BECAUSE OF A DRIVER'S LICENSE SUSPENSION FOR
    4  PAST-DUE TAX LIABILITIES. AN INDIVIDUAL OR ENTITY SHALL  NOT  REFUSE  TO
    5  ISSUE  ANY  POLICY  OF  MOTOR VEHICLE INSURANCE, OR CANCEL OR DECLINE TO
    6  RENEW SUCH POLICY, BECAUSE THE APPLICANT OR POLICY HOLDER HAS HAD HIS OR
    7  HER DRIVER'S LICENSE SUSPENDED PURSUANT TO SUBDIVISION FOUR-F OF SECTION
    8  FIVE HUNDRED TEN OF THE VEHICLE AND TRAFFIC LAW FOR PAST-DUE TAX LIABIL-
    9  ITIES, AS DEFINED IN SECTION ONE HUNDRED SEVENTY-ONE-V OF THE  TAX  LAW,
   10  OR HAS APPLIED FOR OR RECEIVED A RESTRICTED USE LICENSE, AS PROVIDED FOR
   11  BY  SECTION  FIVE  HUNDRED THIRTY OF THE VEHICLE AND TRAFFIC LAW, AS THE
   12  RESULT OF SUCH SUSPENSION.
   13    S 7. This act shall take effect immediately; provided,  however,  that
   14  the department of taxation and finance and the department of motor vehi-
   15  cles  shall have up to six months after this act shall have become a law
   16  to execute the written agreement and implement the necessary  procedures
   17  as described in sections one and two of this act.
   18                                   PART Q
   19    Section  1.  The  tax  law is amended by adding a new section 174-c to
   20  read as follows:
   21    S 174-C. SERVICE OF INCOME EXECUTION WITHOUT FILING  A  WARRANT.    1.
   22  NOTWITHSTANDING  ANY PROVISION OF LAW TO THE CONTRARY, IF ANY INDIVIDUAL
   23  LIABLE FOR THE PAYMENT OF ANY TAX OR OTHER  IMPOSITION  ADMINISTERED  BY
   24  THE COMMISSIONER, INCLUDING ANY ADDITIONS TO TAX, PENALTIES AND INTEREST
   25  IN CONNECTION THEREWITH, FAILS TO PAY OR TO COLLECT OR PAY OVER THE SAME
   26  WITHIN  TWENTY-ONE  CALENDAR  DAYS  AFTER  NOTICE AND DEMAND THEREFOR IS
   27  GIVEN TO SUCH INDIVIDUAL (TEN BUSINESS DAYS IF THE AMOUNT FOR WHICH SUCH
   28  NOTICE AND DEMAND  IS  MADE  EQUALS  OR  EXCEEDS  ONE  HUNDRED  THOUSAND
   29  DOLLARS), THE COMMISSIONER IS AUTHORIZED TO SERVE AN INCOME EXECUTION ON
   30  THE  INDIVIDUAL  OR ON THE PERSON FROM WHOM THE INDIVIDUAL IS RECEIVING,
   31  OR WILL RECEIVE, MONEY, WITHOUT FILING A WARRANT IN THE  OFFICE  OF  THE
   32  CLERK  OF  THE  APPROPRIATE  COUNTY  OR  IN  THE  DEPARTMENT OF STATE AS
   33  PROVIDED FOR  IN  THIS  CHAPTER.  FOR  PURPOSES  OF  SERVING  AN  INCOME
   34  EXECUTION PURSUANT TO THIS SECTION, THE COMMISSIONER SHALL, IN THE RIGHT
   35  OF THE PEOPLE OF THE STATE OF NEW YORK, BE DEEMED TO HAVE OBTAINED JUDG-
   36  MENT  AGAINST  THE  INDIVIDUAL  FOR THE TAX OR OTHER IMPOSITION, AND THE
   37  ADDITIONS TO TAX, PENALTIES AND  INTEREST  IN  CONNECTION  THEREOF,  AND
   38  THERE  SHALL BE A LIEN ON THE AMOUNT OF THE INDIVIDUAL'S INCOME THAT MAY
   39  BE GARNISHED. IF THE COMMISSIONER CHOOSES TO SERVE AN  INCOME  EXECUTION
   40  WITHOUT FILING A WARRANT PURSUANT TO THIS SECTION, THE COMMISSIONER MUST
   41  SERVE  THE  INCOME  EXECUTION  WITHIN  SIX  YEARS AFTER THE FIRST DATE A
   42  WARRANT COULD BE FILED PURSUANT TO SECTION ONE HUNDRED SEVENTY-FOUR-B OF
   43  THIS ARTICLE. WHEN SERVING AN INCOME EXECUTION WITHOUT THE FILING  OF  A
   44  WARRANT,  THE  COMMISSIONER  SHALL  FOLLOW  THE  PROCEDURES SET FORTH IN
   45  SECTION FIVE THOUSAND TWO HUNDRED THIRTY-ONE OF THE CIVIL  PRACTICE  LAW
   46  AND  RULES,  WITH THE REFERENCES IN SUCH SECTION TO "SHERIFF" TO BE READ
   47  AS  REFERRING  TO  THE  COMMISSIONER  OR  THE  DEPARTMENT.  SUCH  INCOME
   48  EXECUTION  SHALL CONTINUE TO BE IN EFFECT UNTIL SUCH LIABILITY IS SATIS-
   49  FIED OR UNTIL TWENTY YEARS FROM THE FIRST DATE A WARRANT COULD BE  FILED
   50  BY  THE  COMMISSIONER  PURSUANT TO SECTION ONE HUNDRED SEVENTY-FOUR-B OF
   51  THIS ARTICLE, WHETHER OR NOT A WARRANT IS FILED FOR THAT LIABILITY.
   52    2. THE PROVISIONS OF THIS SECTION SHALL BE IN ADDITION TO  THE  PROCE-
   53  DURES  RELATING TO COLLECTION OR ADMINISTRATION PROVIDED WITH RESPECT TO
   54  ANY TAX OR OTHER IMPOSITION ADMINISTERED BY THE  COMMISSIONER.  WHERE  A
       S. 2609                            83                            A. 3009
    1  PROVISION  OF  THIS SECTION IS INCONSISTENT WITH ANY SUCH PROVISION WITH
    2  RESPECT TO SUCH TAX OR OTHER IMPOSITION, THE PROVISIONS OF THIS  SECTION
    3  WILL  APPLY. NOTHING IN THIS SECTION SHALL PREVENT THE COMMISSIONER FROM
    4  TIMELY FILING A WARRANT IN ORDER TO PURSUE ANY OF THE COLLECTION METHODS
    5  AUTHORIZED UNDER ARTICLE FIFTY-TWO OF THE CIVIL PRACTICE LAW AND RULES.
    6    S 2. This act shall take effect immediately.
    7                                   PART R
    8    Section  1.  Subparagraph (i) of the opening paragraph of section 1210
    9  of the tax law is REPEALED and a new subparagraph (i) is added  to  read
   10  as follows:
   11    (I)  WITH  RESPECT  TO A CITY OF ONE MILLION OR MORE AND THE FOLLOWING
   12  COUNTIES (1) ANY SUCH CITY HAVING A POPULATION OF ONE MILLION OR MORE IS
   13  HEREBY AUTHORIZED AND EMPOWERED TO ADOPT AND  AMEND  LOCAL  LAWS,  ORDI-
   14  NANCES  OR RESOLUTIONS IMPOSING SUCH TAXES IN ANY SUCH CITY, AT THE RATE
   15  OF FOUR AND ONE-HALF PERCENT;
   16    (2) THE FOLLOWING COUNTIES THAT IMPOSE TAXES DESCRIBED IN  SUBDIVISION
   17  (A)  OF THIS SECTION AT THE RATE OF THREE PERCENT AS AUTHORIZED ABOVE IN
   18  THIS PARAGRAPH FOR SUCH  COUNTIES  ARE  HEREBY  FURTHER  AUTHORIZED  AND
   19  EMPOWERED  TO  ADOPT  AND  AMEND  LOCAL LAWS, ORDINANCES, OR RESOLUTIONS
   20  IMPOSING SUCH TAXES DESCRIBED IN SUBDIVISION (A) OF THIS SECTION AT  THE
   21  FOLLOWING  ADDITIONAL  RATES, IN QUARTER PERCENT INCREMENTS, WHICH RATES
   22  ARE ADDITIONAL TO THE THREE PERCENT RATE AUTHORIZED ABOVE IN THIS  PARA-
   23  GRAPH,  AND,  IN THE CASE OF A COUNTY AUTHORIZED TO IMPOSE MORE THAN ONE
   24  ADDITIONAL RATE, ALSO IN ADDITION TO EACH OTHER, FOR EACH  SUCH  COUNTY,
   25  PROVIDED  THAT (A) THE COUNTY OF ROCKLAND MAY IMPOSE ADDITIONAL RATES OF
   26  FIVE-EIGHTHS PERCENT AND THREE-EIGHTHS PERCENT, IN LIEU OF IMPOSING SUCH
   27  ADDITIONAL RATE IN QUARTER PERCENT INCREMENTS; (B) THE COUNTY OF ONTARIO
   28  MAY IMPOSE ADDITIONAL RATES  OF  ONE-EIGHTH  PERCENT  AND  THREE-EIGHTHS
   29  PERCENT,  IN  LIEU  OF  IMPOSING SUCH ADDITIONAL RATE IN QUARTER PERCENT
   30  INCREMENTS; (C) THREE-QUARTERS PERCENT OF THE ADDITIONAL RATE AUTHORIZED
   31  TO BE IMPOSED BY THE COUNTY OF NASSAU SHALL BE SUBJECT TO THE LIMITATION
   32  SET FORTH IN SECTION TWELVE HUNDRED SIXTY-TWO-E OF THIS ARTICLE:
   33    (A) ONE-QUARTER OF ONE PERCENT - NONE.
   34    (B) ONE-HALF OF ONE PERCENT - CHAUTAUQUA, ONTARIO, SCHENECTADY.
   35    (C) THREE-QUARTERS OF ONE PERCENT - DUTCHESS, ESSEX, JEFFERSON, LEWIS,
   36  ORANGE.
   37    (D) ONE  PERCENT  -  ALBANY,  BROOME,  CATTARAUGUS,  CAYUGA,  CHEMUNG,
   38  CHENANGO, CLINTON, COLUMBIA, CORTLAND, DELAWARE, FRANKLIN, FULTON, GENE-
   39  SEE, GREENE, LIVINGSTON, MADISON, MONROE, MONTGOMERY, NIAGARA, ONONDAGA,
   40  ORLEANS,   OSWEGO,  OTSEGO,  PUTNAM,  RENSSELAER,  ROCKLAND,  SCHOHARIE,
   41  SCHUYLER, SENECA, STEUBEN, SUFFOLK, SULLIVAN, TIOGA,  TOMPKINS,  ULSTER,
   42  WAYNE, WYOMING, YATES.
   43    (E) ONE AND ONE-QUARTER PERCENT - HERKIMER, NASSAU.
   44    (F) ONE AND ONE-HALF PERCENT - ALLEGANY.
   45    (G) ONE AND THREE-QUARTERS PERCENT - ERIE, ONEIDA.
   46    S 2. Subparagraph (ii) of the opening paragraph of section 1210 of the
   47  tax  law  is  REPEALED  and  a new subparagraph (ii) is added to read as
   48  follows:
   49     (II) THE FOLLOWING CITIES THAT IMPOSE TAXES DESCRIBED IN  SUBDIVISION
   50  (A) OF THIS SECTION AT THE RATE OF ONE AND ONE-HALF PERCENT OR HIGHER AS
   51  AUTHORIZED  ABOVE  IN  THIS PARAGRAPH FOR SUCH CITIES ARE HEREBY FURTHER
   52  AUTHORIZED AND EMPOWERED TO ADOPT AND AMEND LOCAL LAWS,  ORDINANCES,  OR
   53  RESOLUTIONS  IMPOSING  SUCH  TAXES  DESCRIBED IN SUBDIVISION (A) OF THIS
   54  SECTION AT THE FOLLOWING ADDITIONAL RATES,  IN  QUARTER  PERCENT  INCRE-
       S. 2609                            84                            A. 3009
    1  MENTS,  WHICH  RATES  ARE  ADDITIONAL TO THE ONE AND ONE-HALF PERCENT OR
    2  HIGHER RATES AUTHORIZED ABOVE IN THIS PARAGRAPH AND, IN THE  CASE  OF  A
    3  CITY  AUTHORIZED  TO IMPOSE MORE THAN ONE ADDITIONAL RATE, ALSO IN ADDI-
    4  TION TO EACH OTHER, FOR EACH SUCH CITY:
    5    (1) ONE-QUARTER OF ONE PERCENT - NONE.
    6    (2) ONE-HALF OF ONE PERCENT - NONE.
    7    (3) THREE-QUARTERS OF ONE PERCENT - NONE.
    8    (4) ONE PERCENT - MOUNT VERNON; YONKERS; OSWEGO, FOR THE PERIOD BEGIN-
    9  NING DECEMBER FIRST, TWO THOUSAND ELEVEN, AND ENDING NOVEMBER THIRTIETH,
   10  TWO  THOUSAND  THIRTEEN;  NEW ROCHELLE, FOR THE PERIOD BEGINNING JANUARY
   11  FIRST, TWO THOUSAND TWELVE, AND ENDING DECEMBER THIRTY-FIRST, TWO  THOU-
   12  SAND  THIRTEEN;  WHITE PLAINS, FOR THE PERIOD BEGINNING SEPTEMBER FIRST,
   13  TWO THOUSAND ELEVEN, AND ENDING AUGUST THIRTY-FIRST, TWO THOUSAND  THIR-
   14  TEEN.
   15    (5) ONE AND ONE-QUARTER PERCENT - NONE.
   16    (6) ONE AND ONE-HALF PERCENT - NONE.
   17    (7) ONE AND THREE-QUARTERS PERCENT - NONE.
   18    S  3.  Subparagraph  (iii) of the opening paragraph of section 1210 of
   19  the tax law is REPEALED and a new subparagraph (iii) is added to read as
   20  follows:
   21    (III)  THE  MAXIMUM  RATE  REFERRED  TO  IN  SECTION  TWELVE   HUNDRED
   22  TWENTY-FOUR OF THIS ARTICLE SHALL BE CALCULATED WITHOUT REFERENCE TO THE
   23  ADDITIONAL  RATES  AUTHORIZED  FOR  COUNTIES, OTHER THAN THE COUNTIES OF
   24  CAYUGA, CORTLAND, FULTON, MADISON, AND OTSEGO IN  SUBPARAGRAPH  (I)  AND
   25  THE CITIES IN SUBPARAGRAPH (II) OF THIS PARAGRAPH.
   26    S  4.  Section 1210 of the tax law is amended by adding a new subdivi-
   27  sion (q) to read as follows:
   28    (Q) NOTWITHSTANDING ANY PROVISION OF THIS SECTION OR ANY OTHER LAW,  A
   29  COUNTY  MAY, BY A MAJORITY VOTE OF ITS GOVERNING BODY, PASS A LOCAL LAW,
   30  ORDINANCE OR RESOLUTION TO IMPOSE THE ADDITIONAL RATE OR RATES  OF  SUCH
   31  SALES  AND  COMPENSATING  USE TAXES AUTHORIZED BY CLAUSE TWO OF SUBPARA-
   32  GRAPH (I) OF THE OPENING PARAGRAPH OF THIS SECTION FOR A PERIOD  NOT  TO
   33  EXCEED  TWO  YEARS.   ANY SUCH LOCAL LAW, ORDINANCE, OR RESOLUTION SHALL
   34  ALSO BE SUBJECT TO THE PROVISIONS OF SUBDIVISIONS (D) AND  (E)  OF  THIS
   35  SECTION.
   36    S 5. Section 1210-E of the tax law is REPEALED.
   37    S  6.  Subdivisions  (d),  (e), (f), (g), (h) (i), (j), (k), (l), (m),
   38  (n), (o), (p), (q), (r), (t), (u), (v), (w), (x), (y), (z), (z-1), (aa),
   39  (bb), (cc), (dd), (ee), (ff) and (gg) of section 1224 of the tax law are
   40  REPEALED.
   41    S 7. Section 1224 of the tax law is amended by adding four new  subdi-
   42  visions (d),(e), (f), and (g) to read as follows:
   43    (D)  FOR  PURPOSES  OF THIS SECTION, THE TERM "PRIOR RIGHT" SHALL MEAN
   44  THE PREFERENTIAL RIGHT TO IMPOSE ANY TAX DESCRIBED  IN  SECTIONS  TWELVE
   45  HUNDRED  TWO  AND TWELVE HUNDRED THREE, OR TWELVE HUNDRED TEN AND TWELVE
   46  HUNDRED ELEVEN, OF THIS ARTICLE AND THEREBY TO PREEMPT SUCH TAX  AND  TO
   47  PRECLUDE  ANOTHER  MUNICIPAL CORPORATION FROM IMPOSING OR CONTINUING THE
   48  IMPOSITION OF SUCH TAX TO THE  EXTENT  THAT  SUCH  RIGHT  IS  EXERCISED.
   49  HOWEVER, THE RIGHT OF PREEMPTION SHALL ONLY APPLY WITHIN THE TERRITORIAL
   50  LIMITS OF THE TAXING JURISDICTION HAVING THE RIGHT OR PREEMPTION.
   51    (E)  EACH  OF  THE  FOLLOWING  COUNTIES AND CITIES SHALL HAVE THE SOLE
   52  RIGHT TO IMPOSE THE FOLLOWING ADDITIONAL RATE OF SALES AND  COMPENSATING
   53  USE TAXES IN EXCESS OF THREE PERCENT THAT SUCH COUNTY OR CITY IS AUTHOR-
   54  IZED  TO  IMPOSE PURSUANT TO THE AUTHORITY OF SUBDIVISION (A) OF SECTION
   55  TWELVE HUNDRED TEN OF THIS ARTICLE. SUCH ADDITIONAL RATES OF  TAX  SHALL
   56  NOT BE SUBJECT TO PREEMPTION.
       S. 2609                            85                            A. 3009
    1    (1) COUNTIES:
    2    (A) ONE-QUARTER OF ONE PERCENT - NONE.
    3    (B) ONE-HALF OF ONE PERCENT - CHAUTAUQUA, ONTARIO, SCHENECTADY.
    4    (C) THREE-QUARTERS OF ONE PERCENT - DUTCHESS, ESSEX, JEFFERSON, LEWIS,
    5  ORANGE.
    6    (D)  ONE  PERCENT  -  ALBANY,  BROOME, CATTARAUGUS, CHEMUNG, CHENANGO,
    7  CLINTON, COLUMBIA,  DELAWARE,  FRANKLIN,  GENESEE,  GREENE,  LIVINGSTON,
    8  MONROE,  MONTGOMERY, NIAGARA, ONONDAGA, ORLEANS, OTSEGO, PUTNAM, RENSSE-
    9  LAER, ROCKLAND, SCHOHARIE, SCHUYLER, SENECA, STEUBEN, SUFFOLK, SULLIVAN,
   10  TIOGA, TOMPKINS, ULSTER, WAYNE, WYOMING, YATES.
   11    (E) ONE AND ONE-QUARTER PERCENT - HERKIMER, NASSAU.
   12    (F) ONE AND ONE-HALF PERCENT - ALLEGANY.
   13    (G) ONE AND THREE-QUARTERS PERCENT - ERIE, ONEIDA.
   14    (2) CITIES:
   15    (A) ONE-QUARTER OF ONE PERCENT - NONE.
   16    (B) ONE-HALF OF ONE PERCENT - NONE.
   17    (C) THREE-QUARTERS OF ONE PERCENT - NONE.
   18    (D) ONE PERCENT - MOUNT VERNON, NEW ROCHELLE, WHITE PLAINS, YONKERS.
   19    (F) EACH OF THE FOLLOWING CITIES IS AUTHORIZED TO  PREEMPT  THE  TAXES
   20  IMPOSED  BY  THE COUNTY IN WHICH IT IS LOCATED PURSUANT TO THE AUTHORITY
   21  OF SUBDIVISION (A) OF SECTION TWELVE HUNDRED TEN OF THIS ARTICLE, TO THE
   22  EXTENT OF ONE-HALF THE MAXIMUM AGGREGATE RATE AUTHORIZED  UNDER  SECTION
   23  TWELVE  HUNDRED  TEN OF THIS ARTICLE, INCLUDING THE ADDITIONAL RATE THAT
   24  THE COUNTY IN WHICH SUCH  CITY  IS  LOCATED  IS  AUTHORIZED  TO  IMPOSE:
   25  AUBURN, IN CAYUGA COUNTY; CORTLAND, IN CORTLAND COUNTY; GLOVERSVILLE AND
   26  JOHNSTOWN,  IN  FULTON  COUNTY;  ONEIDA,  IN MADISON COUNTY; ONEONTA, IN
   27  OTSEGO COUNTY. AS OF THE DATE THIS SUBDIVISION TAKES  EFFECT,  ANY  SUCH
   28  PREEMPTION  BY SUCH A CITY IN EFFECT ON SUCH DATE SHALL CONTINUE IN FULL
   29  FORCE AND EFFECT UNTIL THE EFFECTIVE DATE OF A LOCAL LAW, ORDINANCE,  OR
   30  RESOLUTION  ADOPTED  OR  AMENDED  BY THE CITY TO CHANGE SUCH PREEMPTION,
   31  PROVIDED SUCH A CITY'S RATE OF TAX IN EXCESS OF ONE AND ONE-HALF PERCENT
   32  SHALL NOT CONTINUE IN EFFECT IF THE COUNTY IN WHICH IT IS  LOCATED  DOES
   33  NOT  EXTEND  ITS  ADDITIONAL  RATE  IN  EXCESS  OF  THREE PERCENT.   ANY
   34  PREEMPTION BY SUCH A CITY TO TAKE EFFECT UNDER  THIS  SUBDIVISION  AFTER
   35  THE  DATE  THIS  SUBDIVISION TAKES EFFECT SHALL BE SUBJECT TO THE NOTICE
   36  REQUIREMENTS IN SECTION TWELVE HUNDRED TWENTY-THREE OF THIS SUBPART  AND
   37  TO THE OTHER REQUIREMENTS OF THIS ARTICLE.
   38    (G)  NOTWITHSTANDING THE FOREGOING PROVISIONS OF THIS SECTION OR OTHER
   39  LAW, IF THE COUNTY OF DUTCHESS WITHDRAWS FROM THE METROPOLITAN  COMMUTER
   40  TRANSPORTATION DISTRICT AND IMPOSES THE ADDITIONAL THREE-EIGHTHS PERCENT
   41  RATE OF TAX, THE NET COLLECTIONS FROM WHICH THE COUNTY HAS SET ASIDE FOR
   42  MASS  TRANSPORTATION PURPOSES, AS AUTHORIZED BY SUBPARAGRAPH (IV) OF THE
   43  OPENING PARAGRAPH OF SECTION TWELVE HUNDRED TEN OF  THIS  ARTICLE,  SUCH
   44  ADDITIONAL THREE-EIGHTHS PERCENT RATE OF TAX SHALL BE IN ADDITION TO ANY
   45  OTHER  ADDITIONAL  RATE  OF  TAX SUCH COUNTY IS AUTHORIZED TO IMPOSE AND
   46  SHALL NOT BE SUBJECT TO PREEMPTION AND SUCH  COUNTY  SHALL  NOT  INCLUDE
   47  SUCH  ADDITIONAL  THREE-EIGHTHS  PERCENT  RATE OF TAX IN DETERMINING ITS
   48  ADDITIONAL RATE OF TAX ON THE AREA OF THE COUNTY OUTSIDE ANY CITY IN THE
   49  COUNTY IMPOSING TAX FOR PURPOSES OF SUBDIVISION (D)  OF  SECTION  TWELVE
   50  HUNDRED SIXTY-TWO OF THIS ARTICLE.
   51    S  8.  The  tax  law  is  amended by adding three new sections 1262-t,
   52  1262-u, and 1262-v to read as follows:
   53    S 1262-T. ONEIDA COUNTY NET COLLECTIONS FROM ADDITIONAL RATE  OF  TAX.
   54  NET COLLECTIONS FROM AN ADDITIONAL THREE-QUARTERS PERCENT RATE OF ONEIDA
   55  COUNTY'S  SALES  AND  COMPENSATING  USE  TAXES  IMPOSED  PURSUANT TO THE
   56  AUTHORITY OF CLAUSE TWO OF SUBPARAGRAPH (I) OF THE OPENING PARAGRAPH  OF
       S. 2609                            86                            A. 3009
    1  SECTION  TWELVE  HUNDRED TEN OF THIS ARTICLE SHALL NOT BE SUBJECT TO ANY
    2  REVENUE DISTRIBUTION AGREEMENT ENTERED INTO BY THE COUNTY AND THE CITIES
    3  IN THE COUNTY UNDER SUBDIVISION (C) OF SECTION TWELVE HUNDRED  SIXTY-TWO
    4  OF THIS PART.
    5    S  1262-U. CLINTON COUNTY NET COLLECTIONS FROM ADDITIONAL RATE OF TAX.
    6  NET COLLECTIONS FROM ANY ADDITIONAL RATE OF SALES AND  COMPENSATING  USE
    7  TAXES  CLINTON COUNTY IMPOSES PURSUANT TO THE AUTHORITY OF CLAUSE TWO OF
    8  SUBPARAGRAPH (I) OF THE OPENING PARAGRAPH OF SECTION TWELVE HUNDRED  TEN
    9  OF  THIS  ARTICLE  SHALL  BE PAID TO THE COUNTY AND THE COUNTY SHALL SET
   10  ASIDE SUCH NET COLLECTIONS AND USE THEM SOLELY FOR COUNTY PURPOSES. SUCH
   11  NET COLLECTIONS SHALL NOT BE SUBJECT TO ANY REVENUE DISTRIBUTION  AGREE-
   12  MENT  ENTERED INTO BY THE COUNTY AND THE CITY IN THE COUNTY UNDER SUBDI-
   13  VISION (C) OF SECTION TWELVE HUNDRED SIXTY-TWO OF THIS PART.
   14    S 1262-V. ONTARIO COUNTY NET COLLECTIONS FROM ADDITIONAL RATE OF  TAX.
   15  NOTWITHSTANDING  ANY LAW TO THE CONTRARY, AFTER ONTARIO COUNTY ALLOCATES
   16  NET COLLECTIONS FROM ITS ADDITIONAL ONE-EIGHTH OF ONE  PERCENT  RATE  OF
   17  SALES  AND  COMPENSATING  USE TAXES PURSUANT TO THE AUTHORITY OF SECTION
   18  TWELVE HUNDRED SIXTY-TWO-R OF THIS PART, AS ADDED BY CHAPTER THIRTY-SEV-
   19  EN OF THE LAWS OF TWO THOUSAND SIX, NET COLLECTIONS  FROM  THE  COUNTY'S
   20  ADDITIONAL  THREE-EIGHTHS OF ONE PERCENT RATE OF SUCH TAXES SHALL BE SET
   21  ASIDE FOR COUNTY PURPOSES AND SHALL NOT  BE  SUBJECT  TO  ANY  AGREEMENT
   22  ENTERED  INTO  BY THE COUNTY AND THE CITIES IN THE COUNTY UNDER SUBDIVI-
   23  SION (C) OF SECTION TWELVE HUNDRED SIXTY-TWO OR SECTION  TWELVE  HUNDRED
   24  SIXTY-TWO-R  OF  THIS PART, AS ADDED BY CHAPTER THIRTY-SEVEN OF THE LAWS
   25  OF TWO THOUSAND SIX.
   26    S 9. Section 1262-s of the tax law, as amended by chapter 226  of  the
   27  laws of 2011, is amended to read as follows:
   28    S 1262-s. Disposition of net collections from the additional one-quar-
   29  ter of one percent rate of sales and compensating use taxes in the coun-
   30  ty  of  Herkimer.  Notwithstanding any contrary provision of law, if the
   31  county of Herkimer imposes the additional  one-quarter  of  one  percent
   32  rate  of  sales  and  compensating  use  taxes IN EXCESS OF FOUR PERCENT
   33  authorized by [section twelve hundred ten-E] THE  OPENING  PARAGRAPH  OF
   34  SECTION  TWELVE  HUNDRED  TEN of this article [for all or any portion of
   35  the period beginning December  first,  two  thousand  seven  and  ending
   36  November thirtieth, two thousand thirteen], the county shall use all net
   37  collections  from such additional one-quarter of one percent rate to pay
   38  the county's expenses for the construction  of  additional  correctional
   39  facilities.  The net collections from [the] SUCH additional rate imposed
   40  [pursuant to section twelve hundred  ten-E]  shall  be  deposited  in  a
   41  special  fund  to  be created by such county separate and apart from any
   42  other funds and accounts of  the  county.  Any  and  all  remaining  net
   43  collections  from  such  additional  tax,  after  the  expenses  of such
   44  construction are paid, shall be deposited by the county of  Herkimer  in
   45  the general fund of such county for any county purpose.
   46    S  10.  The tax law is amended by adding a new section 1265 to read as
   47  follows:
   48    S 1265. REFERENCES TO CERTAIN PROVISIONS AUTHORIZING ADDITIONAL  RATES
   49  OR  TO  EXPIRATIONS OF A PERIOD. NOTWITHSTANDING ANY PROVISION OF LAW TO
   50  THE CONTRARY: ANY REFERENCE IN ANY SECTION OF THIS CHAPTER OR OTHER LAW,
   51  OR IN ANY LOCAL LAW, ORDINANCE, OR RESOLUTION ADOPTED  PURSUANT  TO  THE
   52  AUTHORITY  OF THIS ARTICLE, OR IN ANY AGREEMENT ENTERED INTO BY A COUNTY
   53  AND ALL THE CITIES IN THAT  COUNTY  UNDER  SUBDIVISION  (C)  OF  SECTION
   54  TWELVE  HUNDRED  SIXTY-TWO  OF THIS PART, TO NET COLLECTIONS OR REVENUES
   55  FROM A TAX IMPOSED BY A COUNTY OR CITY PURSUANT TO THE  AUTHORITY  OF  A
   56  CLAUSE,  OR  TO  A SUBCLAUSE OF A CLAUSE, OF SUBPARAGRAPH (I) OR (II) OF
       S. 2609                            87                            A. 3009
    1  THE OPENING PARAGRAPH OF SECTION TWELVE  HUNDRED  TEN  OF  THIS  ARTICLE
    2  REPEALED  BY  SECTION ONE OR TWO OF THE CHAPTER OF THE LAWS OF TWO THOU-
    3  SAND THIRTEEN THAT ADDED THIS SECTION OR TO SECTION TWELVE HUNDRED TEN-E
    4  OF  THIS ARTICLE REPEALED BY SECTION FIVE OF SUCH CHAPTER OF THE LAWS OF
    5  TWO THOUSAND  THIRTEEN  SHALL  BE  DEEMED  TO  BE  A  REFERENCE  TO  NET
    6  COLLECTIONS OR REVENUES FROM A TAX IMPOSED BY THAT COUNTY OR CITY PURSU-
    7  ANT  TO  THE  AUTHORITY  OF  THE  EQUIVALENT  PROVISION OF CLAUSE TWO OF
    8  SUBPARAGRAPH (I) OR TO SUBPARAGRAPH (II) OF  THE  OPENING  PARAGRAPH  OF
    9  SUCH  SECTION  TWELVE HUNDRED TEN AS ADDED BY SUCH SECTION ONE OR TWO OF
   10  SUCH CHAPTER OF THE LAWS OF TWO THOUSAND THIRTEEN.
   11    S 11. Severability. If any provision of this act shall for any  reason
   12  be  finally adjudged by any court of competent jurisdiction to be inval-
   13  id, such judgment shall not affect, impair, or invalidate the  remainder
   14  of  this  act,  but  shall be confined in its operation to the provision
   15  directly involved in the controversy in which such judgment  shall  have
   16  been rendered. It it hereby declared to be the intent of the legislature
   17  that this act would have been enacted even if such invalid provision had
   18  not been included in this act.
   19    S 12. This act shall take effect immediately.
   20                                   PART S
   21    Section  1.  Paragraph  1  of subdivision a of section 1612 of the tax
   22  law, as amended by chapter 147 of the laws of 2010, subparagraph (A)  as
   23  amended  by  section  1  of part S of chapter 59 of the laws of 2012, is
   24  amended to read as follows:
   25    (1) sixty percent of the total amount for which tickets have been sold
   26  for [a lawful lottery] THE QUICK DRAW game [introduced on or  after  the
   27  effective date of this paragraph,] subject to [the following provisions:
   28    (A) such game shall be available only on premises occupied by licensed
   29  lottery sales agents, subject to the following provisions:
   30    (i)  if  the  licensee  does not hold a license issued pursuant to the
   31  alcoholic beverage control law to sell alcoholic beverages for  consump-
   32  tion  on  the  premises,  then  the  premises must have a minimum square
   33  footage greater than two thousand five hundred square feet;
   34    (ii) notwithstanding the foregoing  provisions,  television  equipment
   35  that  automatically  displays  the  results  of  such  drawings  may  be
   36  installed and used without regard to the square footage if such premises
   37  are used as:
   38    (I) a commercial bowling establishment, or
   39    (II) a facility authorized under the racing, pari-mutuel wagering  and
   40  breeding law to accept pari-mutuel wagers;
   41    (B) the] rules for the operation of such game [shall be] as prescribed
   42  by regulations promulgated and adopted by the division[, provided howev-
   43  er,  that such rules shall provide that no person under the age of twen-
   44  ty-one may participate in such games on the premises of a  licensee  who
   45  holds a license issued pursuant to the alcoholic beverage control law to
   46  sell alcoholic beverages for consumption on the premises; and, provided,
   47  further,  that such regulations may be revised on an emergency basis not
   48  later than ninety days after the enactment of this paragraph in order to
   49  conform such regulations to the requirements of this paragraph]; or
   50    S 2. This act shall take effect immediately.
   51                                   PART T
       S. 2609                            88                            A. 3009
    1    Section 1. Clause (F) of subparagraph (ii) of paragraph 1 of  subdivi-
    2  sion b of section 1612 of the tax law, as amended by section 6 of part K
    3  of chapter 57 of the laws of 2010, is amended to read as follows:
    4    (F) notwithstanding clauses (A), (B), (C), (D) and (E) of this subpar-
    5  agraph,  when  a  vendor track, is located in Sullivan county and within
    6  sixty miles from any gaming facility in a contiguous state  such  vendor
    7  fee  shall, for a period of [five] SIX years commencing April first, two
    8  thousand eight, be at a rate of forty-one percent of the  total  revenue
    9  wagered  at  the  vendor  track after payout for prizes pursuant to this
   10  chapter, after which time such rate shall be as for all tracks in clause
   11  (C) of this subparagraph.
   12    S 2. This act shall take effect immediately and  shall  be  deemed  to
   13  have been in full force and effect on and after April 1, 2013.
   14                                   PART U
   15    Section  1.  Paragraph  (a)  of  subdivision  1 of section 1003 of the
   16  racing, pari-mutuel wagering and breeding law, as amended by  section  1
   17  of  part  O  of  chapter  59  of the laws of 2012, is amended to read as
   18  follows:
   19    (a) Any  racing  association  or  corporation  or  regional  off-track
   20  betting  corporation,  authorized  to conduct pari-mutuel wagering under
   21  this chapter, desiring to display the simulcast of horse races on  which
   22  pari-mutuel  betting shall be permitted in the manner and subject to the
   23  conditions provided for in this article may apply to  the  board  for  a
   24  license so to do. Applications for licenses shall be in such form as may
   25  be  prescribed  by the board and shall contain such information or other
   26  material or evidence as the board  may  require.  No  license  shall  be
   27  issued  by the board authorizing the simulcast transmission of thorough-
   28  bred races from a track located in Suffolk  county.  The  fee  for  such
   29  licenses  shall  be five hundred dollars per simulcast facility per year
   30  payable by the licensee to the board for deposit into the general  fund.
   31  Except  as  provided herein, the board shall not approve any application
   32  to conduct simulcasting into individual or group  residences,  homes  or
   33  other areas for the purposes of or in connection with pari-mutuel wager-
   34  ing.  The board may approve simulcasting into residences, homes or other
   35  areas to be conducted jointly by one or more regional off-track  betting
   36  corporations and one or more of the following: a franchised corporation,
   37  thoroughbred racing corporation or a harness racing corporation or asso-
   38  ciation;  provided  (i) the simulcasting consists only of those races on
   39  which pari-mutuel betting is authorized by this chapter at one  or  more
   40  simulcast  facilities  for  each  of  the  contracting off-track betting
   41  corporations which shall include wagers made in accordance with  section
   42  one thousand fifteen, one thousand sixteen and one thousand seventeen of
   43  this  article;  provided  further  that the contract provisions or other
   44  simulcast arrangements for such simulcast  facility  shall  be  no  less
   45  favorable than those in effect on January first, two thousand five; (ii)
   46  that  each  off-track  betting  corporation having within its geographic
   47  boundaries such residences, homes or other areas technically capable  of
   48  receiving  the  simulcast signal shall be a contracting party; (iii) the
   49  distribution of revenues shall be subject to  contractual  agreement  of
   50  the  parties  except that statutory payments to non-contracting parties,
   51  if any, may not be reduced; provided, however, that  nothing  herein  to
   52  the  contrary  shall  prevent  a  track  from televising its races on an
   53  irregular basis primarily for promotional or marketing purposes as found
   54  by the board. For purposes of this paragraph, the provisions of  section
       S. 2609                            89                            A. 3009
    1  one  thousand  thirteen  of  this article shall not apply. Any agreement
    2  authorizing an in-home simulcasting experiment commencing prior  to  May
    3  fifteenth,  nineteen  hundred  ninety-five,  may,  and all its terms, be
    4  extended [until June thirtieth, two thousand thirteen]; provided, howev-
    5  er,  that any party to such agreement may elect to terminate such agree-
    6  ment upon conveying written notice to all other parties of  such  agree-
    7  ment  at  least  forty-five  days  prior  to  the  effective date of the
    8  termination, via registered mail. Any party to  an  agreement  receiving
    9  such  notice of an intent to terminate, may request the board to mediate
   10  between the parties new terms and conditions in a replacement  agreement
   11  between the parties as will permit continuation of an in-home experiment
   12  [until  June  thirtieth,  two  thousand  thirteen];  and (iv) no in-home
   13  simulcasting in the thoroughbred special betting  district  shall  occur
   14  without the approval of the regional thoroughbred track.
   15    S  2.  Subparagraph  (iii)  of paragraph d of subdivision 3 of section
   16  1007 of the racing, pari-mutuel wagering and breeding law, as amended by
   17  section 2 of part O of chapter 59 of the laws of  2012,  is  amended  to
   18  read as follows:
   19    (iii) Of the sums retained by a receiving track located in Westchester
   20  county  on  races received from a franchised corporation, for the period
   21  commencing January first, two thousand  eight  [and  continuing  through
   22  June  thirtieth, two thousand thirteen], the amount used exclusively for
   23  purses to be awarded at races conducted by such receiving track shall be
   24  computed as follows: of the sums so retained, two and  one-half  percent
   25  of  the  total pools. Such amount shall be increased or decreased in the
   26  amount of fifty percent of the difference in  total  commissions  deter-
   27  mined  by  comparing  the total commissions available after July twenty-
   28  first, nineteen hundred ninety-five to the total commissions that  would
   29  have  been  available to such track prior to July twenty-first, nineteen
   30  hundred ninety-five.
   31    S 3. Section 1014 of the racing, pari-mutuel wagering and breeding law
   32  is REPEALED.
   33    S 4. Subdivision 1 of section 1015 of the racing, pari-mutuel wagering
   34  and breeding law, as amended by section 4 of part O of chapter 59 of the
   35  laws of 2012, is amended to read as follows:
   36    1. The provisions of this section shall  govern  the  simulcasting  of
   37  races  conducted  at  harness tracks located in another state or country
   38  during the period COMMENCING July first,  nineteen  hundred  ninety-four
   39  [through  June  thirtieth,  two  thousand  thirteen]. This section shall
   40  supersede all inconsistent provisions of this chapter.
   41    S 5. The opening paragraph of subdivision 1 of  section  1016  of  the
   42  racing,  pari-mutuel  wagering and breeding law, as amended by section 5
   43  of part O of chapter 59 of the laws of  2012,  is  amended  to  read  as
   44  follows:
   45    The  provisions of this section shall govern the simulcasting of races
   46  conducted at thoroughbred tracks located in another state or country  on
   47  any  day  during which a franchised corporation is not conducting a race
   48  meeting in Saratoga county at  Saratoga  thoroughbred  racetrack  [until
   49  June  thirtieth,  two thousand thirteen]. Every off-track betting corpo-
   50  ration branch office and every simulcasting facility licensed in accord-
   51  ance with section one thousand seven that have entered  into  a  written
   52  agreement with such facility's representative horsemen's organization as
   53  approved  by  the board, one thousand eight or one thousand nine of this
   54  article shall be authorized to accept wagers and display the live  full-
   55  card  simulcast signal of thoroughbred tracks (which may include quarter
   56  horse or mixed meetings provided that all such wagering  on  such  races
       S. 2609                            90                            A. 3009
    1  shall be construed to be thoroughbred races) located in another state or
    2  foreign country, subject to the following provisions; provided, however,
    3  no  such written agreement shall be required of a franchised corporation
    4  licensed in accordance with section one thousand seven of this article:
    5    S  6. The opening paragraph of section 1018 of the racing, pari-mutuel
    6  wagering and breeding law, as amended by section 6 of part O of  chapter
    7  59 of the laws of 2012, is amended to read as follows:
    8    Notwithstanding  any  other  provision of this chapter, for the period
    9  COMMENCING  July  twenty-fifth,  two  thousand  one  [through  September
   10  eighth,  two thousand twelve], when a franchised corporation is conduct-
   11  ing a race meeting within the state at Saratoga Race Course, every  off-
   12  track  betting corporation branch office and every simulcasting facility
   13  licensed in accordance with section one thousand seven (that has entered
   14  into a written agreement with such facility's representative  horsemen's
   15  organization  as approved by the board), one thousand eight or one thou-
   16  sand nine of this article shall  be  authorized  to  accept  wagers  and
   17  display  the  live  simulcast signal from thoroughbred tracks located in
   18  another state, provided that such facility shall accept wagers on  races
   19  run  at  all  in-state  thoroughbred  tracks which are conducting racing
   20  programs subject to the following provisions; provided, however, no such
   21  written agreement shall be required of a franchised corporation licensed
   22  in accordance with section one thousand seven of this article.
   23    S 7. Section 32 of chapter 281 of  the  laws  of  1994,  amending  the
   24  racing,  pari-mutuel  wagering and breeding law  and other laws relating
   25  to simulcasting, as amended by section 7 of part O of chapter 59 of  the
   26  laws of 2012, is amended to read as follows:
   27    S  32. This act shall take effect immediately [and the pari-mutuel tax
   28  reductions in section six  of  this  act  shall  expire  and  be  deemed
   29  repealed  on  July  1,  2013]; provided, however, that nothing contained
   30  herein shall be deemed to affect the application, qualification, expira-
   31  tion, or repeal of any provision of law amended by any section  of  this
   32  act,  and  such provisions shall be applied or qualified or shall expire
   33  or be deemed repealed in the same manner, to the same extent and on  the
   34  same  date  as  the  case  may be as otherwise provided by law; provided
   35  further, however, that sections twenty-three and twenty-five of this act
   36  shall remain in full force and effect only until May 1, 1997 and at such
   37  time shall be deemed to be repealed.
   38    S 8. Section 54 of chapter 346 of  the  laws  of  1990,  amending  the
   39  racing, pari-mutuel wagering and breeding law and other laws relating to
   40  simulcasting  and the imposition of certain taxes, as amended by section
   41  8 of part O of chapter 59 of the laws of 2012, is  amended  to  read  as
   42  follows:
   43    S  54.  This  act  shall  take  effect immediately; provided, however,
   44  sections three through twelve of this act shall take effect  on  January
   45  1,  1991,  and  [section  1013  of  the racing, pari-mutuel wagering and
   46  breeding law, as added by section thirty-eight of this act, shall expire
   47  and be deemed repealed on July 1, 2013; and] section  eighteen  of  this
   48  act  shall take effect on July 1, 2008 and sections fifty-one and fifty-
   49  two of this act shall take effect as of the same date as chapter 772  of
   50  the laws of 1989 took effect.
   51    S  9.  Paragraph  (a)  of  subdivision 1 of section 238 of the racing,
   52  pari-mutuel wagering and breeding law, as amended by section 9 of part O
   53  of chapter 59 of the laws of 2012, is amended to read as follows:
   54    (a) The  franchised  corporation  authorized  under  this  chapter  to
   55  conduct pari-mutuel betting at a race meeting or races run thereat shall
   56  distribute  all sums deposited in any pari-mutuel pool to the holders of
       S. 2609                            91                            A. 3009
    1  winning tickets therein, provided such tickets be presented for  payment
    2  before  April  first  of  the year following the year of their purchase,
    3  less an amount which shall be established and  retained  by  such  fran-
    4  chised  corporation  of  between  twelve  to seventeen per centum of the
    5  total deposits in pools resulting from on-track regular bets, and  four-
    6  teen  to  twenty-one per centum of the total deposits in pools resulting
    7  from on-track multiple bets and fifteen to twenty-five per centum of the
    8  total deposits in pools resulting from on-track exotic bets and  fifteen
    9  to  thirty-six  per centum of the total deposits in pools resulting from
   10  on-track super exotic bets, plus the breaks. The retention  rate  to  be
   11  established  is subject to the prior approval of the racing and wagering
   12  board. Such rate may not be changed more than once per calendar  quarter
   13  to  be effective on the first day of the calendar quarter. "Exotic bets"
   14  and "multiple bets" shall have the meanings set forth  in  section  five
   15  hundred  nineteen  of this chapter.   "Super exotic bets" shall have the
   16  meaning set forth in section three hundred  one  of  this  chapter.  For
   17  purposes  of  this  section, a "pick six bet" shall mean a single bet or
   18  wager on the outcomes of six races. The breaks are hereby defined as the
   19  odd cents over any multiple of five for payoffs greater than one  dollar
   20  five  cents  but  less  than  five dollars, over any multiple of ten for
   21  payoffs greater than five dollars but  less  than  twenty-five  dollars,
   22  over  any  multiple  of twenty-five for payoffs greater than twenty-five
   23  dollars but less than two hundred fifty dollars, or over any multiple of
   24  fifty for payoffs over two hundred fifty dollars. Out of the  amount  so
   25  retained  there  shall  be  paid  by  such franchised corporation to the
   26  commissioner of taxation and finance, as a reasonable tax by  the  state
   27  for  the privilege of conducting pari-mutuel betting on the races run at
   28  the race meetings held by such  franchised  corporation,  the  following
   29  percentages  of  the  total  pool for regular and multiple bets five per
   30  centum of regular bets and four per centum of multiple bets plus  twenty
   31  per  centum  of  the  breaks;  for  exotic wagers seven and one-half per
   32  centum plus twenty per centum of the breaks, and for super  exotic  bets
   33  seven  and  one-half per centum plus fifty per centum of the breaks. For
   34  the period June first, nineteen hundred  ninety-five  through  September
   35  ninth, nineteen hundred ninety-nine, such tax on regular wagers shall be
   36  three  per  centum and such tax on multiple wagers shall be two and one-
   37  half per centum, plus twenty per centum of the breaks.  For  the  period
   38  September  tenth,  nineteen  hundred  ninety-nine  through March thirty-
   39  first, two thousand one, such tax on all wagers shall be  two  and  six-
   40  tenths  per  centum and for the period COMMENCING April first, two thou-
   41  sand one [through December thirty-first, two  thousand  thirteen],  such
   42  tax  on all wagers shall be one and six-tenths per centum, plus, in each
   43  such period, twenty per centum of the breaks. Payment to  the  New  York
   44  state  thoroughbred  breeding  and  development  fund by such franchised
   45  corporation shall be one-half of one per centum of total daily  on-track
   46  pari-mutuel  pools  resulting from regular, multiple and exotic bets and
   47  three per centum of super exotic bets provided, however,  that  for  the
   48  period September tenth, nineteen hundred ninety-nine through March thir-
   49  ty-first,  two thousand one, such payment shall be six-tenths of one per
   50  centum of regular, multiple and exotic pools and for the period COMMENC-
   51  ING April first, two thousand one [through  December  thirty-first,  two
   52  thousand thirteen], such payment shall be seven-tenths of one per centum
   53  of such pools.
   54    S  10. Subdivision 5 of section 1012 of the racing, pari-mutuel wager-
   55  ing and breeding law is REPEALED.
   56    S 11. This act shall take effect immediately.
       S. 2609                            92                            A. 3009
    1    S 2. Severability clause. If any clause, sentence, paragraph, subdivi-
    2  sion, section or part of this act shall be  adjudged  by  any  court  of
    3  competent  jurisdiction  to  be invalid, such judgment shall not affect,
    4  impair, or invalidate the remainder thereof, but shall  be  confined  in
    5  its  operation  to the clause, sentence, paragraph, subdivision, section
    6  or part thereof directly involved in the controversy in which such judg-
    7  ment shall have been rendered. It is hereby declared to be the intent of
    8  the legislature that this act would  have  been  enacted  even  if  such
    9  invalid provisions had not been included herein.
   10    S  3.  This  act shall take effect immediately provided, however, that
   11  the applicable effective date of Parts A through U of this act shall  be
   12  as specifically set forth in the last section of such Parts.