S T A T E   O F   N E W   Y O R K
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                                 8997--A

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                              June 18, 2009
                               ___________

Introduced  by M. of A. DESTITO -- read once and referred to the Commit-
  tee on Economic Development, Job Creation, Commerce  and  Industry  --
  committee  discharged,  bill amended, ordered reprinted as amended and
  recommitted to said committee

AN ACT to amend the economic development law, in  relation  to  the  New
  York  state  innovation  investment  act; and to amend the tax law, in
  relation to certain credits for eligible high-tech enterprises

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  Short  title. This act shall be known and may be cited as
the "New York state innovation investment act".
  S 2. Statement of legislative findings and declaration. It  is  hereby
found  and  declared that the development of a high-tech industrial base
of businesses centered on the innovation, invention, and manufacture  of
high-tech  devices  and  components  will  contribute  favorably  to the
state's economic sustenance and development. It is the public policy  of
the  state  to offer special incentives and assistance that will promote
the development of new high-tech businesses, the expansion  of  existing
high-tech  businesses and to do so without encouraging the relocation of
business investment from other areas of the state.
  S 3. The economic development law is amended by adding a  new  article
17 to read as follows:
                                ARTICLE 17
                NEW YORK STATE INNOVATION INVESTMENT ACT
SECTION 350. DEFINITIONS.
        351. INNOVATION TECHNOLOGY INVESTMENT PROGRAM.
        352. RESPONSIBILITIES OF THE COMMISSIONER.
  S  350.  DEFINITIONS. AS USED IN THIS ARTICLE, THE FOLLOWING WORDS AND
TERMS SHALL HAVE THE FOLLOWING MEANINGS UNLESS THE CONTEXT  SHALL  INDI-
CATE ANOTHER OR DIFFERENT MEANING OR INTENT:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD14408-03-9

              

A. 8997--A                          2

  (A)  "APPLICANT"  SHALL MEAN THE HIGH-TECH ENTERPRISE SEEKING APPROVAL
AS AN ELIGIBLE HIGH-TECH ENTERPRISE TO RECEIVE THE BENEFITS PURSUANT  TO
THIS ARTICLE.
  (B)  "COMMISSIONER"  SHALL  MEAN THE COMMISSIONER OF ECONOMIC DEVELOP-
MENT.
  (C) "HIGH-TECH ENTERPRISE" SHALL MEAN AN ENTERPRISE WHICH  IS  ENGAGED
IN THE DEVELOPMENT OR MANUFACTURING OF COMPUTER CHIPS OR NANOELECTRONICS
OR PHOTOVOLTAICS.
  (D)  "ELIGIBLE HIGH-TECH ENTERPRISE" SHALL MEAN A HIGH-TECH ENTERPRISE
WHICH IS APPROVED BY THE COMMISSIONER PURSUANT TO THE PROVISIONS OF THIS
ARTICLE AND WHICH INVESTS IN TANGIBLE PERSONAL PROPERTY AND OTHER TANGI-
BLE PROPERTY, INCLUDING BUILDINGS AND STRUCTURAL COMPONENTS OF BUILDINGS
AND CAPITAL EQUIPMENT, DESCRIBED IN SUBPARAGRAPHS (I), (II), (III),  AND
CLAUSE  (A)  OR  (C) OF SUBPARAGRAPH (V) OF PARAGRAPH (B) OF SUBDIVISION
TWELVE-B OF SECTION TWO HUNDRED TEN OF THE TAX LAW, OR AS  DESCRIBED  IN
SUBPARAGRAPHS (A), (B), (C), AND CLAUSE (I) OR (III) OF SUBPARAGRAPH (E)
OF PARAGRAPH TWO OF SUBSECTION (J) OF SECTION SIX HUNDRED SIX OF THE TAX
LAW,  THE  BASIS  OF WHICH FOR FEDERAL INCOME TAX PURPOSES WILL EQUAL OR
EXCEED TEN MILLION DOLLARS.
  (E) "EFFECTIVE DATE" SHALL MEAN THE DATE WHICH IS  THE  LATER  OF  THE
DATE OF THE APPLICATION TO THE COMMISSIONER BY THE HIGH-TECH ENTERPRISE,
OR  THE  DATE  BY  WHICH  THE HIGH-TECH ENTERPRISE HAS PLACED IN SERVICE
TANGIBLE PERSONAL PROPERTY AND OTHER TANGIBLE PROPERTY AS SET  FORTH  IN
SUBDIVISION  (D)  OF THIS SECTION, THE BASIS OF WHICH FOR FEDERAL INCOME
TAX PURPOSES WILL EQUAL OR EXCEED TEN MILLION DOLLARS.
  S 351. INNOVATION TECHNOLOGY INVESTMENT PROGRAM. (A) THERE  IS  HEREBY
CREATED IN THE DEPARTMENT AN INNOVATION TECHNOLOGY INVESTMENT PROGRAM TO
CREATE  ECONOMIC INCENTIVES FOR THE DEVELOPMENT OF HIGH-TECH ENTERPRISES
INCLUDING THOSE ENTERPRISES WHICH ARE  ENGAGED  IN  THE  DEVELOPMENT  OR
MANUFACTURING  OF  COMPUTER  CHIPS,  NANOELECTRONICS OR PHOTOVOLTAICS. A
BUSINESS WHICH IS DESIGNATED BY THE COMMISSIONER AS A  HIGH-TECH  ENTER-
PRISE  PURSUANT  TO  THIS  ARTICLE  AND WHICH PLACES IN SERVICE TANGIBLE
PERSONAL PROPERTY INCLUDING BUILDINGS AND CAPITAL EQUIPMENT  WITH  BASIS
IN AN AMOUNT EQUAL TO OR EXCEEDING TEN MILLION DOLLARS SHALL BE ELIGIBLE
FOR  SPECIFIED  TAX  BENEFITS  RELATING  TO  REAL  PROPERTY  TAXES,  TAX
REDUCTION CREDITS, INVESTMENT CREDITS, EMPLOYMENT INCENTIVE CREDITS  AND
WAGE TAX CREDITS AS SET FORTH IN THE TAX LAW.
  (B) DEFINITIONS. (1) THE TERM "BUSINESS TAX BENEFIT PERIOD" SHALL MEAN
THE  TEN TAXABLE YEARS STARTING WITH THE TAXABLE YEAR IN WHICH THE BUSI-
NESS ENTERPRISE'S BENEFIT PERIOD COMMENCEMENT DATE OCCURS, BUT ONLY WITH
RESPECT TO EACH OF SUCH BUSINESS TAX BENEFIT PERIOD YEARS FOR WHICH  THE
EMPLOYMENT TEST IS MET.
  (2)  THE  TERM  "BENEFIT PERIOD COMMENCEMENT DATE" SHALL MEAN THE DATE
WHEN PROPERTY CONSTITUTING THE PROJECT IS FIRST PLACED IN SERVICE.
  (3) THE TERM "LOCATIONS OF ITS OPERATIONS IDENTIFIED  TO  THE  COMMIS-
SIONER  IN ITS APPLICATION TO BE TREATED AS AN ELIGIBLE HIGH-TECH ENTER-
PRISE" SHALL MEAN THE LOCATION OR LOCATIONS THAT  THE  HIGH-TECH  ENTER-
PRISE IDENTIFIED TO THE COMMISSIONER IN ITS APPLICATION TO BE TREATED AS
AN  ELIGIBLE  HIGH-TECH  ENTERPRISE UNDER SECTION THREE HUNDRED FIFTY OF
THIS ARTICLE.
  (C) FOR THE PURPOSE OF DETERMINING ELIGIBILITY  FOR  CERTAIN  BENEFITS
UNDER THIS ARTICLE AND THE CORRESPONDING TAX LAW PROVISIONS, THE FOLLOW-
ING  PROVISIONS AND DEFINITIONS SHALL APPLY AND SHALL BE UTILIZED BY THE
COMMISSIONER OF TAXATION AND FINANCE TO DETERMINE SUCH ELIGIBILITY:
  (1) THE EMPLOYMENT TEST SHALL BE MET WITH RESPECT TO A TAXABLE YEAR IF
THE BUSINESS ENTERPRISE'S EMPLOYMENT NUMBER AT LOCATIONS  OF  ITS  OPER-

A. 8997--A                          3

ATIONS  IDENTIFIED  TO THE COMMISSIONER IN ITS APPLICATION TO BE TREATED
AS AN ELIGIBLE HIGH-TECH ENTERPRISE FOR  SUCH  TAXABLE  YEAR  EQUALS  OR
EXCEEDS ITS EMPLOYMENT NUMBER IN SUCH LOCATIONS FOR THE BASE PERIOD.
  (2)  THE  TERM  "BASE PERIOD" MEANS THE FIVE TAXABLE YEARS IMMEDIATELY
PRECEDING THE TEST YEAR.   IF THE HIGH-TECH ENTERPRISE  HAS  FEWER  THAN
FIVE  SUCH  YEARS, THEN THE TERM "BASE PERIOD" MEANS SUCH SMALLER SET OF
YEARS.
  (3) THE TERM "TEST YEAR" MEANS THE LAST TAXABLE YEAR OF THE  HIGH-TECH
ENTERPRISE  ENDING  BEFORE THE TEST DATE. IF A HIGH-TECH ENTERPRISE DOES
NOT HAVE A TAXABLE YEAR THAT ENDS ON  OR  BEFORE  THE  TEST  DATE,  SUCH
ENTERPRISE SHALL BE DEEMED TO HAVE A TEST YEAR WHICH SHALL BE EITHER THE
LAST  CALENDAR YEAR ENDING ON OR BEFORE ITS TEST DATE, OR IF SUCH ENTER-
PRISE HAS AS ITS TAXABLE YEAR A FISCAL YEAR, THE LAST SUCH  FISCAL  YEAR
ENDING  ON  OR  BEFORE  ITS TEST DATE, WHETHER OR NOT SUCH ENTERPRISE IN
FACT HAD A TAXABLE YEAR DURING THAT PERIOD.
  (4) THE TERM "TEST DATE" MEANS THE DATE ON WHICH THE HIGH-TECH  ENTER-
PRISE  FILED  ITS  SUBMISSION AS AN ELIGIBLE HIGH-TECH ENTERPRISE TO THE
COMMISSIONER.
  (5) THE TERM "TAXABLE YEAR" MEANS THE TAXABLE YEAR  OF  THE  HIGH-TECH
ENTERPRISE   UNDER   SECTION   ONE  HUNDRED  EIGHTY-THREE,  ONE  HUNDRED
EIGHTY-FOUR, ONE HUNDRED  EIGHTY-FIVE  OR  FORMER  SECTION  ONE  HUNDRED
EIGHTY-SIX OF ARTICLE NINE, OR UNDER ARTICLE NINE-A OR TWENTY-TWO OF THE
TAX LAW.
  (6)  THE TERM "NET NEW EMPLOYEES" SHALL MEAN THE EXCESS OF THE EMPLOY-
MENT NUMBER OF THE ELIGIBLE HIGH-TECH ENTERPRISE FOR THE TAXABLE YEAR AT
THE LOCATIONS OF ITS OPERATIONS IDENTIFIED TO THE  COMMISSIONER  IN  ITS
APPLICATION  TO BE TREATED AS AN ELIGIBLE HIGH-TECH ENTERPRISE, OVER THE
EMPLOYMENT NUMBER OF THE ELIGIBLE HIGH-TECH ENTERPRISE AT SUCH LOCATIONS
FOR THE BASE PERIOD.
  (7) THE TERM "EMPLOYMENT NUMBER" SHALL  MEAN  THE  AVERAGE  NUMBER  OF
INDIVIDUALS,  EXCLUDING  GENERAL  EXECUTIVE  OFFICERS  (IN THE CASE OF A
CORPORATION) EMPLOYED FULL-TIME BY THE ENTERPRISE FOR AT LEAST  ONE-HALF
OF  THE  TAXABLE  YEAR. SUCH NUMBER SHALL BE COMPUTED BY DETERMINING THE
NUMBER OF SUCH INDIVIDUALS EMPLOYED BY THE TAXPAYER ON THE  THIRTY-FIRST
DAY  OF MARCH, THE THIRTIETH DAY OF JUNE, THE THIRTIETH DAY OF SEPTEMBER
AND THE THIRTY-FIRST DAY OF DECEMBER DURING THE APPLICABLE TAXABLE YEAR,
ADDING TOGETHER THE NUMBER OF  SUCH  INDIVIDUALS  DETERMINED  TO  BE  SO
EMPLOYED  ON  EACH OF SUCH DATES AND DIVIDING THE SUM SO OBTAINED BY THE
NUMBER OF SUCH DATES OCCURRING WITHIN SUCH APPLICABLE TAXABLE YEAR. SUCH
NUMBER SHALL NOT INCLUDE INDIVIDUALS EMPLOYED WITHIN  THE  STATE  WITHIN
THE IMMEDIATELY PRECEDING SIXTY MONTHS BY A RELATED PERSON TO THE ELIGI-
BLE  HIGH-TECH  ENTERPRISE,  AS SUCH TERM "RELATED PERSON" IS DEFINED IN
SUBPARAGRAPH (C) OF PARAGRAPH THREE OF SUBSECTION (B)  OF  SECTION  FOUR
HUNDRED  SIXTY-FIVE  OF  THE  FEDERAL  INTERNAL  REVENUE  CODE. FOR THIS
PURPOSE, A "RELATED PERSON" SHALL INCLUDE AN  ENTITY  WHICH  WOULD  HAVE
QUALIFIED  AS A "RELATED PERSON" TO THE ELIGIBLE HIGH-TECH ENTERPRISE IF
IT HAD NOT BEEN DISSOLVED, LIQUIDATED, MERGED  WITH  ANOTHER  ENTITY  OR
OTHERWISE CEASED TO EXIST OR OPERATE.
  (D)  CESSATION  OF STATUS. A HIGH-TECH ENTERPRISE SHALL CEASE TO BE AN
ELIGIBLE HIGH-TECH ENTERPRISE ONLY IF IT CEASES TO MEET THE REQUIREMENTS
FOR SUCH TREATMENT UNDER SUBDIVISION (D) OF SECTION THREE HUNDRED  FIFTY
OF  THIS  ARTICLE. SUCH CESSATION OF STATUS SHALL BE EFFECTIVE AS OF THE
DATE ON WHICH THE ELIGIBLE  HIGH-TECH  ENTERPRISE  FAILS  TO  MEET  SUCH
REQUIREMENTS.
  S  352.  RESPONSIBILITIES  OF THE COMMISSIONER. THE COMMISSIONER SHALL
PROMULGATE REGULATIONS:

A. 8997--A                          4

  (A) REGARDING THE PROCESS FOR HIGH-TECH ENTERPRISES TO  BE  DESIGNATED
AS  ELIGIBLE  HIGH-TECH  ENTERPRISES  FOR PURPOSES OF THIS ARTICLE. SUCH
REGULATIONS SHALL NOT IMPOSE ANY ADDITIONAL CONSIDERATIONS FOR TREATMENT
AS AN ELIGIBLE HIGH-TECH ENTERPRISE OTHER THAN REQUIRING  THE  APPLICANT
TO SUBMIT DOCUMENTATION THAT IT WILL SATISFY THE CONDITIONS SET FORTH IN
SUBDIVISION (D) OF SECTION THREE HUNDRED FIFTY OF THIS ARTICLE AND SHALL
REQUIRE THE APPLICANT TO IDENTIFY THE LOCATION OR LOCATIONS THAT WILL BE
THE SITUS OF THE INVESTMENT UNDER SUCH SUBDIVISION;
  (B)  IN  CONSULTATION WITH THE COMMISSIONER OF THE STATE DEPARTMENT OF
TAXATION AND FINANCE, GOVERNING THE PROCEDURE AND  NECESSARY  FORMS  FOR
TAXPAYERS  ENTITLED TO THE TAX CREDITS AS ELIGIBLE HIGH-TECH ENTERPRISES
TO RECEIVE SUCH CREDITS; AND
  (C) IN CONSULTATION WITH THE COMMISSIONER OF LABOR, FOR PROGRAM EVALU-
ATION AND COORDINATE IMPLEMENTATION OF AN EVALUATION  SYSTEM,  WHICH  IS
CAPABLE  OF  COMPILING AND ANALYZING ACCURATE AND CONSISTENT INFORMATION
NECESSARY FOR AN ASSESSMENT OF WHETHER STATUTORY OBJECTIVES AND CRITERIA
ARE BEING MET; AND
  THE FAILURE OF THE COMMISSIONER TO PROMULGATE THE REGULATIONS REQUIRED
IN THIS SECTION SHALL NOT PREVENT A TAXPAYER QUALIFIED  AS  AN  ELIGIBLE
HIGH-TECH  ENTERPRISE  FROM CLAIMING AND RECEIVING THE TAX CREDITS WHICH
IT IS ENTITLED TO UNDER THE RELEVANT PROVISIONS OF THE TAX LAW.
  S 4. The tax law is amended by adding four new sections 33, 34, 35 and
36 to read as follows:
  S 33. INNOVATION TECHNOLOGY CREDIT  FOR  REAL  PROPERTY  TAXES.    (A)
ALLOWANCE  OF  CREDIT.  A TAXPAYER WHICH IS AN ELIGIBLE HIGH-TECH ENTER-
PRISE, AS DEFINED IN SUBDIVISION (D) OF SECTION THREE HUNDRED  FIFTY  OF
THE ECONOMIC DEVELOPMENT LAW, OR WHICH IS A SOLE PROPRIETOR OF AN ELIGI-
BLE HIGH-TECH ENTERPRISE OR A MEMBER OF A PARTNERSHIP WHICH IS AN ELIGI-
BLE  HIGH-TECH  ENTERPRISE,  AND  WHICH  IS SUBJECT TO TAX UNDER ARTICLE
NINE-A OR TWENTY-TWO OF THIS CHAPTER, SHALL BE ALLOWED A CREDIT  AGAINST
SUCH  TAX,  PURSUANT  TO THE PROVISIONS REFERENCED IN SUBDIVISION (F) OF
THIS SECTION, FOR ELIGIBLE REAL PROPERTY  TAXES  FOR  ITS  BUSINESS  TAX
BENEFIT PERIOD.
  (B)  AMOUNT OF CREDIT. AN ELIGIBLE HIGH-TECH ENTERPRISE SHALL BE ENTI-
TLED TO RECEIVE A CREDIT EQUAL TO THE GREATER OF:  (1) THE  PRODUCT  (OR
PRO RATA SHARE OF THE PRODUCT, IN THE CASE OF A MEMBER OF A PARTNERSHIP)
OF  TWENTY-FIVE  PERCENT OF THE TOTAL WAGES, HEALTH BENEFITS AND RETIRE-
MENT BENEFITS PAID TO OR ON BEHALF OF NET NEW EMPLOYEES DURING THE TAXA-
BLE YEAR, PROVIDED HOWEVER, THAT THE TOTAL AMOUNT OF  THE  CREDIT  SHALL
NOT EXCEED TEN THOUSAND DOLLARS FOR EACH SUCH EMPLOYEE, OR
  (2)  THE  PRODUCT OF (A) TEN PERCENT OF THE GREATER OF (I) THE COST OR
OTHER BASIS FOR FEDERAL INCOME TAX PURPOSES OF REAL PROPERTY,  INCLUDING
BUILDINGS  AND STRUCTURAL COMPONENTS OF BUILDINGS AND CAPITAL EQUIPMENT,
OWNED BY THE ELIGIBLE HIGH-TECH ENTERPRISE AT  LOCATIONS  OF  ITS  OPER-
ATIONS  IDENTIFIED TO THE COMMISSIONER OF ECONOMIC DEVELOPMENT AS DETER-
MINED ON THE EFFECTIVE DATE, AS DEFINED IN SUBDIVISION  (E)  OF  SECTION
THREE HUNDRED FIFTY OF THE ECONOMIC DEVELOPMENT LAW, OR (II) THE COST OR
OTHER  BASIS  FOR  FEDERAL  INCOME  TAX  PURPOSES  OF SUCH REAL PROPERTY
DESCRIBED IN CLAUSE (I) OF THIS SUBPARAGRAPH ON  THE  LAST  DAY  OF  THE
TAXABLE  YEAR,  AND  (B)  THE GREATER OF (I) THE PERCENTAGE OF SUCH REAL
PROPERTY DESCRIBED IN CLAUSE (I) OF SUBPARAGRAPH (A) OF  THIS  PARAGRAPH
WHICH  IS  PHYSICALLY OCCUPIED AND USED BY THE ELIGIBLE HIGH-TECH ENTER-
PRISE, OR (II) THE PERCENTAGE OF SUCH  COST  OR  OTHER  BASIS  WHICH  IS
ATTRIBUTABLE  TO  THE  CONSTRUCTION, EXPANSION OR REHABILITATION OF SUCH
PROPERTY, RATHER THAN THE ACQUISITION OF  SUCH  REAL  PROPERTY,  BY  THE
ELIGIBLE HIGH-TECH ENTERPRISE.

A. 8997--A                          5

  PROVIDED,  HOWEVER,  IF  THE  PERCENTAGE  OF SUCH COST OR OTHER BASIS,
WHICH IS ATTRIBUTABLE TO THE CONSTRUCTION, EXPANSION  OR  REHABILITATION
OF SUCH REAL PROPERTY EQUALS OR EXCEEDS FIFTY PERCENT, THEN THE PERCENT-
AGE DESCRIBED IN CLAUSE (II) OF SUBPARAGRAPH (B) OF THIS PARAGRAPH SHALL
BE  DEEMED  TO  BE  ONE HUNDRED PERCENT. FOR PURPOSES OF COMPUTING TOTAL
WAGES, HEALTH BENEFITS AND RETIREMENT BENEFITS, WAGES,  HEALTH  BENEFITS
AND  RETIREMENT  BENEFITS  FOR EACH EMPLOYEE IN EXCESS OF FORTY THOUSAND
DOLLARS SHALL BE EXCLUDED FROM SUCH COMPUTATION. PROVIDED  FURTHER,  THE
AMOUNT  OF  THE  CREDIT  MAY  NOT  EXCEED THE CREDIT AMOUNT SET FORTH IN
SUBDIVISION (C) OF THIS SECTION.
  (C) ELIGIBLE REAL PROPERTY TAXES. THE  TERM  "ELIGIBLE  REAL  PROPERTY
TAXES" MEANS TAXES IMPOSED ON REAL PROPERTY WHICH IS OWNED BY THE ELIGI-
BLE HIGH-TECH ENTERPRISE AT THE LOCATION OF ITS OPERATIONS IDENTIFIED TO
THE  COMMISSIONER  IN  ITS  APPLICATION  TO  BE  TREATED  AS AN ELIGIBLE
HIGH-TECH ENTERPRISE, PROVIDED SUCH  TAXES  ARE  PAID  BY  THE  ELIGIBLE
HIGH-TECH  ENTERPRISE  WHICH  IS THE OWNER OF THE REAL PROPERTY AND SUCH
TAXES BECOME A LIEN ON THE REAL PROPERTY DURING  THE  TAXABLE  YEAR.  IN
ADDITION,  "ELIGIBLE REAL PROPERTY TAXES" SHALL INCLUDE TAXES PAID BY AN
ELIGIBLE HIGH-TECH ENTERPRISE WHICH IS A LESSEE OF REAL PROPERTY IF  THE
FOLLOWING CONDITIONS ARE SATISFIED:
  (1) THE TAXES MUST BE PAID BY THE LESSEE PURSUANT TO EXPLICIT REQUIRE-
MENTS IN A WRITTEN LEASE,
  (2)  SUCH  TAXES BECOME A LIEN ON THE REAL PROPERTY DURING THE TAXABLE
YEAR AND
  (3) THE LESSEE HAS MADE DIRECT PAYMENT OF SUCH  TAXES  TO  THE  TAXING
AUTHORITY  AND HAS RECEIVED A RECEIPT FOR SUCH PAYMENT OF TAXES FROM THE
TAXING AUTHORITY. IN ADDITION, THE TERM "ELIGIBLE REAL  PROPERTY  TAXES"
INCLUDES PAYMENTS IN LIEU OF TAXES MADE BY THE ELIGIBLE HIGH-TECH ENTER-
PRISE  TO  THE STATE, A MUNICIPAL CORPORATION OR A PUBLIC BENEFIT CORPO-
RATION PURSUANT TO A WRITTEN AGREEMENT ENTERED INTO BETWEEN THE ELIGIBLE
HIGH-TECH ENTERPRISE AND THE STATE,  MUNICIPAL  CORPORATION,  OR  PUBLIC
BENEFIT CORPORATION.
  (4) PROVIDED, HOWEVER, A PAYMENT IN LIEU OF TAXES MADE BY THE ELIGIBLE
HIGH-TECH  ENTERPRISE  PURSUANT TO A WRITTEN AGREEMENT SHALL NOT CONSTI-
TUTE ELIGIBLE REAL PROPERTY TAXES IN ANY TAXABLE YEAR TO THE EXTENT THAT
SUCH PAYMENT EXCEEDS THE PRODUCT OF (A) THE ASSESSED VALUE OF THE  PROP-
ERTY,  AND  (B)  THE  CURRENT TAX RATE WITHIN THE TAXING JURISDICTION IN
WHICH SUCH PROPERTY IS LOCATED, AS MOST RECENTLY REPORTED TO THE COMMIS-
SIONER BY THE SECRETARY OF THE STATE BOARD OF REAL PROPERTY SERVICES, OR
HIS OR HER DESIGNEE.
  (D) CREDIT RECAPTURE. WHERE AN ELIGIBLE HIGH-TECH ENTERPRISE'S  ELIGI-
BLE  REAL  PROPERTY  TAXES WHICH WERE THE BASIS FOR THE ALLOWANCE OF THE
CREDIT PROVIDED FOR UNDER THIS SECTION ARE  SUBSEQUENTLY  REDUCED  AS  A
RESULT  OF  A  FINAL  ORDER IN ANY PROCEEDING UNDER ARTICLE SEVEN OF THE
REAL PROPERTY TAX LAW OR OTHER PROVISION OF LAW, THE TAXPAYER SHALL  ADD
BACK,  IN  THE  TAXABLE  YEAR  IN  WHICH SUCH FINAL ORDER IS ISSUED, THE
EXCESS OF (1) THE AMOUNT OF CREDIT ORIGINALLY ALLOWED FOR A TAXABLE YEAR
OVER (2) THE AMOUNT OF CREDIT DETERMINED BASED UPON THE REDUCED ELIGIBLE
REAL PROPERTY TAXES. IF SUCH FINAL ORDER REDUCES REAL PROPERTY TAXES FOR
MORE THAN ONE YEAR,  THE  TAXPAYER  MUST  DETERMINE  HOW  MUCH  OF  SUCH
REDUCTION  IS  ATTRIBUTABLE TO EACH YEAR COVERED BY SUCH FINAL ORDER AND
CALCULATE THE AMOUNT OF CREDIT WHICH IS REQUIRED BY THIS SUBDIVISION  TO
BE RECAPTURED FOR EACH YEAR BASED ON SUCH REDUCTION.
  (E)  REFUND.    IF THE AMOUNT OF THE CREDIT ALLOWED UNDER THIS SECTION
FOR ANY TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S TAX FOR SUCH YEAR,  THE
EXCESS  SHALL  BE  TREATED  AS  AN  OVERPAYMENT OF TAX TO BE CREDITED OR

A. 8997--A                          6

REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION SIX HUNDRED EIGHT-
Y-SIX OF THIS CHAPTER, PROVIDED, HOWEVER, THAT NO INTEREST SHALL BE PAID
THEREON.
  (F) DEFINITIONS AND CROSS-REFERENCES. FOR DEFINITIONS OF TERMS USED IN
THIS  SECTION  SEE  SECTION  TWO OF THIS ARTICLE. FOR APPLICATION OF THE
CREDIT PROVIDED FOR IN THIS SECTION, SEE  THE  FOLLOWING  PROVISIONS  OF
THIS CHAPTER:
  (1) ARTICLE 9-A: SECTION 210: SUBDIVISION 27-A.
  (2) ARTICLE 22: SECTION 606: SUBSECTIONS (I) AND (BB-1).
  S  34.  INNOVATION  TECHNOLOGY TAX REDUCTION CREDIT.  (A) ALLOWANCE OF
CREDIT. A TAXPAYER WHICH IS AN ELIGIBLE HIGH-TECH ENTERPRISE,  OR  WHICH
IS  A SOLE PROPRIETOR OF AN ELIGIBLE HIGH-TECH ENTERPRISE OR A MEMBER OF
A PARTNERSHIP WHICH IS AN ELIGIBLE HIGH-TECH ENTERPRISE,  AND  WHICH  IS
SUBJECT TO TAX UNDER ARTICLE NINE-A OR TWENTY-TWO OF THIS CHAPTER, SHALL
BE  ALLOWED A CREDIT AGAINST SUCH TAX, PURSUANT TO THE PROVISIONS REFER-
ENCED IN SUBDIVISION (G) OF THIS SECTION, TO BE COMPUTED AS  HEREINAFTER
PROVIDED FOR ITS BUSINESS TAX BENEFIT PERIOD.
  (B) AMOUNT OF CREDIT. THE AMOUNT OF THE CREDIT SHALL BE THE PRODUCT OF
(1)  THE  BENEFIT PERIOD FACTOR, (2) THE EMPLOYMENT INCREASE FACTOR, (3)
THE LOCATION ALLOCATION FACTOR AND (4) THE TAX FACTOR.
  (C) BENEFIT PERIOD FACTOR. THE BENEFIT PERIOD FACTOR SHALL  EQUAL  1.0
FOR EACH TAXABLE YEAR OF THE BUSINESS TAX BENEFIT PERIOD.
  (D)  EMPLOYMENT INCREASE FACTOR. (1) THE EMPLOYMENT INCREASE FACTOR IS
THE AMOUNT, NOT TO EXCEED 1.0, WHICH IS THE GREATER OF:
  (I) THE EXCESS  OF  THE  ELIGIBLE  HIGH-TECH  ENTERPRISE'S  EMPLOYMENT
NUMBER AT THE LOCATIONS OF ITS OPERATIONS IDENTIFIED TO THE COMMISSIONER
IN  ITS  APPLICATION  TO BE TREATED AS AN ELIGIBLE HIGH-TECH ENTERPRISE,
OVER THE ELIGIBLE HIGH-TECH ENTERPRISE'S TEST YEAR EMPLOYMENT NUMBER  AT
SUCH  LOCATION,  DIVIDED  BY  SUCH  TEST  YEAR EMPLOYMENT NUMBER AT SUCH
LOCATION; OR
  (II) THE EXCESS OF  THE  ELIGIBLE  HIGH-TECH  ENTERPRISE'S  EMPLOYMENT
NUMBER  IN  SUCH  LOCATIONS  FOR  THE  TAXABLE  YEAR  OVER  THE ELIGIBLE
HIGH-TECH ENTERPRISE'S TEST YEAR EMPLOYMENT NUMBER  IN  SUCH  LOCATIONS,
DIVIDED BY 100.
  (2)  FOR PURPOSES OF PARAGRAPH ONE OF THIS SUBDIVISION, WHERE THERE IS
AN EXCESS AS DESCRIBED IN  SUCH  PARAGRAPH,  AND  WHERE  THE  TEST  YEAR
EMPLOYMENT  NUMBER  AS  SUCH  TERMS ARE DEFINED IN SECTION THREE HUNDRED
FIFTY-ONE OF THE ECONOMIC DEVELOPMENT LAW IS ZERO, THEN  THE  EMPLOYMENT
INCREASE FACTOR SHALL BE 1.0.
  (E)  LOCATION  ALLOCATION FACTOR. THE LOCATION ALLOCATION FACTOR SHALL
BE THE  PERCENTAGE  REPRESENTING  THE  ELIGIBLE  HIGH-TECH  ENTERPRISE'S
ECONOMIC  PRESENCE  AT  LOCATIONS  OF  ITS  OPERATIONS IDENTIFIED TO THE
COMMISSIONER OF ECONOMIC DEVELOPMENT IN ITS APPLICATION TO BE TREATED AS
AN ELIGIBLE HIGH-TECH ENTERPRISE. THIS PERCENTAGE SHALL BE COMPUTED BY:
  (1) ASCERTAINING THE PERCENTAGE WHICH THE AVERAGE VALUE OF THE  ELIGI-
BLE  HIGH-TECH ENTERPRISE'S REAL AND TANGIBLE PERSONAL PROPERTY, WHETHER
OWNED OR RENTED TO IT, AT LOCATIONS OF ITS OPERATIONS IDENTIFIED TO  THE
COMMISSIONER OF ECONOMIC DEVELOPMENT IN ITS APPLICATION TO BE TREATED AS
AN  ELIGIBLE  HIGH-TECH  ENTERPRISE  DURING  THE  PERIOD  COVERED BY THE
TAXPAYER'S REPORT OR RETURN BEARS TO THE AVERAGE VALUE OF  THE  ELIGIBLE
HIGH-TECH  ENTERPRISE'S  REAL  AND  TANGIBLE  PERSONAL PROPERTY, WHETHER
OWNED OR RENTED TO IT, WITHIN THE STATE DURING SUCH PERIOD; AND
  (2) ASCERTAINING THE PERCENTAGE OF THE TOTAL WAGES, SALARIES AND OTHER
PERSONAL SERVICE COMPENSATION, SIMILARLY COMPUTED, DURING SUCH PERIOD OF
EMPLOYEES, EXCEPT GENERAL EXECUTIVE OFFICERS, OF THE ELIGIBLE  HIGH-TECH
ENTERPRISE AT LOCATIONS OF ITS OPERATIONS IDENTIFIED TO THE COMMISSIONER

A. 8997--A                          7

OF  ECONOMIC DEVELOPMENT IN ITS APPLICATION TO BE TREATED AS AN ELIGIBLE
HIGH-TECH ENTERPRISE, TO THE TOTAL WAGES, SALARIES  AND  OTHER  PERSONAL
SERVICE COMPENSATION, SIMILARLY COMPUTED, DURING SUCH PERIOD, OF ALL THE
ELIGIBLE  HIGH-TECH  ENTERPRISE'S  EMPLOYEES  WITHIN  THE  STATE, EXCEPT
GENERAL EXECUTIVE OFFICERS; AND
  (3) ADDING TOGETHER THE PERCENTAGES SO  DETERMINED  AND  DIVIDING  THE
RESULT  BY THE NUMBER OF PERCENTAGES. FOR PURPOSES OF ARTICLE TWENTY-TWO
OF THIS CHAPTER, REFERENCES IN  THIS  SUBDIVISION  TO  PROPERTY,  WAGES,
SALARIES  AND  OTHER PERSONAL SERVICE COMPENSATION SHALL BE DEEMED TO BE
REFERENCES TO SUCH ITEMS CONNECTED WITH THE CONDUCT OF A BUSINESS.
  (F) TAX FACTOR. (1) GENERAL. THE TAX FACTOR SHALL BE, IN THE  CASE  OF
ARTICLE  NINE-A OF THIS CHAPTER, THE LARGER OF THE AMOUNTS OF TAX DETER-
MINED FOR THE TAXABLE YEAR UNDER PARAGRAPHS (A) AND (C)  OF  SUBDIVISION
ONE OF SECTION TWO HUNDRED TEN OF THIS CHAPTER. THE TAX FACTOR SHALL BE,
IN  THE  CASE  OF ARTICLE TWENTY-TWO OF THIS CHAPTER, THE TAX DETERMINED
FOR THE TAXABLE YEAR UNDER SUBSECTIONS (A) THROUGH (D)  OF  SECTION  SIX
HUNDRED ONE OF THIS CHAPTER.
  (2)  SOLE  PROPRIETORS,  PARTNERS  AND S CORPORATION SHAREHOLDERS. (A)
WHERE THE TAXPAYER IS A SOLE PROPRIETOR OF AN ELIGIBLE HIGH-TECH  ENTER-
PRISE,  THE  TAXPAYER'S  TAX  FACTOR SHALL BE THAT PORTION OF THE AMOUNT
DETERMINED IN PARAGRAPH ONE OF THIS SUBDIVISION WHICH IS ATTRIBUTABLE TO
THE INCOME OF THE ELIGIBLE HIGH-TECH ENTERPRISE. SUCH ATTRIBUTION  SHALL
BE  MADE  IN ACCORDANCE WITH THE RATIO OF THE TAXPAYER'S INCOME FROM THE
ELIGIBLE HIGH-TECH ENTERPRISE ALLOCATED WITHIN THE STATE, ENTERING  INTO
NEW  YORK  ADJUSTED  GROSS  INCOME,  TO THE TAXPAYER'S NEW YORK ADJUSTED
GROSS INCOME, OR IN ACCORDANCE WITH SUCH OTHER METHODS  AS  THE  COMMIS-
SIONER  MAY  PRESCRIBE  AS  PROVIDING  AN APPORTIONMENT WHICH REASONABLY
REFLECTS THE PORTION OF THE TAXPAYER'S TAX ATTRIBUTABLE TO THE INCOME OF
THE ELIGIBLE HIGH-TECH ENTERPRISE. IN NO EVENT MAY THE RATIO  SO  DETER-
MINED EXCEED 1.0.
  (B)(I)  WHERE  THE  TAXPAYER  IS A MEMBER OF A PARTNERSHIP WHICH IS AN
ELIGIBLE HIGH-TECH ENTERPRISE, THE TAXPAYER'S TAX FACTOR SHALL  BE  THAT
PORTION  OF  THE  AMOUNT DETERMINED IN PARAGRAPH ONE OF THIS SUBDIVISION
WHICH IS ATTRIBUTABLE TO THE INCOME OF THE PARTNERSHIP. SUCH ATTRIBUTION
SHALL BE MADE IN ACCORDANCE WITH THE RATIO OF THE PARTNER'S INCOME  FROM
THE  PARTNERSHIP  ALLOCATED  WITHIN  THE  STATE  TO THE PARTNER'S ENTIRE
INCOME, OR IN ACCORDANCE WITH SUCH OTHER METHODS AS THE COMMISSIONER MAY
PRESCRIBE AS PROVIDING AN APPORTIONMENT WHICH  REASONABLY  REFLECTS  THE
PORTION  OF THE PARTNER'S TAX ATTRIBUTABLE TO THE INCOME OF THE PARTNER-
SHIP. IN NO EVENT MAY THE RATIO SO DETERMINED EXCEED 1.0.
  (II) FOR PURPOSES OF ARTICLE NINE-A OF THIS CHAPTER, THE  TERM  "PART-
NER'S  INCOME  FROM  THE PARTNERSHIP" MEANS PARTNERSHIP ITEMS OF INCOME,
GAIN, LOSS AND DEDUCTION, AND NEW YORK MODIFICATIONS  THERETO,  ENTERING
INTO  ENTIRE  NET INCOME, MINIMUM TAXABLE INCOME, ALTERNATIVE ENTIRE NET
INCOME OR ENTIRE NET INCOME PLUS COMPENSATION AND  THE  TERM  "PARTNER'S
ENTIRE INCOME" MEANS ENTIRE NET INCOME, MINIMUM TAXABLE INCOME, ALTERNA-
TIVE ENTIRE NET INCOME OR ENTIRE NET INCOME PLUS COMPENSATION, ALLOCATED
WITHIN  THE  STATE.  FOR PURPOSES OF ARTICLE TWENTY-TWO OF THIS CHAPTER,
THE TERM "PARTNER'S INCOME FROM THE PARTNERSHIP" MEANS PARTNERSHIP ITEMS
OF INCOME, GAIN, LOSS AND DEDUCTION, AND NEW YORK MODIFICATIONS THERETO,
ENTERING INTO NEW YORK ADJUSTED GROSS INCOME, AND  THE  TERM  "PARTNER'S
ENTIRE INCOME" MEANS NEW YORK ADJUSTED GROSS INCOME.
  (C)  WHERE  THE  TAXPAYER IS A SHAREHOLDER OF A NEW YORK S CORPORATION
WHICH IS AN ELIGIBLE HIGH-TECH ENTERPRISE, THE SHAREHOLDER'S TAX  FACTOR
SHALL  BE THAT PORTION OF THE AMOUNT DETERMINED IN PARAGRAPH ONE OF THIS
SUBDIVISION WHICH IS ATTRIBUTABLE TO THE INCOME OF  THE  S  CORPORATION.

A. 8997--A                          8

SUCH  ATTRIBUTION  SHALL  BE  MADE  IN  ACCORDANCE WITH THE RATIO OF THE
SHAREHOLDER'S INCOME FROM THE S CORPORATION ALLOCATED WITHIN THE  STATE,
ENTERING  INTO  NEW YORK ADJUSTED GROSS INCOME, TO THE SHAREHOLDER'S NEW
YORK  ADJUSTED GROSS INCOME, OR IN ACCORDANCE WITH SUCH OTHER METHODS AS
THE COMMISSIONER MAY  PRESCRIBE  AS  PROVIDING  AN  APPORTIONMENT  WHICH
REASONABLY REFLECTS THE PORTION OF THE SHAREHOLDER'S TAX ATTRIBUTABLE TO
THE  INCOME  OF  THE  ELIGIBLE HIGH-TECH ENTERPRISE. IN NO EVENT MAY THE
RATIO SO DETERMINED EXCEED 1.0.
  (3) COMBINED RETURNS OR REPORTS. (A) WHERE THE TAXPAYER IS AN ELIGIBLE
HIGH-TECH ENTERPRISE AND IS REQUIRED OR PERMITTED TO MAKE  A  RETURN  OR
REPORT  ON  A  COMBINED  BASIS UNDER ARTICLE NINE-A OF THIS CHAPTER, THE
TAXPAYER'S TAX FACTOR SHALL BE THE AMOUNT DETERMINED IN PARAGRAPH ONE OF
THIS SUBDIVISION WHICH IS ATTRIBUTABLE TO THE  INCOME  OF  THE  ELIGIBLE
HIGH-TECH  ENTERPRISE. SUCH ATTRIBUTION SHALL BE MADE IN ACCORDANCE WITH
THE RATIO OF THE ELIGIBLE HIGH-TECH ENTERPRISE'S INCOME ALLOCATED WITHIN
THE STATE TO THE COMBINED GROUP'S INCOME, OR  IN  ACCORDANCE  WITH  SUCH
OTHER  METHODS  AS THE COMMISSIONER MAY PRESCRIBE AS PROVIDING AN APPOR-
TIONMENT WHICH REASONABLY REFLECTS THE PORTION OF THE  COMBINED  GROUP'S
TAX  ATTRIBUTABLE TO THE INCOME OF THE ELIGIBLE HIGH-TECH ENTERPRISE. IN
NO EVENT MAY THE RATIO SO DETERMINED EXCEED 1.0.
  (B) THE TERM "INCOME  OF  THE  ELIGIBLE  HIGH-TECH  ENTERPRISE"  MEANS
ENTIRE NET INCOME, MINIMUM TAXABLE INCOME, ALTERNATIVE ENTIRE NET INCOME
OR ENTIRE NET INCOME PLUS COMPENSATION CALCULATED AS IF THE TAXPAYER WAS
FILING  SEPARATELY  AND  THE TERM "COMBINED GROUP'S INCOME" MEANS ENTIRE
NET INCOME, MINIMUM TAXABLE INCOME, ALTERNATIVE  ENTIRE  NET  INCOME  OR
ENTIRE  NET  INCOME PLUS COMPENSATION AS SHOWN ON THE COMBINED RETURN OR
REPORT, ALLOCATED WITHIN THE STATE.
  (4) DENIAL OF ALLOWANCE.  IF THE AMOUNT DETERMINED IN PARAGRAPH ONE OF
THIS SUBDIVISION IS LESS THAN ZERO, A TAXPAYER SHALL NOT  BE  ALLOWED  A
CREDIT UNDER THIS SECTION.
  (G) DEFINITIONS AND CROSS-REFERENCES. FOR DEFINITIONS OF TERMS USED IN
THIS  SECTION  SEE  SECTION  TWO OF THIS ARTICLE. FOR APPLICATION OF THE
CREDIT PROVIDED FOR IN THIS SECTION, SEE  THE  FOLLOWING  PROVISIONS  OF
THIS CHAPTER:
  (1) ARTICLE 9-A: SECTION 210: SUBDIVISION 28-A.
  (2) ARTICLE 22: SECTION 606: SUBSECTIONS (I) AND (CC-1).
  S  35. INNOVATION TECHNOLOGY INVESTMENT TAX CREDIT.  (A) (1) AN ELIGI-
BLE HIGH-TECH ENTERPRISE SUBJECT TO TAX UNDER ARTICLE NINE-A OF THE THIS
CHAPTER SHALL BE  ALLOWED  A  CREDIT,  TO  BE  COMPUTED  AS  HEREINAFTER
PROVIDED,  AGAINST THE TAX IMPOSED UNDER SUCH ARTICLE NINE-A. THE AMOUNT
OF SUCH CREDIT SHALL BE TEN PERCENT OF  THE  COST  OR  OTHER  BASIS  FOR
FEDERAL  INCOME  TAX  PURPOSES  OF  TANGIBLE PERSONAL PROPERTY AND OTHER
TANGIBLE PROPERTY, INCLUDING  BUILDINGS  AND  STRUCTURAL  COMPONENTS  OF
BUILDINGS, DESCRIBED IN SUBDIVISION (B) OF THIS SECTION, WHICH IS PLACED
IN SERVICE BY AN ELIGIBLE HIGH-TECH ENTERPRISE, BUT ONLY IF THE ACQUISI-
TION, CONSTRUCTION, RECONSTRUCTION OR ERECTION OF SUCH PROPERTY OR CAPI-
TAL  EQUIPMENT  OCCURRED  OR WAS COMMENCED ON OR AFTER THE TEST DATE, AS
DEFINED IN SECTION THREE HUNDRED FIFTY-ONE OF THE  ECONOMIC  DEVELOPMENT
LAW.   PROVIDED,   HOWEVER,   THAT   IN  THE  CASE  OF  AN  ACQUISITION,
CONSTRUCTION, RECONSTRUCTION OR ERECTION WHICH WAS COMMENCED DURING SUCH
PERIOD AND CONTINUED OR COMPLETED SUBSEQUENTLY, THE CREDIT SHALL BE  TEN
PERCENT OF THE PORTION OF THE COST OR OTHER BASIS FOR FEDERAL INCOME TAX
PURPOSES ATTRIBUTABLE TO SUCH PERIOD, WHICH PORTION SHALL BE ASCERTAINED
BY  MULTIPLYING  SUCH COST OR BASIS BY A FRACTION THE NUMERATOR OF WHICH
SHALL BE THE EXPENDITURES PAID OR INCURRED DURING SUCH PERIOD  FOR  SUCH
PURPOSES AND THE DENOMINATOR OF WHICH SHALL BE THE TOTAL OF ALL EXPENDI-

A. 8997--A                          9

TURES  PAID  OR  INCURRED  FOR  SUCH  ACQUISITION,  CONSTRUCTION, RECON-
STRUCTION OR ERECTION.
  (2)  AN  ELIGIBLE  HIGH-TECH  ENTERPRISE  SUBJECT TO TAX UNDER ARTICLE
TWENTY-TWO OF THIS CHAPTER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED  AS
HEREINAFTER  PROVIDED,  AGAINST THE TAX IMPOSED UNDER SUCH ARTICLE TWEN-
TY-TWO.  THE AMOUNT OF SUCH CREDIT SHALL BE EIGHT PERCENT OF THE COST OR
OTHER BASIS FOR FEDERAL INCOME TAX PURPOSES OF TANGIBLE PERSONAL PROPER-
TY AND OTHER  TANGIBLE  PROPERTY,  INCLUDING  BUILDINGS  AND  STRUCTURAL
COMPONENTS  OF BUILDINGS AND CAPITAL EQUIPMENT, DESCRIBED IN SUBDIVISION
(B) OF THIS SECTION, WHICH IS PLACED IN SERVICE BY AN ELIGIBLE HIGH-TECH
ENTERPRISE, BUT ONLY IF THE ACQUISITION, CONSTRUCTION, RECONSTRUCTION OR
ERECTION OF SUCH PROPERTY OR EQUIPMENT OCCURRED OR WAS COMMENCED  ON  OR
AFTER  THE  TEST  DATE, AS DEFINED IN SECTION THREE HUNDRED FIFTY-ONE OF
THE ECONOMIC DEVELOPMENT LAW.  PROVIDED, HOWEVER, THAT IN THE CASE OF AN
ACQUISITION,  CONSTRUCTION,  RECONSTRUCTION  OR   ERECTION   WHICH   WAS
COMMENCED  DURING  SUCH  PERIOD AND CONTINUED OR COMPLETED SUBSEQUENTLY,
THE CREDIT SHALL BE EIGHT PERCENT OF THE PORTION OF THE  COST  OR  OTHER
BASIS FOR FEDERAL INCOME TAX PURPOSES ATTRIBUTABLE TO SUCH PERIOD, WHICH
PORTION  SHALL  BE  ASCERTAINED  BY  MULTIPLYING SUCH COST OR BASIS BY A
FRACTION THE NUMERATOR OF  WHICH  SHALL  BE  THE  EXPENDITURES  PAID  OR
INCURRED  DURING  SUCH  PERIOD  FOR SUCH PURPOSES AND THE DENOMINATOR OF
WHICH SHALL BE THE TOTAL OF ALL EXPENDITURES PAID OR INCURRED  FOR  SUCH
ACQUISITION, CONSTRUCTION, RECONSTRUCTION OR ERECTION.
  (B)  A  CREDIT  SHALL  BE  ALLOWED  UNDER THIS SECTION WITH RESPECT TO
TANGIBLE PERSONAL PROPERTY AND OTHER TANGIBLE PROPERTY, INCLUDING BUILD-
INGS AND STRUCTURAL COMPONENTS OF BUILDINGS AND CAPITAL EQUIPMENT WHICH:
(1) ARE DEPRECIABLE PURSUANT TO SECTION ONE HUNDRED SIXTY-SEVEN  OF  THE
INTERNAL REVENUE CODE, (2) HAVE A USEFUL LIFE OF FOUR YEARS OR MORE, (3)
ARE  ACQUIRED BY PURCHASE AS DEFINED IN SECTION ONE HUNDRED SEVENTY-NINE
(D) OF THE INTERNAL REVENUE CODE, (4) HAVE A SITUS IN A LOCATION OF  THE
ELIGIBLE HIGH-TECH ENTERPRISE'S OPERATIONS IDENTIFIED TO THE COMMISSION-
ER OF ECONOMIC DEVELOPMENT IN ITS APPLICATION TO BE TREATED AS AN ELIGI-
BLE  HIGH-TECH  ENTERPRISE,  AND  (5)  ARE  (A)  PRINCIPALLY USED BY THE
TAXPAYER IN THE PRODUCTION OF GOODS BY MANUFACTURING, PROCESSING, ASSEM-
BLING, (B)  INDUSTRIAL  WASTE  TREATMENT  FACILITIES  OR  AIR  POLLUTION
CONTROL  FACILITIES  USED  IN  THE  TAXPAYER'S TRADE OR BUSINESS, OR (C)
RESEARCH AND DEVELOPMENT PROPERTY. FOR PURPOSES OF THIS SUBDIVISION, THE
TERM "GOODS" SHALL NOT INCLUDE ELECTRICITY.  FOR PURPOSES OF THIS  PARA-
GRAPH,  MANUFACTURING  SHALL  MEAN  THE PROCESS OF WORKING RAW MATERIALS
INTO WARES SUITABLE FOR USE OR WHICH GIVES NEW SHAPES,  NEW  QUALITY  OR
NEW COMBINATION TO MATTER WHICH ALREADY HAS GONE THROUGH SOME ARTIFICIAL
PROCESS  BY  THE  USE  OF MACHINERY, TOOLS, APPLIANCES AND OTHER SIMILAR
EQUIPMENT. PROPERTY USED  IN  THE  PRODUCTION  OF  GOODS  SHALL  INCLUDE
MACHINERY,  EQUIPMENT  OR  OTHER  TANGIBLE PROPERTY WHICH IS PRINCIPALLY
USED IN THE REPAIR AND SERVICE OF OTHER MACHINERY,  EQUIPMENT  OR  OTHER
TANGIBLE  PROPERTY USED PRINCIPALLY IN THE PRODUCTION OF GOODS AND SHALL
INCLUDE ALL FACILITIES USED IN THE PRODUCTION OPERATION, INCLUDING STOR-
AGE OF MATERIAL TO BE USED IN PRODUCTION AND OF THE  PRODUCTS  THAT  ARE
PRODUCED. FOR PURPOSES OF THIS PARAGRAPH, THE TERMS "RESEARCH AND DEVEL-
OPMENT  PROPERTY",  "INDUSTRIAL  WASTE  TREATMENT  FACILITIES", AND "AIR
POLLUTION CONTROL FACILITIES" SHALL HAVE THE MEANINGS  ASCRIBED  THERETO
BY  PARAGRAPH  (B)  OF  SUBDIVISION TWELVE OF SECTION TWO HUNDRED TEN OF
THIS CHAPTER AND THE PROVISIONS OF PARAGRAPH  (C)  OF  SUCH  SUBDIVISION
TWELVE SHALL APPLY.
  (C)  A  TAXPAYER  SHALL NOT BE ALLOWED A CREDIT UNDER THIS SUBDIVISION
WITH RESPECT TO ANY TANGIBLE PERSONAL PROPERTY AND OTHER TANGIBLE  PROP-

A. 8997--A                         10

ERTY,  INCLUDING  BUILDINGS  AND  STRUCTURAL COMPONENTS OF BUILDINGS AND
CAPITAL EQUIPMENT, WHICH IT LEASES TO ANY OTHER PERSON OR CORPORATION.
  (D) A TAXPAYER MAY CLAIM THE CREDIT ALLOWED UNDER THIS SECTION FOR TEN
YEARS,  COMMENCING WITH THE PERIOD THE TAXPAYER PLACES THE PROPERTY THAT
COMPRISES THE PROJECT IN SERVICE. IF THE AMOUNT OF CREDIT ALLOWED  UNDER
THIS  SECTION  FOR  ANY TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S TAX FOR
SUCH YEAR, THE EXCESS MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS
AND MAY BE DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR  YEARS.  IN
LIEU  OF  CARRYING  OVER ANY SUCH EXCESS, A TAXPAYER MAY, AT HIS OPTION,
RECEIVE FIFTY PERCENT OF SUCH EXCESS AS A REFUND. ANY REFUND PAID PURSU-
ANT TO THIS PARAGRAPH SHALL BE DEEMED TO BE A REFUND OF  AN  OVERPAYMENT
OF  TAX  AS  PROVIDED IN SECTION SIX HUNDRED EIGHTY-SIX OF THIS CHAPTER,
PROVIDED, HOWEVER, THAT NO INTEREST SHALL BE PAID THEREON.
  (E) AT THE OPTION OF THE TAXPAYER,  AIR  OR  WATER  POLLUTION  CONTROL
FACILITIES WHICH QUALIFY FOR ELECTIVE MODIFICATIONS UNDER SUBSECTION (H)
OF  SECTION SIX HUNDRED TWELVE OF THIS CHAPTER, OR RESEARCH AND DEVELOP-
MENT FACILITIES WHICH QUALIFY FOR ELECTIVE MODIFICATION UNDER PARAGRAPHS
THREE AND FOUR OF SUBSECTION (G) OF SECTION SIX HUNDRED TWELVE  OF  THIS
CHAPTER,  OR  PROPERTY  WHICH  QUALIFIES  FOR  THE CREDIT PROVIDED UNDER
SUBDIVISION (A) OF THIS SECTION MAY BE TREATED AS  PROPERTY  PRINCIPALLY
USED  BY THE TAXPAYER IN THE PRODUCTION OF GOODS BY MANUFACTURING, PROC-
ESSING, OR ASSEMBLING, PROVIDED THE PROPERTY OTHERWISE  QUALIFIES  UNDER
PARAGRAPH  TWO  OF  SUBDIVISION  (A)  OF  THIS SECTION, IN WHICH EVENT A
DEDUCTION SHALL NOT BE ALLOWED UNDER SUCH SUBSECTION (H) OR  SUCH  PARA-
GRAPHS  THREE  AND  FOUR  OF  SUBSECTION  (G)  AND A CREDIT SHALL NOT BE
ALLOWED UNDER SUCH SUBSECTION (G) OR (H).
  (F) (1) WITH RESPECT TO PROPERTY  WHICH  IS  DEPRECIABLE  PURSUANT  TO
SECTION  ONE HUNDRED SIXTY-SEVEN OF THE INTERNAL REVENUE CODE BUT IS NOT
SUBJECT TO THE PROVISIONS OF SECTION ONE  HUNDRED  SIXTY-EIGHT  OF  SUCH
CODE  AND WHICH IS DISPOSED OF OR CEASES TO BE IN QUALIFIED USE PRIOR TO
THE END OF THE TAXABLE YEAR IN WHICH THE CREDIT  IS  TO  BE  TAKEN,  THE
AMOUNT OF THE CREDIT SHALL BE THAT PORTION OF THE CREDIT PROVIDED FOR IN
THIS  SECTION  WHICH  REPRESENTS THE RATIO WHICH THE MONTHS OF QUALIFIED
USE BEAR TO THE MONTHS OF USEFUL LIFE. IF THE PROPERTY ON  WHICH  CREDIT
HAS  BEEN TAKEN IS DISPOSED OF OR CEASES TO BE IN QUALIFIED USE PRIOR TO
THE END OF ITS USEFUL LIFE, THE DIFFERENCE BETWEEN THE CREDIT TAKEN  AND
THE  CREDIT  ALLOWED  FOR  ACTUAL  USE MUST BE ADDED BACK IN THE YEAR OF
DISPOSITION. PROVIDED, HOWEVER, IF SUCH PROPERTY IS DISPOSED OF OR CEAS-
ES TO BE IN QUALIFIED USE AFTER IT HAS BEEN IN QUALIFIED  USE  FOR  MORE
THAN TWELVE CONSECUTIVE YEARS, IT SHALL NOT BE NECESSARY TO ADD BACK THE
CREDIT AS PROVIDED IN THIS SUBDIVISION. THE AMOUNT OF CREDIT ALLOWED FOR
ACTUAL USE SHALL BE DETERMINED BY MULTIPLYING THE ORIGINAL CREDIT BY THE
RATIO  WHICH  THE  MONTHS  OF QUALIFIED USE BEAR TO THE MONTHS OF USEFUL
LIFE. FOR PURPOSES OF THIS SUBDIVISION, USEFUL LIFE OF PROPERTY SHALL BE
THE SAME AS THE TAXPAYER USES FOR DEPRECIATION PURPOSES  WHEN  COMPUTING
HIS FEDERAL INCOME TAX LIABILITY.
  (2) EXCEPT WITH RESPECT TO THAT PROPERTY TO WHICH SUBPARAGRAPH FOUR OF
THIS  PARAGRAPH  APPLIES,  WITH  RESPECT  TO  PROPERTY  SUBJECT  TO  THE
PROVISIONS OF SECTION ONE HUNDRED SIXTY-EIGHT OF  THE  INTERNAL  REVENUE
CODE OTHER THAN THREE-YEAR PROPERTY AS DEFINED IN SUBSECTION (E) OF SUCH
SECTION  ONE  HUNDRED  SIXTY-EIGHT OF THE INTERNAL REVENUE CODE WHICH IS
DISPOSED OF OR CEASES TO BE IN QUALIFIED USE PRIOR TO  THE  END  OF  THE
TAXABLE YEAR IN WHICH THE CREDIT IS TO BE TAKEN, THE AMOUNT OF THE CRED-
IT  SHALL BE THAT PORTION OF THE CREDIT PROVIDED FOR IN THIS SUBDIVISION
WHICH REPRESENTS THE RATIO WHICH THE MONTHS OF  QUALIFIED  USE  BEAR  TO
SIXTY.  IF  PROPERTY  ON  WHICH  CREDIT HAS BEEN TAKEN IS DISPOSED OF OR

A. 8997--A                         11

CEASES TO BE IN QUALIFIED USE PRIOR TO THE  END  OF  SIXTY  MONTHS,  THE
DIFFERENCE  BETWEEN  THE  CREDIT TAKEN AND THE CREDIT ALLOWED FOR ACTUAL
USE MUST BE ADDED BACK IN THE YEAR OF DISPOSITION.  THE AMOUNT OF CREDIT
ALLOWED  FOR  ACTUAL USE SHALL BE DETERMINED BY MULTIPLYING THE ORIGINAL
CREDIT BY THE RATIO WHICH THE MONTHS OF QUALIFIED USE BEAR TO SIXTY.
  (3) WITH  RESPECT  TO  ANY  PROPERTY  TO  WHICH  SECTION  ONE  HUNDRED
SIXTY-EIGHT OF THE INTERNAL REVENUE CODE APPLIES, WHICH IS A BUILDING OR
A  STRUCTURAL COMPONENT OF A BUILDING AND WHICH IS DISPOSED OF OR CEASES
TO BE IN QUALIFIED USE PRIOR TO THE END OF THE TAXABLE YEAR IN WHICH THE
CREDIT IS TO BE TAKEN, THE AMOUNT OF THE CREDIT SHALL BE THAT PORTION OF
THE CREDIT PROVIDED FOR IN THIS SUBDIVISION WHICH REPRESENTS  THE  RATIO
WHICH  THE  MONTHS  OF  QUALIFIED USE BEAR TO THE TOTAL NUMBER OF MONTHS
OVER WHICH THE TAXPAYER CHOOSES TO DEDUCT THE PROPERTY UNDER THE  INTER-
NAL REVENUE CODE. IF PROPERTY ON WHICH CREDIT HAS BEEN TAKEN IS DISPOSED
OF  OR CEASES TO BE IN QUALIFIED USE PRIOR TO THE END OF THE PERIOD OVER
WHICH THE TAXPAYER CHOOSES TO DEDUCT THE  PROPERTY  UNDER  THE  INTERNAL
REVENUE  CODE,  THE  DIFFERENCE  BETWEEN THE CREDIT TAKEN AND THE CREDIT
ALLOWED FOR ACTUAL USE MUST BE ADDED BACK IN THE  YEAR  OF  DISPOSITION.
PROVIDED,  HOWEVER,  IF  SUCH PROPERTY IS DISPOSED OF OR CEASES TO BE IN
QUALIFIED USE AFTER IT HAS BEEN IN QUALIFIED USE FOR  MORE  THAN  TWELVE
CONSECUTIVE  YEARS,  IT SHALL NOT BE NECESSARY TO ADD BACK THE CREDIT AS
PROVIDED IN THIS SUBPARAGRAPH. THE AMOUNT OF CREDIT ALLOWED  FOR  ACTUAL
USE  SHALL BE DETERMINED BY MULTIPLYING THE ORIGINAL CREDIT BY THE RATIO
WHICH THE MONTHS OF QUALIFIED USE BEAR TO THE  TOTAL  NUMBER  OF  MONTHS
OVER  WHICH THE TAXPAYER CHOOSES TO DEDUCT THE PROPERTY UNDER THE INTER-
NAL REVENUE CODE.
  (4) FOR PURPOSES OF THIS PARAGRAPH, WHERE A  CREDIT  IS  ALLOWED  WITH
RESPECT  TO  AN AIR POLLUTION CONTROL FACILITY ON THE BASIS OF A CERTIF-
ICATE OF COMPLIANCE ISSUED PURSUANT TO  THE  ENVIRONMENTAL  CONSERVATION
LAW  AND  THE  CERTIFICATE  IS  REVOKED PURSUANT TO SUBDIVISION THREE OF
SECTION 19-0309 OF THE ENVIRONMENTAL CONSERVATION LAW,  SUCH  REVOCATION
SHALL  CONSTITUTE  A DISPOSAL OR CESSATION OF QUALIFIED USE, EXCEPT WITH
RESPECT  TO  PROPERTY  CONTAINED  IN  OR  COMPRISING  SUCH  FACILITY  AS
DESCRIBED  IN CLAUSE (A) OR (C) OF SUBPARAGRAPH (II) OF PARAGRAPH (B) OF
SUBDIVISION TWELVE OF SECTION TWO HUNDRED TEN  OF  THIS  CHAPTER,  OTHER
THAN AS PART OF OR COMPRISING AN AIR POLLUTION CONTROL FACILITY.
  S  36.  INNOVATION TECHNOLOGY EMPLOYMENT INCENTIVE CREDIT. (A) WHERE A
TAXPAYER IS ALLOWED A CREDIT UNDER SECTION THIRTY-FIVE OF THIS  ARTICLE,
THE  TAXPAYER SHALL BE ALLOWED A CREDIT FOR EACH OF THE THREE YEARS NEXT
SUCCEEDING THE TAXABLE YEAR FOR WHICH  THE  CREDIT  UNDER  SUCH  SECTION
THIRTY-FIVE  IS  ALLOWED,  WITH RESPECT TO SUCH PROPERTY, WHETHER OR NOT
DEDUCTIBLE IN SUCH TAXABLE YEAR OR IN SUBSEQUENT TAXABLE YEARS OF THIRTY
PERCENT  OF  THE  CREDIT  ALLOWABLE  UNDER  SUCH  SECTION   THIRTY-FIVE;
PROVIDED,  HOWEVER, THAT THE CREDIT ALLOWABLE UNDER THIS SECTION FOR ANY
TAXABLE YEAR SHALL ONLY BE ALLOWED IF THE AVERAGE  NUMBER  OF  EMPLOYEES
EMPLOYED  BY  THE  TAXPAYER AT LOCATIONS OF ITS OPERATIONS IDENTIFIED TO
THE COMMISSIONER OF ECONOMIC DEVELOPMENT IN ITS APPLICATION TO BE TREAT-
ED AS AN ELIGIBLE  HIGH-TECH  ENTERPRISE,  IN  WHICH  SUCH  PROPERTY  IS
LOCATED  DURING SUCH TAXABLE YEAR IS AT LEAST ONE HUNDRED ONE PERCENT OF
THE AVERAGE NUMBER  OF  EMPLOYEES  EMPLOYED  BY  THE  TAXPAYER  IN  SUCH
LOCATION  DURING THE TAXABLE YEAR IMMEDIATELY PRECEDING THE TAXABLE YEAR
FOR WHICH THE CREDIT UNDER SUCH SECTION THIRTY-FIVE IS ALLOWED.
  (B) THE AVERAGE NUMBER OF EMPLOYEES EMPLOYED  IN  A  LOCATION  OF  ITS
OPERATIONS IDENTIFIED TO THE COMMISSIONER OF ECONOMIC DEVELOPMENT IN ITS
APPLICATION TO BE TREATED AS AN ELIGIBLE HIGH-TECH ENTERPRISE IN A TAXA-
BLE  YEAR SHALL BE COMPUTED BY ASCERTAINING THE NUMBER OF SUCH EMPLOYEES

A. 8997--A                         12

WITHIN SUCH LOCATION EMPLOYED BY THE TAXPAYER ON THE THIRTY-FIRST DAY OF
MARCH, THE THIRTIETH DAY OF JUNE, THE THIRTIETH DAY OF SEPTEMBER AND THE
THIRTY-FIRST DAY OF DECEMBER IN THE TAXABLE YEAR, BY ADDING TOGETHER THE
NUMBER  OF  EMPLOYEES ASCERTAINED IN EACH OF SUCH DATES AND DIVIDING THE
SUM SO OBTAINED BY THE NUMBER OF  SUCH  ABOVEMENTIONED  DATES  OCCURRING
WITHIN THE TAXABLE YEAR.
  (C) IF THE AMOUNT OF CREDIT ALLOWED UNDER THIS SECTION FOR ANY TAXABLE
YEAR  SHALL  EXCEED  THE TAXPAYER'S TAX FOR SUCH YEAR, THE EXCESS MAY BE
CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND MAY BE DEDUCTED FROM THE
TAXPAYER'S TAX FOR SUCH YEAR OR YEARS. IN LIEU OF CARRYING OVER ANY SUCH
EXCESS, A TAXPAYER MAY, AT HIS OPTION, RECEIVE  FIFTY  PERCENT  OF  SUCH
EXCESS  AS A REFUND. ANY REFUND PAID PURSUANT TO THIS PARAGRAPH SHALL BE
DEEMED TO BE A REFUND OF AN OVERPAYMENT OF TAX AS  PROVIDED  IN  SECTION
SIX  HUNDRED  EIGHTY-SIX  OF  THIS  ARTICLE,  PROVIDED, HOWEVER, THAT NO
INTEREST SHALL BE PAID THEREON.
  S 5. Section 210 of the tax law is amended by adding a new subdivision
19-a to read as follows:
  19-A. INNOVATION TECHNOLOGY WAGE TAX CREDIT. (A) A TAXPAYER  SHALL  BE
ALLOWED  A  CREDIT,  TO BE COMPUTED AS HEREINAFTER PROVIDED, AGAINST THE
TAX IMPOSED BY THIS ARTICLE, WHERE THE TAXPAYER HAS BEEN APPROVED AS  AN
ELIGIBLE  HIGH-TECH  ENTERPRISE UNDER SECTION THREE HUNDRED FIFTY OF THE
ECONOMIC DEVELOPMENT  LAW.  THE  AMOUNT  OF  SUCH  CREDIT  SHALL  BE  AS
PRESCRIBED  IN  PARAGRAPH  (D) OF THIS SUBDIVISION. SUCH CREDIT SHALL BE
AVAILABLE FOR FIVE SUCCESSIVE YEARS COMMENCING WITH THE  YEAR  IN  WHICH
THE  TAXPAYER  HAS NET NEW EMPLOYEES AS DEFINED IN SECTION THREE HUNDRED
FIFTY-ONE OF THE ECONOMIC DEVELOPMENT LAW FOR MORE THAN HALF THE TAXPAY-
ER'S FISCAL YEAR.
  (B) FOR THE PURPOSES OF THIS SUBDIVISION, THE  FOLLOWING  TERMS  SHALL
HAVE THE FOLLOWING MEANINGS:
  (1)  "ELIGIBLE  WAGES" MEANS WAGES PAID BY THE TAXPAYER FOR EMPLOYMENT
DURING THE TAXABLE YEAR, AT LOCATIONS OF AN  ELIGIBLE  HIGH-TECH  ENTER-
PRISE'S  OPERATIONS  IDENTIFIED TO THE COMMISSIONER OF ECONOMIC DEVELOP-
MENT IN ITS APPLICATION TO BE TREATED AS AN  ELIGIBLE  HIGH-TECH  ENTER-
PRISE.
  (2)  "TARGETED EMPLOYEE" MEANS A NEW YORK RESIDENT WHO RECEIVES ELIGI-
BLE WAGES AND WHO IS (I) AN ELIGIBLE INDIVIDUAL UNDER THE PROVISIONS  OF
THE  TARGETED JOBS TAX CREDIT (SECTION FIFTY-ONE OF THE INTERNAL REVENUE
CODE), (II) ELIGIBLE FOR BENEFITS UNDER THE PROVISIONS OF THE  WORKFORCE
INVESTMENT  ACT  AS  A  DISLOCATED WORKER OR LOW-INCOME INDIVIDUAL (P.L.
105-220, AS AMENDED), (III) A RECIPIENT OF PUBLIC  ASSISTANCE  BENEFITS,
(IV)  AN  INDIVIDUAL WHOSE INCOME IS BELOW THE MOST RECENTLY ESTABLISHED
POVERTY RATE PROMULGATED BY THE UNITED STATES DEPARTMENT OF COMMERCE, OR
A MEMBER OF A FAMILY WHOSE FAMILY INCOME  IS  BELOW  THE  MOST  RECENTLY
ESTABLISHED  POVERTY  RATE PROMULGATED BY THE APPROPRIATE FEDERAL AGENCY
OR (V) AN HONORABLY DISCHARGED MEMBER OF ANY BRANCH OF THE ARMED  FORCES
OF THE UNITED STATES. AN INDIVIDUAL WHO SATISFIES THE CRITERIA SET FORTH
IN  CLAUSE  (I),  (II),  (IV) OR (V) OF THIS SUBPARAGRAPH AT THE TIME OF
INITIAL EMPLOYMENT IN THE JOB  WITH  RESPECT  TO  WHICH  THE  CREDIT  IS
CLAIMED,  OR  WHO  SATISFIES  THE CRITERION SET FORTH IN CLAUSE (III) OF
THIS SUBPARAGRAPH AT SUCH TIME OR AT ANY TIME WITHIN  THE  PREVIOUS  TWO
YEARS, SHALL BE A TARGETED EMPLOYEE SO LONG AS SUCH INDIVIDUAL CONTINUES
TO RECEIVE ELIGIBLE WAGES.
  (3)  "AVERAGE  NUMBER  OF  INDIVIDUALS  EMPLOYED  FULL-TIME"  SHALL BE
COMPUTED BY ASCERTAINING THE NUMBER OF SUCH INDIVIDUALS EMPLOYED BY  THE
TAXPAYER  ON  THE  THIRTY-FIRST DAY OF MARCH, THE THIRTIETH DAY OF JUNE,
THE THIRTIETH DAY OF SEPTEMBER AND  THE  THIRTY-FIRST  DAY  OF  DECEMBER

A. 8997--A                         13

DURING  EACH TAXABLE YEAR OR OTHER APPLICABLE PERIOD, BY ADDING TOGETHER
THE NUMBER OF SUCH INDIVIDUALS ASCERTAINED ON EACH  OF  SUCH  DATES  AND
DIVIDING THE SUM SO OBTAINED BY THE NUMBER OF SUCH DATES OCCURRING WITH-
IN SUCH TAXABLE YEAR OR OTHER APPLICABLE PERIOD.
  (C)  THE  AMOUNT OF THE CREDIT SHALL EQUAL THE SUM OF: (1) THE PRODUCT
OF THREE THOUSAND DOLLARS AND THE AVERAGE NUMBER OF INDIVIDUALS EMPLOYED
FULL-TIME BY THE  TAXPAYER,  COMPUTED  PURSUANT  TO  THE  PROVISIONS  OF
SUBPARAGRAPH  THREE  OF  PARAGRAPH  (B)  OF  THIS  SUBDIVISION,  WHO (I)
RECEIVED ELIGIBLE WAGES FOR MORE THAN HALF OF  THE  TAXABLE  YEAR,  (II)
RECEIVED  WITH  RESPECT TO MORE THAN HALF OF THE PERIOD OF EMPLOYMENT BY
THE TAXPAYER DURING THE TAXABLE YEAR, AN HOURLY WAGE WHICH WAS AT  LEAST
ONE HUNDRED THIRTY-FIVE PERCENT OF THE MINIMUM WAGE SPECIFIED IN SECTION
SIX  HUNDRED  FIFTY-TWO  OF THE LABOR LAW, (III) ARE TARGETED EMPLOYEES,
AND (IV) ARE HIRED AFTER THE TEST DATE; AND (2) THE PRODUCT  OF  FIFTEEN
HUNDRED  DOLLARS  AND THE AVERAGE NUMBER OF INDIVIDUALS (EXCLUDING INDI-
VIDUALS DESCRIBED IN SUBPARAGRAPH ONE OF THIS PARAGRAPH) EMPLOYED  FULL-
TIME BY THE TAXPAYER AND HIRED AFTER THE TEST DATE, COMPUTED PURSUANT TO
THE  PROVISIONS  OF SUBPARAGRAPH THREE OF PARAGRAPH (B) OF THIS SUBDIVI-
SION, WHO RECEIVED ELIGIBLE WAGES FOR MORE  THAN  HALF  OF  THE  TAXABLE
YEAR.   PROVIDED, FURTHER, HOWEVER, THAT THE CREDIT PROVIDED FOR IN THIS
SUBDIVISION WITH RESPECT TO THE TAXABLE YEAR,  AND  CARRYOVERS  OF  SUCH
CREDIT  TO  THE  TAXABLE  YEAR, DEDUCTED FROM THE TAX OTHERWISE DUE, MAY
NOT, IN THE AGGREGATE, EXCEED FIFTY PERCENT OF  THE  TAX  IMPOSED  UNDER
SECTION  SIX  HUNDRED ONE OF THIS CHAPTER COMPUTED WITHOUT REGARD TO ANY
CREDIT PROVIDED FOR UNDER THIS ARTICLE.
  (D) FOR PURPOSES OF CALCULATING THE AMOUNT OF THE CREDIT,  INDIVIDUALS
EMPLOYED  WITHIN THE STATE WITHIN THE IMMEDIATELY PRECEDING SIXTY MONTHS
BY A RELATED PERSON, AS SUCH TERM IS  DEFINED  IN  SUBPARAGRAPH  (C)  OF
PARAGRAPH  THREE OF SUBSECTION (B) OF SECTION FOUR HUNDRED SIXTY-FIVE OF
THE INTERNAL REVENUE CODE, SHALL NOT BE INCLUDED IN THE  AVERAGE  NUMBER
OF  INDIVIDUALS  DESCRIBED  IN  SUBPARAGRAPH  ONE OR SUBPARAGRAPH TWO OF
PARAGRAPH (C) OF THIS SUBDIVISION, UNLESS SUCH RELATED PERSON WAS  NEVER
ALLOWED  A CREDIT UNDER THIS SUBDIVISION WITH RESPECT TO SUCH EMPLOYEES.
FOR PURPOSES OF THIS SUBPARAGRAPH, A "RELATED PERSON" SHALL  INCLUDE  AN
ENTITY  WHICH WOULD HAVE QUALIFIED AS A "RELATED PERSON" TO THE TAXPAYER
IF IT HAD NOT BEEN DISSOLVED, LIQUIDATED, MERGED WITH ANOTHER ENTITY  OR
OTHERWISE CEASED TO EXIST OR OPERATE.
  (E)  THE  DOLLAR  AMOUNTS  SPECIFIED  UNDER SUBPARAGRAPH ONE OR TWO OF
PARAGRAPH (C) OF THIS SUBDIVISION SHALL BE  INCREASED  BY  FIVE  HUNDRED
DOLLARS  FOR  EACH  QUALIFYING  INDIVIDUAL  UNDER  SUCH SUBPARAGRAPH WHO
RECEIVED, DURING THE TAXABLE YEAR, WAGES IN  EXCESS  OF  FORTY  THOUSAND
DOLLARS.
  (F)  IF THE AMOUNT OF THE CREDIT AND CARRYOVERS OF SUCH CREDIT ALLOWED
UNDER THIS SECTION FOR ANY TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S  TAX
FOR  SUCH  YEAR, THE EXCESS, AS WELL AS ANY PART OF THE CREDIT OR CARRY-
OVERS OF SUCH CREDIT, OR BOTH, WHICH MAY NOT BE DEDUCTED  FROM  THE  TAX
OTHERWISE  DUE  BY REASON OF THE FINAL SENTENCE IN PARAGRAPH (D) OF THIS
SUBDIVISION, MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND  MAY
BE  DEDUCTED  FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS. IN LIEU OF
CARRYING OVER ANY SUCH EXCESS, A TAXPAYER MAY, AT  HIS  OPTION,  RECEIVE
FIFTY  PERCENT  OF  SUCH EXCESS AS A REFUND. ANY REFUND PAID PURSUANT TO
THIS PARAGRAPH SHALL BE DEEMED TO BE A REFUND OF AN OVERPAYMENT  OF  TAX
AS PROVIDED IN SECTION SIX HUNDRED EIGHTY-SIX OF THIS CHAPTER, PROVIDED,
HOWEVER, THAT NO INTEREST SHALL BE PAID THEREON.
  S  6. Section 606 of the tax law is amended by adding a new subsection
(k-1) to read as follows:

A. 8997--A                         14

  (K-1) INNOVATION TECHNOLOGY WAGE TAX CREDIT. (1) A TAXPAYER  SHALL  BE
ALLOWED  A  CREDIT,  TO BE COMPUTED AS HEREINAFTER PROVIDED, AGAINST THE
TAX IMPOSED BY THIS ARTICLE, WHERE THE TAXPAYER HAS BEEN APPROVED AS  AN
ELIGIBLE  HIGH-TECH  ENTERPRISE UNDER SECTION THREE HUNDRED FIFTY OF THE
ECONOMIC  DEVELOPMENT  LAW.  THE  AMOUNT  OF  SUCH  CREDIT  SHALL  BE AS
PRESCRIBED IN PARAGRAPH TWO OF THIS SUBSECTION.  SUCH  CREDIT  SHALL  BE
AVAILABLE  FOR  FIVE  SUCCESSIVE YEARS COMMENCING WITH THE YEAR IN WHICH
THE TAXPAYER HAS EMPLOYEES FOR MORE  THAN  HALF  THE  TAXPAYER'S  FISCAL
YEAR.
  (2)  FOR  THE  PURPOSES  OF THIS SUBSECTION, THE FOLLOWING TERMS SHALL
HAVE THE FOLLOWING MEANINGS:
  (A) "ELIGIBLE WAGES" MEANS WAGES PAID BY THE TAXPAYER  FOR  EMPLOYMENT
DURING  THE  TAXABLE  YEAR, AT LOCATIONS OF AN ELIGIBLE HIGH-TECH ENTER-
PRISE'S OPERATIONS IDENTIFIED TO THE COMMISSIONER OF  ECONOMIC  DEVELOP-
MENT  IN  ITS  APPLICATION TO BE TREATED AS AN ELIGIBLE HIGH-TECH ENTER-
PRISE.
  (B) "TARGETED EMPLOYEE" MEANS A NEW YORK RESIDENT WHO RECEIVES  ELIGI-
BLE  WAGES AND WHO IS (I) AN ELIGIBLE INDIVIDUAL UNDER THE PROVISIONS OF
THE TARGETED JOBS TAX CREDIT (SECTION FIFTY-ONE OF THE INTERNAL  REVENUE
CODE),  (II) ELIGIBLE FOR BENEFITS UNDER THE PROVISIONS OF THE WORKFORCE
INVESTMENT ACT AS A DISLOCATED WORKER  OR  LOW-INCOME  INDIVIDUAL  (P.L.
105-220,  AS  AMENDED), (III) A RECIPIENT OF PUBLIC ASSISTANCE BENEFITS,
(IV) AN INDIVIDUAL WHOSE INCOME IS BELOW THE MOST  RECENTLY  ESTABLISHED
POVERTY RATE PROMULGATED BY THE UNITED STATES DEPARTMENT OF COMMERCE, OR
A  MEMBER  OF  A  FAMILY  WHOSE FAMILY INCOME IS BELOW THE MOST RECENTLY
ESTABLISHED POVERTY RATE PROMULGATED BY THE APPROPRIATE  FEDERAL  AGENCY
OR  (V) AN HONORABLY DISCHARGED MEMBER OF ANY BRANCH OF THE ARMED FORCES
OF THE UNITED STATES. AN INDIVIDUAL WHO SATISFIES THE CRITERIA SET FORTH
IN CLAUSE (I), (II), (IV) OR (V) OF THIS SUBPARAGRAPH  AT  THE  TIME  OF
INITIAL  EMPLOYMENT  IN  THE  JOB  WITH  RESPECT  TO WHICH THE CREDIT IS
CLAIMED, OR WHO SATISFIES THE CRITERION SET FORTH  IN  CLAUSE  (III)  OF
THIS  SUBPARAGRAPH  AT  SUCH TIME OR AT ANY TIME WITHIN THE PREVIOUS TWO
YEARS, SHALL BE A TARGETED EMPLOYEE SO LONG AS SUCH INDIVIDUAL CONTINUES
TO RECEIVE ELIGIBLE WAGES.
  (C) "AVERAGE  NUMBER  OF  INDIVIDUALS  EMPLOYED  FULL-TIME"  SHALL  BE
COMPUTED  BY ASCERTAINING THE NUMBER OF SUCH INDIVIDUALS EMPLOYED BY THE
TAXPAYER ON THE THIRTY-FIRST DAY OF MARCH, THE THIRTIETH  DAY  OF  JUNE,
THE  THIRTIETH  DAY  OF  SEPTEMBER  AND THE THIRTY-FIRST DAY OF DECEMBER
DURING EACH TAXABLE YEAR OR OTHER APPLICABLE PERIOD, BY ADDING  TOGETHER
THE  NUMBER  OF  SUCH  INDIVIDUALS ASCERTAINED ON EACH OF SUCH DATES AND
DIVIDING THE SUM SO OBTAINED BY THE NUMBER OF SUCH DATES OCCURRING WITH-
IN SUCH TAXABLE YEAR OR OTHER APPLICABLE PERIOD.
  (3) THE AMOUNT OF THE CREDIT SHALL EQUAL THE SUM OF: (A)  THE  PRODUCT
OF THREE THOUSAND DOLLARS AND THE AVERAGE NUMBER OF INDIVIDUALS EMPLOYED
FULL-TIME  BY  THE  TAXPAYER,  COMPUTED  PURSUANT  TO  THE PROVISIONS OF
SUBPARAGRAPH (C) OF PARAGRAPH TWO OF THIS SUBSECTION, WHO  (I)  RECEIVED
ELIGIBLE  WAGES  FOR  MORE  THAN HALF OF THE TAXABLE YEAR, (II) RECEIVED
WITH RESPECT TO MORE THAN HALF  OF  THE  PERIOD  OF  EMPLOYMENT  BY  THE
TAXPAYER  DURING THE TAXABLE YEAR, AN HOURLY WAGE WHICH WAS AT LEAST ONE
HUNDRED THIRTY-FIVE PERCENT OF THE MINIMUM WAGE SPECIFIED IN SECTION SIX
HUNDRED FIFTY-TWO OF THE LABOR LAW, AND (III)  ARE  TARGETED  EMPLOYEES;
AND (B) THE PRODUCT OF FIFTEEN HUNDRED DOLLARS AND THE AVERAGE NUMBER OF
INDIVIDUALS (EXCLUDING INDIVIDUALS DESCRIBED IN SUBPARAGRAPH (A) OF THIS
PARAGRAPH)  EMPLOYED FULL-TIME BY THE TAXPAYER, COMPUTED PURSUANT TO THE
PROVISIONS OF SUBPARAGRAPH (C) OF PARAGRAPH TWO OF THIS SUBSECTION,  WHO
RECEIVED  ELIGIBLE  WAGES  FOR  MORE  THAN  HALF  OF  THE  TAXABLE YEAR.

A. 8997--A                         15

PROVIDED, FURTHER,  HOWEVER,  THAT  THE  CREDIT  PROVIDED  FOR  IN  THIS
SUBSECTION  WITH  RESPECT  TO  THE  TAXABLE YEAR, AND CARRYOVERS OF SUCH
CREDIT TO THE TAXABLE YEAR, DEDUCTED FROM THE  TAX  OTHERWISE  DUE,  MAY
NOT,  IN  THE  AGGREGATE,  EXCEED FIFTY PERCENT OF THE TAX IMPOSED UNDER
SECTION SIX HUNDRED ONE OF THIS PART  COMPUTED  WITHOUT  REGARD  TO  ANY
CREDIT PROVIDED FOR UNDER THIS ARTICLE.
  (4)  FOR PURPOSES OF CALCULATING THE AMOUNT OF THE CREDIT, INDIVIDUALS
EMPLOYED WITHIN THE STATE WITHIN THE IMMEDIATELY PRECEDING SIXTY  MONTHS
BY  A  RELATED  PERSON,  AS  SUCH TERM IS DEFINED IN SUBPARAGRAPH (C) OF
PARAGRAPH THREE OF SUBSECTION (B) OF SECTION FOUR HUNDRED SIXTY-FIVE  OF
THE  INTERNAL  REVENUE CODE, SHALL NOT BE INCLUDED IN THE AVERAGE NUMBER
OF INDIVIDUALS DESCRIBED IN SUBPARAGRAPH (C) OF PARAGRAPH  TWO  OF  THIS
SUBSECTION,  UNLESS SUCH RELATED PERSON WAS NEVER ALLOWED A CREDIT UNDER
THIS SUBSECTION WITH RESPECT TO SUCH EMPLOYEES.  FOR  PURPOSES  OF  THIS
SUBPARAGRAPH,  A  "RELATED  PERSON"  SHALL INCLUDE AN ENTITY WHICH WOULD
HAVE QUALIFIED AS A "RELATED PERSON" TO THE TAXPAYER IF IT HAD NOT  BEEN
DISSOLVED, LIQUIDATED, MERGED WITH ANOTHER ENTITY OR OTHERWISE CEASED TO
EXIST OR OPERATE.
  (5)  THE  DOLLAR  AMOUNTS  SPECIFIED  UNDER SUBPARAGRAPH (A) OR (B) OF
PARAGRAPH THREE OF THIS SUBSECTION SHALL BE INCREASED  BY  FIVE  HUNDRED
DOLLARS  FOR  EACH  QUALIFYING  INDIVIDUAL  UNDER  SUCH SUBPARAGRAPH WHO
RECEIVED, DURING THE TAXABLE YEAR, WAGES IN  EXCESS  OF  FORTY  THOUSAND
DOLLARS.
  (6)  IF THE AMOUNT OF THE CREDIT AND CARRYOVERS OF SUCH CREDIT ALLOWED
UNDER THIS SECTION FOR ANY TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S  TAX
FOR  SUCH  YEAR, THE EXCESS, AS WELL AS ANY PART OF THE CREDIT OR CARRY-
OVERS OF SUCH CREDIT, OR BOTH, WHICH MAY NOT BE DEDUCTED  FROM  THE  TAX
OTHERWISE DUE BY REASON OF THE FINAL SENTENCE IN PARAGRAPH THREE OF THIS
SUBSECTION,  MAY  BE CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND MAY
BE DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS. IN  LIEU  OF
CARRYING  OVER  ANY  SUCH EXCESS, A TAXPAYER MAY, AT HIS OPTION, RECEIVE
FIFTY PERCENT OF SUCH EXCESS AS A REFUND. ANY REFUND  PAID  PURSUANT  TO
THIS  PARAGRAPH  SHALL BE DEEMED TO BE A REFUND OF AN OVERPAYMENT OF TAX
AS PROVIDED IN SECTION SIX HUNDRED EIGHTY-SIX OF THIS ARTICLE, PROVIDED,
HOWEVER, THAT NO INTEREST SHALL BE PAID THEREON.
  S 7. Section 606  of  the  tax  law  is  amended  by  adding  two  new
subsections (bb-1) and (cc-1) to read as follows:
  (BB-1)  INNOVATION  TECHNOLOGY  CREDIT  FOR  REAL  PROPERTY TAXES. (1)
ALLOWANCE OF CREDIT. A TAXPAYER WHICH IS AN  ELIGIBLE  HIGH-TECH  ENTER-
PRISE AS DEFINED IN SECTION THREE HUNDRED FIFTY OF THE ECONOMIC DEVELOP-
MENT  LAW, OR WHICH IS A SOLE PROPRIETOR OF AN ELIGIBLE HIGH-TECH ENTER-
PRISE OR A MEMBER OF  A  PARTNERSHIP  WHICH  IS  AN  ELIGIBLE  HIGH-TECH
ENTERPRISE,  SHALL BE ALLOWED A CREDIT FOR ELIGIBLE REAL PROPERTY TAXES,
TO BE COMPUTED AS PROVIDED IN  SECTION  THIRTY-THREE  OF  THIS  CHAPTER,
AGAINST THE TAX IMPOSED BY THIS ARTICLE.
  (2)  APPLICATION  OF CREDIT. IF THE AMOUNT OF THE CREDIT ALLOWED UNDER
THIS SUBSECTION FOR ANY TAXABLE YEAR SHALL EXCEED THE TAXPAYER'S TAX FOR
SUCH YEAR, THE EXCESS SHALL BE TREATED AS AN OVERPAYMENT OF  TAX  TO  BE
CREDITED  OR  REFUNDED  IN ACCORDANCE WITH THE PROVISIONS OF SECTION SIX
HUNDRED EIGHTY-SIX OF THIS ARTICLE, PROVIDED, HOWEVER, THAT NO  INTEREST
SHALL BE PAID THEREON.
  (CC-1)  INNOVATION TECHNOLOGY TAX REDUCTION CREDIT. ALLOWANCE OF CRED-
IT. A TAXPAYER WHICH IS AN ELIGIBLE HIGH-TECH ENTERPRISE AS  DEFINED  IN
SECTION THREE HUNDRED FIFTY OF THE ECONOMIC DEVELOPMENT LAW, OR WHICH IS
A  SOLE  PROPRIETOR  OF A ELIGIBLE HIGH-TECH ENTERPRISE OR A MEMBER OF A
PARTNERSHIP WHICH IS AN ELIGIBLE HIGH-TECH ENTERPRISE, SHALL BE  ALLOWED

A. 8997--A                         16

AN INNOVATION TECHNOLOGY TAX REDUCTION CREDIT AGAINST THE TAX IMPOSED BY
SUBSECTIONS (A) THROUGH (E) OF SECTION SIX HUNDRED ONE OF THIS PART.
  S  8. Section 210 of the tax law is amended by adding two new subdivi-
sions 27-a and 28-a to read as follows:
  27-A. INNOVATION TECHNOLOGY CREDIT FOR REAL PROPERTY TAXES. (A) ALLOW-
ANCE OF CREDIT. A TAXPAYER WHICH IS AN ELIGIBLE HIGH-TECH ENTERPRISE  AS
DEFINED  IN  SECTION THREE HUNDRED FIFTY OF THE ECONOMIC DEVELOPMENT LAW
SHALL BE ALLOWED A CREDIT  FOR  ELIGIBLE  REAL  PROPERTY  TAXES,  TO  BE
COMPUTED  AS  PROVIDED  IN SECTION THIRTY-THREE OF THIS CHAPTER, AGAINST
THE TAX IMPOSED BY THIS ARTICLE.
  (B) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER  THIS  SUBDIVISION
FOR  ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS
THAN THE HIGHER OF THE AMOUNTS PRESCRIBED IN PARAGRAPHS (C) AND  (D)  OF
SUBDIVISION  ONE  OF  THIS  SECTION.  HOWEVER,  IF  THE AMOUNT OF CREDIT
ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE  TAX  TO
SUCH  AMOUNT,  ANY  AMOUNT OF CREDIT THUS NOT DEDUCTIBLE IN SUCH TAXABLE
YEAR SHALL BE TREATED AS  AN  OVERPAYMENT  OF  TAX  TO  BE  CREDITED  OR
REFUNDED  IN  ACCORDANCE  WITH  THE  PROVISIONS  OF SECTION ONE THOUSAND
EIGHTY-SIX  OF  THIS  CHAPTER.  PROVIDED,  HOWEVER,  THE  PROVISIONS  OF
SUBSECTION  (C)  OF  SECTION  ONE  THOUSAND EIGHTY-EIGHT OF THIS CHAPTER
NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
  28-A. INNOVATION TECHNOLOGY TAX REDUCTION  CREDIT.  (A)  ALLOWANCE  OF
CREDIT.  A TAXPAYER WHICH IS AN ELIGIBLE HIGH-TECH ENTERPRISE AS DEFINED
IN SECTION THREE HUNDRED FIFTY OF THE ECONOMIC DEVELOPMENT LAW SHALL  BE
ALLOWED AN INNOVATION TECHNOLOGY TAX REDUCTION CREDIT, TO BE COMPUTED AS
PROVIDED IN SECTION THIRTY-FOUR OF THIS CHAPTER, AGAINST THE TAX IMPOSED
BY THIS ARTICLE.
  (B)  APPLICATION  OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION
FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO  LESS
THAN  THE  AMOUNT PRESCRIBED IN PARAGRAPH (D) OF SUBDIVISION ONE OF THIS
SECTION.
  S 9. Subparagraph (B) of paragraph 1 of subsection (i) of section  606
of  the  tax  law is amended by adding three new clauses (xxxi), (xxxii)
and (xxxiii) to read as follows:

(XXXI) INNOVATION TECHNOLOGY WAGE    ELIGIBLE WAGES UNDER SUBDIVISION
TAX CREDIT UNDER SUBSECTION (K-1)    NINETEEN-A OF SECTION TWO HUNDRED
                                     TEN

(XXXII) INNOVATION TECHNOLOGY CREDIT AMOUNT OF CREDIT UNDER SUBDIVISION
FOR REAL PROPERTY TAXES UNDER        TWENTY-SEVEN-A OF SECTION TWO
SUBSECTION (BB-1)                    HUNDRED TEN

(XXXIII) INNOVATION TECHNOLOGY TAX   AMOUNT OF BENEFIT UNDER SUBDIVISION
REDUCTION CREDIT UNDER SUBSECTION    TWENTY-EIGHT-A OF SECTION TWO
(CC-1)                               HUNDRED TEN
  S 10. This act shall take effect immediately.