S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  2745

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                              March 2, 2009
                               ___________

Introduced  by  Sen.  GOLDEN -- read twice and ordered printed, and when
  printed to be committed to the Committee on Investigations and Govern-
  ment Operations

AN ACT to amend the tax law, in  relation  to  establishing  a  targeted
  human pharmacological project fee credit

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

  Section 1. The tax law is amended by adding a new section 30  to  read
as follows:
  S  30.  TARGETED  HUMAN  PHARMACOLOGICAL PROJECT FEE CREDIT. (A) DEFI-
NITIONS.  AS USED IN THIS SECTION THE FOLLOWING  TERMS  SHALL  HAVE  THE
FOLLOWING MEANINGS:
  (1) "PRIMARILY" SHALL MEAN MORE THAN FIFTY PERCENT.
  (2)  "RESEARCH  AND  DEVELOPMENT  COSTS"  SHALL MEAN IN-HOUSE RESEARCH
EXPENSES WITHIN THE MEANING OF SECTION 41 (B) (2) OF THE INTERNAL REVEN-
UE CODE.
  (3) "PROJECT FEES" SHALL MEAN THE MONETARY AMOUNT ACTUALLY PAID TO THE
U.S.F.D.A. THAT CONSTITUTES THE FEE DUE UPON THE SUBMISSION OF  A  HUMAN
DRUG  APPLICATION OR SUPPLEMENT PURSUANT TO U.S.C. S 379 H (A) (1) FOR A
HUMAN DRUG, RESEARCH AND  DEVELOPMENT  COSTS  OF  WHICH  WERE  PRIMARILY
INCURRED IN NEW YORK STATE.
  (4)  "U.S.F.D.A."  SHALL MEAN THE UNITED STATES FOOD AND DRUG ADMINIS-
TRATION.
  (B) TARGETED HUMAN PHARMACOLOGICAL PROJECT FEE CREDIT. (1) A  TAXPAYER
WHO IS SUBJECT TO TAX UNDER ARTICLE NINE-A OR TWENTY-TWO OF THIS CHAPTER
SHALL BE ALLOWED A CREDIT AGAINST SUCH TAX. SUCH CREDIT SHALL BE ALLOWED
WITH RESPECT TO PROJECT FEES.
  (2)  THE  APPLICABLE  PERCENTAGE SHALL EQUAL THIRTY-SIX PERCENT OF THE
COST OF PROJECT FEES.
  (3) THE CREDIT ALLOWED UNDER THIS SECTION MAY ONLY  BE  CLAIMED  AFTER
ITS LICENSURE IS APPROVED BY THE U.S.F.D.A. AND THE TAXPAYER IS LICENSED

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD07650-01-9
              

S. 2745                             2

TO  MANUFACTURE  SUCH  HUMAN  DRUG APPLICATION OR SUPPLEMENT IN NEW YORK
STATE.
  (4)  THE CREDIT ALLOWED UNDER THIS SECTION MAY BE TAKEN ONLY AFTER THE
TAXPAYER COMPLETES AND  SUBMITS  AN  APPLICATION  TO  THE  COMMISSIONER,
SIGNED BY AN AUTHORIZED REPRESENTATIVE OF THE TAXPAYER. SUCH APPLICATION
SHALL  INCLUDE  COPIES  OF  ALL RELEVANT LICENSES AND APPROVALS FROM THE
U.S.F.D.A. AND ANY OTHER NECESSARY FEDERAL OR NEW YORK STATE  REGULATORY
BODY. SUCH APPLICATION MUST BE FILED WITH THE COMMISSIONER WITHIN NINETY
DAYS  OF  THE  GRANTING  OF ALL NECESSARY LICENSES AND CERTIFICATIONS TO
ALLOW THE MANUFACTURING OF SUCH HUMAN DRUG APPLICATION OR SUPPLEMENT.
  (5) IF THE TAXPAYER DOES NOT BEGIN PRIMARILY MANUFACTURING  THE  HUMAN
DRUG  APPLICATION  OR  SUPPLEMENT  IN NEW YORK STATE WITHIN ONE CALENDAR
YEAR OF THE GRANTING OF THE CREDIT, AND DOES NOT  PRIMARILY  MANUFACTURE
SUCH  HUMAN  DRUG  APPLICATION  OR SUPPLEMENT FOR AT LEAST FIVE CALENDAR
YEARS FROM THE ONSET OF PRIMARY  MANUFACTURING,  ANY  AMOUNT  OF  CREDIT
ALLOWED  BY  THIS  SECTION  SHALL BE ADDED BACK IN THE TAXABLE YEAR THAT
SUCH CREDIT IS RECAPTURED AND THIS RECAPTURE IS  NO  LONGER  SUBJECT  TO
JUDICIAL REVIEW.
  (6)  ANY DEDUCTION FROM GROSS INCOME THAT MAY BE TAKEN WITH RESPECT TO
ANY EXPENDITURES QUALIFYING FOR THE CREDIT UNDER THIS SECTION  SHALL  BE
DISALLOWED TO THE EXTENT OF THE CREDIT.
  (7)  ONLY  PROJECT  FEES  PAID BY THE TAXPAYER TO THE U.S.F.D.A. ON OR
AFTER THE EFFECTIVE DATE OF THIS SECTION ARE ELIGIBLE FOR THE CREDIT.
  (C) CROSS-REFERENCES. FOR APPLICATION OF THE CREDIT  PROVIDED  FOR  IN
THIS  SECTION SEE; (1) ARTICLE 9-A: SECTION 210, SUBDIVISION 41, AND (2)
ARTICLE 22: SECTION 606, SUBSECTIONS (I) AND (QQ).
  S 2. Section 210 of the tax law is amended by adding a new subdivision
41 to read as follows:
  41. TARGETED HUMAN PHARMACOLOGICAL  PROJECT  FEE  CREDIT.  A  TAXPAYER
SHALL  BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED IN SECTION THIRTY
OF THIS CHAPTER, AGAINST THE TAX IMPOSED BY  THIS  ARTICLE.  THE  CREDIT
ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE
TAX DUE FOR SUCH YEAR TO LESS THAN THE HIGHER AMOUNT PRESCRIBED IN PARA-
GRAPHS  (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 NOT DEDUCTIBLE IN
SUCH TAXABLE YEAR SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE  CRED-
ITED  OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION ONE THOU-
SAND 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.
  S 3. Subparagraph (B) of paragraph 1 of subsection (i) of section  606
of  the  tax  law, as amended by section 2 of part ZZ-1 of chapter 57 of
the laws of 2008, is amended to read as follows:
  (B) shall be treated as the owner of a new business  with  respect  to
such  share  if  the corporation qualifies as a new business pursuant to
paragraph (j) of subdivision twelve of section two hundred ten  of  this
chapter.

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

(I) Investment tax credit under      Investment credit base or qualified
subsection (a)                       rehabilitation expenditures under

S. 2745                             3

                                     subdivision twelve of section two
                                     hundred ten

(II) Empire zone investment          Cost or other basis under
tax credit under subsection (j)      subdivision twelve-B of section
                                     two hundred ten

(III) Empire zone wage tax credit    Eligible wages under subdivision
under subsection (k)                 nineteen of section two hundred
                                     ten or subsection (e) of section
                                     fourteen hundred fifty-six

(IV) Empire zone capital tax         Qualified investments and
credit under subsection (l)          contributions under subdivision
                                     twenty of section two hundred ten
                                     or subsection (d) of section
                                     fourteen hundred fifty-six

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

(VI) Credit for employment of        Qualified first-year wages or
persons with disabilities            qualified second-year wages under
under subsection (o)                 subdivision twenty-three of
                                     section two hundred ten or
                                     subsection (f) of section
                                     fourteen hundred fifty-six

(VII) Employment incentive credit    Applicable investment credit base
under subsection (a-1)               under subdivision twelve-D of
                                     section two hundred ten

(VIII) Empire zone employment        Applicable investment credit
incentive credit under subsection    under subdivision twelve-C of
(j-1)                                section two hundred ten

(IX) Alternative fuels credit        Cost under subdivision twenty-four
under subsection (p)                 of section two hundred ten

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

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

(XII) Credit for purchase of an      Cost of an automated external
automated external defibrillator     defibrillator under subdivision
under subsection (s)                 twenty-five of section two hundred
                                     ten or subsection (j) of section
                                     fourteen hundred fifty-six

(XIII) Low-income housing credit     Credit amount under subdivision
under subsection (x)                 thirty of section two hundred ten

S. 2745                             4

                                     or subsection (l) of section
                                     fourteen hundred fifty-six

(XIV) Credit for transportation      Amount of credit under subdivision
improvement contributions under      thirty-two of section two hundred
subsection (z)                       ten or subsection (n) of section
                                     fourteen hundred fifty-six

(XV) QEZE credit for real property   Amount of credit under subdivision
taxes under subsection (bb)          twenty-seven of section two hundred
                                     ten or subsection (o) of section
                                     fourteen hundred fifty-six

(XVI) QEZE tax reduction credit      Amount of benefit period factor,
under subsection (cc)                employment increase factor and zone
                                     allocation factor (without regard
                                     to pro ration) under subdivision
                                     twenty-eight of section two hundred
                                     ten or subsection (p) of section
                                     fourteen hundred fifty-six and
                                     amount of tax factor as determined
                                     under subdivision (f) of section
                                     sixteen

(XVII) Green building credit under   Amount of green building credit
subsection (y)                       under subdivision thirty-one of
                                     section two hundred ten or
                                     subsection (m) of section fourteen
                                     hundred fifty-six

(XVIII) Credit for long-term care    Qualified costs under subdivision
insurance premiums under subsection  twenty-five-a of section two
(aa)                                 hundred ten or subsection (k) of
                                     section fourteen hundred fifty-six

(XIX) Brownfield redevelopment       Amount of credit under subdivision
credit under subsection (dd)         thirty-three of section two hundred
                                     ten or subsection (q) of section
                                     fourteen hundred fifty-six

(XX) Remediated brownfield credit    Amount of credit under subdivision
for real property taxes for          thirty-four of section two hundred
qualified sites under subsection     ten or subsection (r) of section
(ee)                                 fourteen hundred fifty-six

(XXI) Environmental remediation      Amount of credit under subdivision
insurance credit under subsection    thirty-five of section two hundred
(ff)                                 ten or subsection (s) of section
                                     fourteen hundred fifty-six

(XXII) Empire state film production  Amount of credit for qualified
credit under subsection (gg)         production costs in production of a
                                     qualified film under subdivision
                                     thirty-six of section two hundred
                                     ten

S. 2745                             5

(XXIII) Qualified emerging           Qualifying expenditures and
technology company facilities,       development activities under
operations and training credit       subdivision twelve-G of section two
under subsection (nn)                hundred ten

(XXIV) Security training tax credit  Amount of credit under subdivision
under subsection (ii)                thirty-seven of section two hundred
                                     ten or under subsection (t) of
                                     section fourteen hundred fifty-six

(XXV) Credit for qualified fuel      Amount of credit under subdivision
cell electric generating equipment   thirty-seven of section two hundred
expenditures under subsection (g-2)  ten or subsection (t) of section
                                     fourteen hundred fifty-six

(XXVI) Empire state commercial       Amount of credit for qualified
production credit under subsection   production costs in production of
(jj)                                 a qualified commercial under
                                     subdivision thirty-eight of
                                     section two hundred ten

(XXVII) Biofuel production tax       Amount of credit under subdivision
credit under subsection (jj)         thirty-eight of section two hundred
                                     ten

(XXVIII) Clean heating fuel credit   Amount of credit under subdivision
under subsection (mm)                thirty-nine of section two hundred
                                     ten

(XXIX) Credit for rehabilitation     Amount of credit under subdivision
of historic properties under         forty of [subsection] SECTION
subsection (oo)                      two hundred ten

(XXX) Credit for companies who       Amount of credit under subdivision
provide transportation to            forty of section two hundred ten
individuals with disabilities under
subsection (oo)

(XXXI) CREDIT FOR TARGETED HUMAN     QUALIFYING EXPENDITURES UNDER
PHARMACOLOGICAL PROJECT FEES UNDER   SUBDIVISION FORTY-ONE OF SECTION
SUBSECTION (QQ)                      TWO HUNDRED TEN
  S  4. Section 606 of the tax law is amended by adding a new subsection
(qq) to read as follows:
  (QQ) TARGETED HUMAN PHARMACOLOGICAL PROJECT  FEE  CREDIT.  A  TAXPAYER
SHALL  BE  ALLOWED  A  CREDIT  TO BE COMPUTED AS PROVIDED FOR IN SECTION
THIRTY OF THIS CHAPTER, AGAINST THE TAX IMPOSED BY THIS ARTICLE. 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 ACCORD-
ANCE WITH THE PROVISIONS OF SECTION SIX HUNDRED EIGHTY-SIX OF THIS ARTI-
CLE, PROVIDED, HOWEVER, THAT NO INTEREST SHALL BE PAID THEREON.
  S 5. This act shall take effect immediately and shall apply to taxable
years commencing on or after January 1, 2009; provided, however that the
empire state film production credit under subsection  (gg),  the  empire
state  commercial production credit under subsection (jj) and the credit
for companies who provide transportation to individuals  with  disabili-

S. 2745                             6

ties  under  subsection  (oo) of section 606 of the tax law contained in
section three of this act shall expire on the same date as  provided  in
section  9  of  part  P  of  chapter 60 of the laws of 2004, as amended,
section  10  of part V of chapter 62 of the laws of 2006, as amended and
section 5 of chapter 522 of the laws of 2006, as amended, respectively.