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

                                  10353

                          I N  A S S E M B L Y

                              May 24, 2012
                               ___________

Introduced  by  M. of A. KOLB -- read once and referred to the Committee
  on Ways and Means

AN ACT to amend the tax law, in relation to  expanding  eligibility  for
  the  investment tax credit to all businesses in the state (Part A); to
  amend the tax law, in relation to a qualified emerging technology  tax
  credit  (Part  B); and to amend the general municipal law, in relation
  to certified startup business enterprises; and to amend the  tax  law,
  in relation to the angel tax credit (Part C)

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

  Section 1. This act enacts into law components of legislation relating
to "Invest-NY".  Each component is wholly contained within a Part  iden-
tified  as  Parts  A  through  C. The effective date for each particular
provision contained within such Part is set forth in the last section of
such Part. Any provision in any section contained within a Part, includ-
ing the effective date of the Part, which makes a reference to a section
"of this act", when used in connection with that  particular  component,
shall  be  deemed  to mean and refer to the corresponding section of the
Part in which it is found. Section three of  this  act  sets  forth  the
general effective date of this act.

                                 PART A

  Section  1.  Subparagraph  (i)  of  paragraph (b) of subdivision 12 of
section 210 of the tax law, as amended by chapter 637  of  the  laws  of
2008, is amended to read as follows:
  (i)  A  credit shall be allowed under this subdivision with respect to
tangible personal property and other tangible property, including build-
ings and structural components  of  buildings,  which  are:  depreciable
pursuant  to  section  one  hundred  sixty-seven of the internal revenue
code, have a useful life of four years or more, are acquired by purchase
as defined in section one  hundred  seventy-nine  (d)  of  the  internal
revenue code, have a situs in this state and are (A) principally used by
the  taxpayer  in  the production of goods by manufacturing, processing,

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

                                                           LBD15917-01-2

A. 10353                            2

assembling, refining, mining, extracting, farming,  agriculture,  horti-
culture, floriculture, viticulture or commercial fishing, (B) industrial
waste  treatment facilities or air pollution control facilities, used in
the taxpayer's trade or business, (C) research and development property,
(D)  principally  used in the ordinary course of the taxpayer's trade or
business as a broker or dealer in connection with the purchase  or  sale
(which  shall include but not be limited to the issuance, entering into,
assumption, offset, assignment, termination,  or  transfer)  of  stocks,
bonds  or  other  securities as defined in section four hundred seventy-
five (c)(2) of the Internal Revenue Code, or of commodities  as  defined
in  section  four hundred seventy-five (e) of the Internal Revenue Code,
(E) principally used in the ordinary course of the taxpayer's  trade  or
business  of  providing  investment  advisory  services  for a regulated
investment company as defined in section eight hundred fifty-one of  the
Internal  Revenue Code, or lending, loan arrangement or loan origination
services to customers in connection with the  purchase  or  sale  (which
shall include but not be limited to the issuance, entering into, assump-
tion,  offset,  assignment,  termination,  or transfer) of securities as
defined in section four hundred  seventy-five  (c)(2)  of  the  Internal
Revenue Code, (F) principally used in the ordinary course of the taxpay-
er's  business  as  an  exchange  registered  as  a  national securities
exchange within the meaning of sections 3(a)(1) and 6(a) of the  Securi-
ties  Exchange  Act  of  1934 or a board of trade as defined in [section
1410(a)(1) of the New York Not-for-Profit Corporation Law]  SUBPARAGRAPH
ONE OF PARAGRAPH (A) OF SECTION FOURTEEN HUNDRED TEN OF THE NOT-FOR-PRO-
FIT  CORPORATION LAW or as an entity that is wholly owned by one or more
such national securities exchanges or boards of trade and that  provides
automation or technical services thereto, [or] (G) principally used as a
qualified  film  production facility including qualified film production
facilities having a situs in an empire zone designated as such  pursuant
to  article  eighteen-B of the general municipal law, where the taxpayer
is providing three or more services to  any  qualified  film  production
company using the facility, including such services as a studio lighting
grid,  lighting  and grip equipment, multi-line phone service, broadband
information technology access,  industrial  scale  electrical  capacity,
food  services,  security  services,  and  heating,  ventilation and air
conditioning, OR (H) PRINCIPALLY USED IN  THE  ORDINARY  COURSE  OF  ANY
TRADE OR BUSINESS OF THE TAXPAYER NOT OTHERWISE DESCRIBED IN CLAUSES (A)
THROUGH  (G) OF THIS SUBPARAGRAPH.  For purposes of clauses (D), (E) and
(F) of this subparagraph, property purchased by  a  taxpayer  affiliated
with a regulated broker, dealer, registered investment adviser, national
securities  exchange  or  board of trade, is allowed a credit under this
subdivision if the property is used by its affiliated regulated  broker,
dealer,  registered  investment adviser, national securities exchange or
board of trade in accordance with  this  subdivision.  For  purposes  of
determining  if the property is principally used in qualifying uses, the
uses by the taxpayer described in clauses (D) and (E) of  this  subpara-
graph  may  be  aggregated.  In  addition, the uses by the taxpayer, its
affiliated regulated broker, dealer, and registered  investment  adviser
under  either  or  both  of  those clauses may be aggregated.  Provided,
however, a taxpayer shall not be allowed the credit provided by  clauses
(D),  (E) and (F) of this subparagraph unless (I) eighty percent or more
of the employees performing the  administrative  and  support  functions
resulting  from  or related to the qualifying uses of such equipment are
located in this state or (II)  the  average  number  of  employees  that
perform  the  administrative  and  support  functions  resulting from or

A. 10353                            3

related to the qualifying uses of such equipment and are located in this
state during the taxable year for which the credit is claimed  is  equal
to  or greater than ninety-five percent of the average number of employ-
ees  that  perform  these functions and are located in this state during
the thirty-six months immediately preceding the year for which the cred-
it is claimed, or (III) the number of employees located  in  this  state
during  the  taxable year for which the credit is claimed is equal to or
greater than ninety percent of the number of employees located  in  this
state on December thirty-first, nineteen hundred ninety-eight or, if the
taxpayer  was  not  a calendar year taxpayer in nineteen hundred ninety-
eight, the last day of its first  taxable  year  ending  after  December
thirty-first,  nineteen  hundred  ninety-eight.  If the taxpayer becomes
subject to tax in this state after the taxable year beginning  in  nine-
teen  hundred ninety-eight, then the taxpayer is not required to satisfy
the employment test provided in the preceding sentence of this  subpara-
graph  for  its first taxable year. For purposes of clause (III) of this
subparagraph the employment test will be based on the number of  employ-
ees  located in this state on the last day of the first taxable year the
taxpayer is subject to tax in this state. If the uses  of  the  property
must be aggregated to determine whether the property is principally used
in  qualifying  uses, then either each affiliate using the property must
satisfy this employment test or this employment test must  be  satisfied
through the aggregation of the employees of the taxpayer, its affiliated
regulated  broker,  dealer,  and registered investment adviser using the
property. For purposes of this subdivision, the term "goods"  shall  not
include electricity.
  S  2. Subparagraph (A) of paragraph 2 of subsection (a) of section 606
of the tax law, as amended by chapter  637  of  the  laws  of  2008,  is
amended to read as follows:
  (A)  A  credit  shall be allowed under this subsection with respect to
tangible personal property and other tangible property, including build-
ings and structural components  of  buildings,  which  are:  depreciable
pursuant  to  section  one  hundred  sixty-seven of the internal revenue
code, have a useful life of four years or more, are acquired by purchase
as defined in section one  hundred  seventy-nine  (d)  of  the  internal
revenue code, have a situs in this state and are (i) principally used by
the  taxpayer  in  the production of goods by manufacturing, processing,
assembling, refining, mining, extracting, farming,  agriculture,  horti-
culture,  floriculture,  viticulture  or commercial fishing, (ii) indus-
trial waste treatment facilities or air  pollution  control  facilities,
used in the taxpayer's trade or business, (iii) research and development
property, (iv) principally used in the ordinary course of the taxpayer's
trade  or business as a broker or dealer in connection with the purchase
or sale (which shall include but not be limited to the issuance,  enter-
ing  into,  assumption, offset, assignment, termination, or transfer) of
stocks, bonds or other securities as defined  in  section  four  hundred
seventy-five  (c)(2)  of the Internal Revenue Code, or of commodities as
defined in section 475(e) of the Internal Revenue Code, (v)  principally
used  in  the  ordinary  course  of  the taxpayer's trade or business of
providing investment advisory services for a regulated investment compa-
ny as defined in section eight hundred fifty-one of the Internal Revenue
Code, or lending, loan  arrangement  or  loan  origination  services  to
customers  in  connection with the purchase or sale (which shall include
but not be limited to the issuance, entering into,  assumption,  offset,
assignment,  termination,  or  transfer)  of  securities  as  defined in
section four hundred seventy-five (c)(2) of the Internal  Revenue  Code,

A. 10353                            4

[or]  (vi)  principally  used  as  a  qualified film production facility
including qualified film production facilities  having  a  situs  in  an
empire  zone  designated  as  such pursuant to article eighteen-B of the
general  municipal  law,  where  the taxpayer is providing three or more
services to any qualified film production company  using  the  facility,
including  such  services  as  a studio lighting grid, lighting and grip
equipment, multi-line phone service,  broadband  information  technology
access,  industrial  scale  electrical capacity, food services, security
services, and heating, ventilation and air conditioning, OR (VII)  PRIN-
CIPALLY  USED  IN  THE  ORDINARY  COURSE OF ANY TRADE OR BUSINESS OF THE
TAXPAYER NOT OTHERWISE DESCRIBED IN CLAUSES (I)  THROUGH  (VI)  OF  THIS
SUBPARAGRAPH.    For  purposes  of clauses (iv) and (v) of this subpara-
graph, property purchased by a  taxpayer  affiliated  with  a  regulated
broker,  dealer,  or  registered  investment adviser is allowed a credit
under this subsection if the property is used by  its  affiliated  regu-
lated broker, dealer or registered investment adviser in accordance with
this  subsection. For purposes of determining if the property is princi-
pally used in qualifying uses, the uses by  the  taxpayer  described  in
clauses  (iv)  and  (v) of this subparagraph may be aggregated. In addi-
tion, the uses by the taxpayer, its affiliated regulated broker,  dealer
and  registered investment adviser under either or both of those clauses
may be aggregated. Provided, however, a taxpayer shall  not  be  allowed
the  credit provided by clauses (iv) and (v) of this subparagraph unless
(I) eighty percent or more of the employees performing  the  administra-
tive  and  support functions resulting from or related to the qualifying
uses of such equipment are located in this state, or  (II)  the  average
number  of  employees  that perform the administrative and support func-
tions resulting from or related to the qualifying uses of such equipment
and are located in this state during the  taxable  year  for  which  the
credit is claimed is equal to or greater than ninety-five percent of the
average number of employees that perform these functions and are located
in  this  state  during  the thirty-six months immediately preceding the
year for which the credit is claimed, or (III) the number  of  employees
located  in  this  state during the taxable year for which the credit is
claimed is equal to or greater than ninety  percent  of  the  number  of
employees  located  in  this  state  on  December thirty-first, nineteen
hundred ninety-eight or, if the taxpayer was not a calendar year taxpay-
er in nineteen hundred ninety-eight, the last day of its  first  taxable
year  ending after December thirty-first, nineteen hundred ninety-eight.
If the taxpayer becomes subject to tax in this state after  the  taxable
year  beginning  in  nineteen hundred ninety-eight, then the taxpayer is
not required to satisfy the employment test provided  in  the  preceding
sentence  of  this  subparagraph  for  its  first  taxable year. For the
purposes of clause (III) of this subparagraph the employment  test  will
be  based  on  the number of employees located in this state on the last
day of the first taxable year the taxpayer is subject  to  tax  in  this
state.  If  the  uses  of  the  property must be aggregated to determine
whether the property is principally used in qualifying uses, then either
each affiliate using the property must satisfy this employment  test  or
this  employment  test  must be satisfied through the aggregation of the
employees of the taxpayer, its affiliated regulated broker, dealer,  and
registered  investment  adviser using the property. For purposes of this
subsection, the term "goods" shall not include electricity.
  S 3. This act shall take effect immediately and apply to taxable years
ending on or after January 1, 2013.

A. 10353                            5

                                 PART B

  Section 1. Paragraph (a) of subdivision 12-G of section 210 of the tax
law,  as  amended  by section 1-a of part A of chapter 63 of the laws of
2005, is amended to read as follows:
  (a) A taxpayer that is a qualified emerging technology company  pursu-
ant  to the provisions of section thirty-one hundred two-e [(and specif-
ically for the activities referenced in paragraph (b) of subdivision one
of such section thirty-one hundred two-e)]  of  the  public  authorities
law,  and  that  meets  the eligibility requirements in paragraph (b) of
this subdivision, shall be allowed a credit against the tax  imposed  by
this  article.  The  amount  of  credit shall be equal to the sum of the
amounts specified in paragraphs (c), (d), and (e)  of  this  subdivision
subject to the limitations in paragraph (f) of this subdivision.
  S  2. Paragraph (h) of subdivision 12-G of section 210 of the tax law,
as amended by section 1-a of part A of chapter 63 of the laws  of  2005,
is amended to read as follows:
  (h)  The credit allowed under this subdivision shall not be applicable
for taxable years beginning on or  after  January  first,  two  thousand
[twelve] FIFTEEN.
  S  3. Paragraph 1 of subsection (nn) of section 606 of the tax law, as
amended by section 1-a of part A of chapter 63 of the laws of  2005,  is
amended to read as follows:
  (1)  A taxpayer that is a qualified emerging technology company pursu-
ant to the provisions of section thirty-one hundred two-e [(and  specif-
ically for the activities referenced in paragraph (b) of subdivision one
of  such  section  thirty-one  hundred two-e)] of the public authorities
law, and that meets the eligibility requirements  in  paragraph  two  of
this  subsection,  shall  be allowed a credit against the tax imposed by
this article. The amount of credit shall be equal to  the  sum  (or  pro
rata share of the sum in the case of a partnership) of the amounts spec-
ified in paragraphs three, four, and five of this subsection, subject to
the limitations in paragraph six of this subsection.
  S  4. Paragraph 8 of subsection (nn) of section 606 of the tax law, as
amended by section 1-a of part A of chapter 63 of the laws of  2005,  is
amended to read as follows:
  (8)  The  credit allowed under this subsection shall not be applicable
for taxable years beginning on or  after  January  first,  two  thousand
[twelve] FIFTEEN.
  S  5.  This act shall take effect immediately, provided, however, that
sections one and three of this act shall apply to tax years beginning on
or after January 1, 2006.

                                 PART C

  Section 1. The general municipal  law  is  amended  by  adding  a  new
section 959-c to read as follows:
  S 959-C. CERTIFIED STARTUP BUSINESS ENTERPRISE. (A) CERTIFICATION. (I)
THE COMMISSIONER SHALL APPROVE APPLICATIONS FOR QUALIFICATION OF A BUSI-
NESS  ENTERPRISE AS A CERTIFIED STARTUP BUSINESS ENTERPRISE. AS A CONDI-
TION FOR APPROVAL OF SUCH APPLICATION, THE COMMISSIONER IS AUTHORIZED TO
SPECIFY CERTAIN REQUIREMENTS TO BE SATISFIED AS A CONDITION FOR APPROVAL
OF A BUSINESS ENTERPRISE AS A CERTIFIED STARTUP BUSINESS  ENTERPRISE  AS
THE  COMMISSIONER DEEMS NECESSARY TO ENSURE THE QUALIFYING ANGEL INVEST-
MENT WILL MAKE A SUBSTANTIAL CONTRIBUTION TO THE ECONOMIC DEVELOPMENT OF

A. 10353                            6

THIS STATE, INCLUDING THE USE OF  A  SYSTEM  OF  EVALUATION  OF  VARIOUS
APPLICANT BUSINESS ENTERPRISES IN A COMPETITIVE FASHION.
  (II)  WITH  RESPECT  TO AN APPROVED APPLICATION FOR QUALIFICATION OF A
BUSINESS ENTERPRISE AS A  CERTIFIED  STARTUP  BUSINESS  ENTERPRISE,  THE
COMMISSIONER  SHALL  ISSUE  TO SUCH BUSINESS ENTERPRISE A CERTIFICATE OF
QUALIFICATION AS A CERTIFIED STARTUP BUSINESS ENTERPRISE  SETTING  FORTH
THE  EFFECTIVE  DATE  OF  THE CERTIFICATION AND THE AMOUNT OF QUALIFYING
ANGEL INVESTMENT AWARDED TO SUCH BUSINESS ENTERPRISE, WHICH AMOUNT SHALL
BE NO LESS THAN ONE HUNDRED  THOUSAND  DOLLARS  AND  NO  MORE  THAN  TWO
MILLION DOLLARS.
  (III)  FOR  THE  PERIOD  JULY  FIRST, TWO THOUSAND TWELVE THROUGH JUNE
THIRTIETH, TWO THOUSAND THIRTEEN, THE COMMISSIONER  MAY  CERTIFY  UP  TO
TWENTY  MILLION  DOLLARS  IN QUALIFYING ANGEL INVESTMENT. FOR THE PERIOD
JULY FIRST, TWO THOUSAND THIRTEEN THROUGH JUNE THIRTIETH,  TWO  THOUSAND
FOURTEEN,  THE  COMMISSIONER MAY CERTIFY UP TO TWENTY MILLION DOLLARS IN
QUALIFYING ANGEL INVESTMENT. FOR THE PERIOD  JULY  FIRST,  TWO  THOUSAND
FOURTEEN  THROUGH JUNE THIRTIETH, TWO THOUSAND FIFTEEN, THE COMMISSIONER
MAY CERTIFY UP TO TWENTY MILLION DOLLARS IN QUALIFYING ANGEL INVESTMENT.
  (B) DEFINITIONS. AS USED IN THIS SECTION, THE  FOLLOWING  TERMS  SHALL
HAVE THE FOLLOWING MEANINGS:
  (I)  "CERTIFIED  STARTUP  BUSINESS  ENTERPRISE"  SHALL MEAN A BUSINESS
ENTERPRISE LOCATED IN NEW YORK STATE:
  (1) WITH LESS THAN FIVE MILLION DOLLARS IN ANNUAL REVENUES;
  (2) WHOSE PRIMARY ACTIVITY CONSISTS  OF  A  QUALIFYING  TECHNOLOGY  OR
INNOVATION ACTIVITY; AND
  (3) THAT HAS BEEN CERTIFIED AS A CERTIFIED STARTUP BUSINESS ENTERPRISE
BY THE COMMISSIONER.
  (II) "QUALIFYING TECHNOLOGY OR INNOVATION ACTIVITY" SHALL MEAN:
  (1)  BIOTECHNOLOGIES, WHICH SHALL BE DEFINED AS TECHNOLOGIES INVOLVING
THE SCIENTIFIC MANIPULATION  OF  LIVING  ORGANISMS,  ESPECIALLY  AT  THE
MOLECULAR  AND/OR  THE  SUB-MOLECULAR GENETIC LEVEL, TO PRODUCE PRODUCTS
CONDUCIVE TO IMPROVING THE LIVES AND  HEALTH  OF  PLANTS,  ANIMALS,  AND
HUMANS; AND THE ASSOCIATED SCIENTIFIC RESEARCH, PHARMACOLOGICAL, MECHAN-
ICAL,  AND  COMPUTATIONAL APPLICATIONS AND SERVICES CONNECTED WITH THESE
IMPROVEMENTS;
  (2) INFORMATION AND COMMUNICATION TECHNOLOGIES, EQUIPMENT AND  SYSTEMS
THAT  INVOLVE  ADVANCED  COMPUTER  SOFTWARE  AND HARDWARE, VISUALIZATION
TECHNOLOGIES, AND HUMAN INTERFACE TECHNOLOGIES;
  (3) ADVANCED MATERIALS AND PROCESSING TECHNOLOGIES  THAT  INVOLVE  THE
DEVELOPMENT,  MODIFICATION,  OR  IMPROVEMENT OF ONE OR MORE MATERIALS OR
METHODS TO PRODUCE DEVICES  AND  STRUCTURES  WITH  IMPROVED  PERFORMANCE
CHARACTERISTICS  OR SPECIAL FUNCTIONAL ATTRIBUTES, OR TO ACTIVATE, SPEED
UP, OR OTHERWISE ALTER CHEMICAL, BIOCHEMICAL, OR MEDICAL PROCESSES;
  (4) ELECTRONIC AND PHOTONIC DEVICES AND COMPONENTS FOR USE IN  PRODUC-
ING  ELECTRONIC,  OPTOELECTRONIC,  MECHANICAL  EQUIPMENT AND PRODUCTS OF
ELECTRONIC DISTRIBUTION WITH INTERACTIVE MEDIA CONTENT;
  (5) ENERGY EFFICIENCY, RENEWABLE ENERGY  AND  ENVIRONMENTAL  TECHNOLO-
GIES, PRODUCTS, DEVICES AND SERVICES;
  (6) SMALL SCALE SYSTEMS INTEGRATION AND PACKAGING; OR
  (7) MANUFACTURING;
  (III)  "QUALIFYING  ANGEL INVESTMENT" SHALL MEAN A CONTRIBUTION TO THE
CAPITAL OF A CERTIFIED STARTUP BUSINESS ENTERPRISE, PROVIDED  THAT  SUCH
CONTRIBUTION TO CAPITAL IS MADE WITHIN TWELVE MONTHS AFTER THE EFFECTIVE
DATE  OF THE CERTIFIED TECHNOLOGY VENTURE'S CERTIFICATE OF QUALIFICATION
AS A CERTIFIED TECHNOLOGY VENTURE AND SUCH CONTRIBUTION  IS  APPLIED  BY
THE  CERTIFIED  STARTUP  BUSINESS  ENTERPRISE  AGAINST ITS ALLOCATION OF

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QUALIFYING ANGEL INVESTMENT. TOGETHER WITH ALL  OTHER  QUALIFYING  ANGEL
INVESTMENTS  MADE TO A SINGLE CERTIFIED STARTUP BUSINESS ENTERPRISE, THE
TOTAL QUALIFYING ANGEL INVESTMENT MAY NOT EXCEED  TWO  MILLION  DOLLARS.
NOTHING HEREIN SHALL PROHIBIT A PERSON MAKING A QUALIFYING ANGEL INVEST-
MENT  FROM  MAKING ADDITIONAL CONTRIBUTIONS TO THE CAPITAL OF THE CERTI-
FIED STARTUP BUSINESS ENTERPRISE OR MAKING LOANS TO OR OTHER INVESTMENTS
IN THE CERTIFIED STARTUP BUSINESS ENTERPRISE,  PROVIDED,  HOWEVER,  THAT
SUCH  OTHER CONTRIBUTIONS, LOANS AND INVESTMENTS SHALL NOT BE TREATED AS
QUALIFYING ANGEL INVESTMENTS.
  S 2. Section 210 of the tax law is amended by adding a new subdivision
12-H to read as follows:
  12-H. ANGEL TAX CREDIT. (A) ALLOWANCE OF CREDIT. A TAXPAYER  THAT  HAS
MADE A QUALIFYING ANGEL INVESTMENT, AS SUCH TERM IS DEFINED IN PARAGRAPH
(III)  OF  SUBDIVISION  (B)  OF SECTION NINE HUNDRED FIFTY-NINE-C OF THE
GENERAL MUNICIPAL LAW, SHALL BE ALLOWED A CREDIT EQUAL TO FIFTY  PERCENT
OF THE AMOUNT OF SUCH QUALIFYING ANGEL INVESTMENT.
  (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 TEN HUNDRED EIGHT-
Y-SIX OF THIS CHAPTER. PROVIDED, HOWEVER, THE PROVISIONS  OF  SUBSECTION
(C) OF SECTION TEN HUNDRED EIGHTY-EIGHT OF THIS CHAPTER NOTWITHSTANDING,
NO INTEREST SHALL BE PAID THEREON.
  S  3. Section 606 of the tax law is amended by adding a new subsection
(uu) to read as follows:
  (UU) ANGEL TAX CREDIT. (1) ALLOWANCE OF CREDIT. A  TAXPAYER  THAT  HAS
MADE A QUALIFYING ANGEL INVESTMENT, AS SUCH TERM IS DEFINED IN PARAGRAPH
(III)  OF  SUBDIVISION  (B)  OF SECTION NINE HUNDRED FIFTY-NINE-C OF THE
GENERAL MUNICIPAL LAW, OR THAT IS A MEMBER OF  A  PARTNERSHIP  THAT  HAS
MADE  A  QUALIFYING ANGEL INVESTMENT, SHALL BE ALLOWED A CREDIT EQUAL TO
FIFTY PERCENT OF THE AMOUNT OF SUCH QUALIFYING ANGEL INVESTMENT  OR,  IN
THE  CASE OF A TAXPAYER WHO IS A MEMBER OF A PARTNERSHIP THAT HAS MADE A
QUALIFYING ANGEL INVESTMENT, A PORTION OF SUCH QUALIFYING ANGEL  INVEST-
MENT  EQUAL  TO THE PORTION OF ITEMS OF INCOME, GAIN, LOSS AND DEDUCTION
ASSOCIATED WITH THE QUALIFYING ANGEL INVESTMENT  PROPERLY  ALLOCABLE  TO
SUCH  TAXPAYER  UNDER  SECTION  704 OF THE INTERNAL REVENUE CODE FOR THE
TAXABLE YEAR.
  (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.
  S 4. Section 1456 of the tax law is amended by adding a new subsection
(z) to read as follows:
   (Z) ANGEL TAX CREDIT. (1) ALLOWANCE OF CREDIT. A  TAXPAYER  THAT  HAS
MADE A QUALIFYING ANGEL INVESTMENT, AS SUCH TERM IS DEFINED IN PARAGRAPH
(III)  OF  SUBDIVISION  (B)  OF SECTION NINE HUNDRED FIFTY-NINE-C OF THE
GENERAL MUNICIPAL LAW, SHALL BE ALLOWED A CREDIT EQUAL TO FIFTY  PERCENT
OF THE AMOUNT OF SUCH QUALIFYING ANGEL INVESTMENT.
  (2)  APPLICATION  OF  CREDIT. THE CREDIT ALLOWED UNDER THIS SUBSECTION
FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO  LESS

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THAN THE MINIMUM TAX FIXED BY SUBSECTION (B) OF SECTION FOURTEEN HUNDRED
FIFTY-FIVE  OF  THIS  ARTICLE.  HOWEVER, IF THE AMOUNT OF CREDIT ALLOWED
UNDER THIS SUBSECTION FOR ANY TAXABLE  YEAR  REDUCES  THE  TAX  TO  SUCH
AMOUNT,  THEN  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 TEN HUNDRED EIGHT-
Y-SIX  OF  THIS CHAPTER. PROVIDED, HOWEVER, THE PROVISIONS OF SUBSECTION
(C) OF SECTION TEN HUNDRED EIGHTY-EIGHT OF THIS CHAPTER NOTWITHSTANDING,
NO INTEREST SHALL BE PAID THEREON.
  S 5. Section 1511 of the tax law is amended by adding a  new  subdivi-
sion (cc) to read as follows:
  (CC)  ANGEL  TAX  CREDIT. (1) ALLOWANCE OF CREDIT. A TAXPAYER THAT HAS
MADE A QUALIFYING ANGEL INVESTMENT, AS SUCH TERM IS DEFINED IN PARAGRAPH
(III) OF SUBDIVISION (B) OF SECTION NINE  HUNDRED  FIFTY-NINE-C  OF  THE
GENERAL  MUNICIPAL LAW, SHALL BE ALLOWED A CREDIT EQUAL TO FIFTY PERCENT
OF THE AMOUNT OF SUCH QUALIFYING ANGEL INVESTMENT.
  (2) 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 MINIMUM TAX FIXED BY  PARAGRAPH  FOUR  OF  SUBDIVISION  (A)  OF
SECTION  FIFTEEN  HUNDRED  TWO  OF  THIS  ARTICLE  OR BY SECTION FIFTEEN
HUNDRED TWO-A OF THIS ARTICLE, WHICHEVER IS APPLICABLE. HOWEVER, IF  THE
AMOUNT  OF  CREDIT  ALLOWED  UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR
REDUCES THE TAX TO SUCH AMOUNT, THEN  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  TEN  HUNDRED EIGHTY-SIX OF THIS CHAPTER. PROVIDED, HOWEVER, THE
PROVISIONS OF SUBSECTION (C) OF SECTION TEN HUNDRED EIGHTY-EIGHT OF THIS
CHAPTER NOTWITHSTANDING, NO INTEREST SHALL BE PAID THEREON.
  S 6. This act shall take effect immediately.
  S 2. Severability. If any clause, sentence, paragraph, section or part
of this act shall be adjudged by any court of competent jurisdiction  to
be  invalid  and  after  exhaustion  of all further judicial review, the
judgment shall not affect, impair, or invalidate the remainder  thereof,
but  shall  be  confined in its operation to the clause, sentence, para-
graph, section or part of this act directly involved in the  controversy
in which the judgment shall have been rendered.
  S  3.  This  act shall take effect immediately provided, however, that
the applicable effective date of Parts A through C of this act shall  be
as specifically set forth in the last section of such Parts.