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

                                  7683

                            I N  S E N A T E

                              June 13, 2012
                               ___________

Introduced  by  Sen.  GOLDEN -- read twice and ordered printed, and when
  printed to be committed to the Committee on Rules

AN ACT to amend the tax law, in relation to authorizing any city  having
  a population of one million or more to provide an angel investor cred-
  it  against the unincorporated business tax and personal income tax of
  such city for certain qualified emerging companies and  medical  tech-
  nology companies

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

  Section 1. Section 1201-a of the tax law is amended by  adding  a  new
subdivision (e) to read as follows:
  (E)  ANGEL  INVESTOR  CREDIT. 1. ANY CITY IN THIS STATE HAVING A POPU-
LATION OF ONE MILLION OR MORE,  ACTING  THROUGH  ITS  LOCAL  LEGISLATIVE
BODY,  IS  HEREBY  AUTHORIZED  TO ADOPT AND AMEND LOCAL LAWS TO ALLOW AN
ANGEL INVESTOR CREDIT AGAINST THE UNINCORPORATED  BUSINESS  TAX  IMPOSED
PURSUANT  TO  THE  AUTHORITY OF CHAPTER SEVEN HUNDRED SEVENTY-TWO OF THE
LAWS OF NINETEEN HUNDRED SIXTY-SIX TO AN ELIGIBLE TAXPAYER THAT: (A)  IS
AN  ACCREDITED  INVESTOR  AS  DEFINED IN RULE 501 OF REGULATION D OF THE
SECURITIES EXCHANGE COMMISSION OF THE  UNITED  STATES  PURSUANT  TO  THE
SECURITIES  EXCHANGE  ACT  OF  1933,  AS  AMENDED; (B) MAKES A QUALIFIED
INVESTMENT IN A QUALIFIED EMERGING TECHNOLOGY  COMPANY,  AS  DEFINED  IN
PARAGRAPH  (C) OF SUBDIVISION ONE OF SECTION THIRTY-ONE HUNDRED TWO-E OF
THE PUBLIC AUTHORITIES LAW, EXCEPT THAT SUCH COMPANY SHALL MEAN A COMPA-
NY LOCATED IN SUCH CITY, THAT ENGAGES IN THE  ACTIVITIES  REFERENCED  IN
SUBPARAGRAPH   FIVE  OF  PARAGRAPH  B  OF  SUBDIVISION  ONE  OF  SECTION
THIRTY-ONE HUNDRED TWO-E OF THE PUBLIC AUTHORITIES LAW, OR MAKES A QUAL-
IFIED INVESTMENT IN A COMPANY THAT ENGAGES  IN  MEDICAL  TECHNOLOGY,  AS
DEFINED  IN  PARTS  3345 AND 3394 OF THE NORTH AMERICAN INDUSTRY CLASSI-
FICATION SYSTEM; (C) HAS NO MORE THAN ONE HUNDRED  FULL-TIME  EMPLOYEES,
OF  WHICH AT LEAST SEVENTY-FIVE PERCENT ARE EMPLOYED IN SUCH CITY, HAS A
RATIO OF RESEARCH AND DEVELOPMENT FUNDS TO NET SALES, AS REFERRED TO  IN
SECTION  THIRTY-ONE  HUNDRED  TWO-E OF THE PUBLIC AUTHORITIES LAW, WHICH
EQUALS OR EXCEEDS SIX PERCENT DURING ITS TAXABLE  YEAR,  AND  HAS  GROSS
REVENUES,  ALONG  WITH  THE GROSS REVENUES OF ITS AFFILIATES AND RELATED

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

                                                           LBD16210-01-2

S. 7683                             2

MEMBERS, NOT EXCEEDING TWENTY MILLION DOLLARS FOR THE TAXABLE YEAR IMME-
DIATELY PRECEDING THE YEAR THE TAXPAYER IS ALLOWED A CREDIT  UNDER  THIS
SUBDIVISION;  AND  (D)  OWNS  LESS  THAN  FIFTY PERCENT OF THE QUALIFIED
EMERGING  TECHNOLOGY  COMPANY  OR  MEDICAL  TECHNOLOGY COMPANY AFTER THE
QUALIFIED INVESTMENT; PROVIDED, HOWEVER, NO CREDIT  AUTHORIZED  BY  THIS
SUBDIVISION FOR A QUALIFIED INVESTMENT SHALL BE GRANTED TO A TAXPAYER IF
SUCH  TAXPAYER  IS  GRANTED  AN  ANGEL INVESTOR CREDIT AGAINST THE TAXES
IMPOSED PURSUANT TO ARTICLE THIRTY OF THIS CHAPTER  FOR  SUCH  QUALIFIED
INVESTMENT.  THE  AMOUNT  OF THE CREDIT SHALL BE EQUAL TO THE SUM OF THE
AMOUNTS SPECIFIED IN PARAGRAPH TWO OF THIS SUBDIVISION. FOR THE PURPOSES
OF THIS SUBDIVISION, A "QUALIFIED INVESTMENT" SHALL  MEAN  THE  CONTRIB-
UTION  OF PROPERTY TO A CORPORATION IN EXCHANGE FOR ORIGINAL ISSUE CAPI-
TAL STOCK OR OTHER OWNERSHIP INTEREST, THE CONTRIBUTION OF PROPERTY TO A
PARTNERSHIP IN EXCHANGE FOR AN INTEREST IN THE PARTNERSHIP, AND  SIMILAR
CONTRIBUTIONS IN THE CASE OF A BUSINESS ENTITY NOT IN CORPORATE OR PART-
NERSHIP  FORM  IN  EXCHANGE  FOR  AN  OWNERSHIP INTEREST IN SUCH ENTITY;
PROVIDED, HOWEVER, A QUALIFIED INVESTMENT SHALL NOT INCLUDE  INVESTMENTS
MADE  BY  OR  ON  BEHALF OF AN OWNER OF THE BUSINESS, INCLUDING, BUT NOT
LIMITED TO, A STOCKHOLDER, PARTNER OR SOLE PROPRIETOR,  OR  ANY  RELATED
PERSON,  AS DEFINED IN SUBPARAGRAPH (C) OF PARAGRAPH THREE OF SUBSECTION
(B) OF SECTION FOUR HUNDRED SIXTY-FIVE OF THE INTERNAL REVENUE CODE. FOR
PURPOSES OF THIS SUBDIVISION, THE TERM "RELATED  MEMBER"  SHALL  MEAN  A
PERSON, CORPORATION, OR OTHER ENTITY, INCLUDING AN ENTITY THAT IS TREAT-
ED AS A PARTNERSHIP OR OTHER PASS-THROUGH VEHICLE FOR PURPOSES OF FEDER-
AL TAXATION, WHETHER SUCH PERSON, CORPORATION OR ENTITY IS A TAXPAYER OR
NOT,  WHERE  ONE  SUCH PERSON, CORPORATION, OR ENTITY, OR SET OF RELATED
PERSONS, CORPORATIONS  OR  ENTITIES,  DIRECTLY  OR  INDIRECTLY  OWNS  OR
CONTROLS A CONTROLLING INTEREST IN ANOTHER ENTITY.  SUCH ENTITY OR ENTI-
TIES  MAY  INCLUDE  ALL TAXPAYERS UNDER ARTICLES NINE, NINE-A, THIRTEEN,
TWENTY-TWO, THIRTY-TWO, THIRTY-THREE OR THIRTY-THREE-A OF THIS  CHAPTER.
FOR PURPOSES OF THIS SUBDIVISION, THE TERM "AFFILIATES" SHALL MEAN THOSE
CORPORATIONS  THAT  ARE MEMBERS OF THE SAME AFFILIATED GROUP, AS DEFINED
IN SECTION FIFTEEN HUNDRED FOUR OF THE INTERNAL  REVENUE  CODE,  AS  THE
TAXPAYER.
  2.  (A)  THE PERCENTAGE OF THE CREDIT ALLOWED TO A TAXPAYER UNDER THIS
SUBDIVISION SHALL BE TWO PERCENT  PER  EACH  QUALIFIED  INVESTMENT  MADE
DURING THE TAXABLE YEAR AND THE SUCCEEDING FOUR YEARS PROVIDED THE CRED-
IT IS PROPERLY CLAIMED PURSUANT TO THE RULES ESTABLISHED BY THE NEW YORK
CITY  DEPARTMENT  OF  FINANCE,  UP TO A MAXIMUM ALLOWED CREDIT OF TWENTY
THOUSAND DOLLARS PER TAXABLE YEAR. THE TOTAL AMOUNT OF CREDIT  ALLOWABLE
TO  A TAXPAYER UNDER THIS SUBDIVISION FOR ALL YEARS, TAKEN IN THE AGGRE-
GATE, SHALL NOT EXCEED ONE HUNDRED THOUSAND DOLLARS. IF THE TAXPAYER  IS
A PARTNER IN A PARTNERSHIP OR MEMBER IN AN UNINCORPORATED BUSINESS, THEN
THE  LIMIT  IMPOSED  BY  THE  PRECEDING SENTENCE SHALL BE APPLIED AT THE
ENTITY LEVEL, SO THAT THE AGGREGATE CREDIT ALLOWED TO ALL  THE  PARTNERS
IN  SUCH  PARTNERSHIP  OR MEMBERS IN SUCH UNINCORPORATED BUSINESS IN ANY
TAXABLE YEAR DOES NOT EXCEED TWENTY  THOUSAND  DOLLARS,  AND  THE  TOTAL
AMOUNT  OF  CREDIT  ALLOWABLE TO ALL THE PARTNERS IN SUCH PARTNERSHIP OR
MEMBERS IN SUCH UNINCORPORATED BUSINESS FOR  ALL  YEARS,  TAKEN  IN  THE
AGGREGATE,  SHALL  NOT  EXCEED ONE HUNDRED THOUSAND DOLLARS.  THE CREDIT
ALLOWED UNDER THIS SUBDIVISION SHALL NOT BE ALLOWED TO A  TAXPAYER  WITH
RESPECT  TO  ANY  UNINCORPORATED  BUSINESS TAX PAID FOR ANY TAXABLE YEAR
BEGINNING BEFORE  JANUARY  FIRST,  TWO  THOUSAND  THIRTEEN.  THE  CREDIT
ALLOWED  UNDER  THIS SUBDIVISION FOR ANY TAXABLE YEAR SHALL BE DEEMED TO
BE AN OVERPAYMENT OF TAX BY THE TAXPAYER TO  BE  CREDITED  OR  REFUNDED,

S. 7683                             3

WITHOUT INTEREST, IN ACCORDANCE WITH THE PROVISIONS OF SECTION 11-526 OF
THE ADMINISTRATIVE CODE OF THE CITY OF NEW YORK.
  (B)  IF, AT ANY TIME DURING THE FIVE YEAR PERIOD BEGINNING ON THE DATE
THAT THE QUALIFIED INVESTMENT IS MADE BY THE TAXPAYER THERE IS A  RECAP-
TURE  EVENT WITH RESPECT TO SUCH INVESTMENT, THEN THE UNINCORPORATED TAX
OWED BY SUCH TAXPAYER FOR THE TAXABLE YEAR IN WHICH  SUCH  EVENT  OCCURS
SHALL BE INCREASED BY THE CREDIT RECAPTURE AMOUNT.
  (1)  FOR PURPOSES OF THIS SUBPARAGRAPH, THE CREDIT RECAPTURE AMOUNT IS
AN AMOUNT EQUAL TO THE SUM OF: (I) THE AGGREGATE DECREASE IN THE CREDITS
ALLOWED TO THE TAXPAYER UNDER THIS SUBDIVISION  FOR  ALL  PRIOR  TAXABLE
YEARS  WHICH  WOULD HAVE RESULTED IF NO CREDIT HAD BEEN DETERMINED UNDER
THIS SUBDIVISION WITH RESPECT TO SUCH QUALIFIED  INVESTMENT,  PLUS  (II)
INTEREST  AT  THE  UNDERPAYMENT  RATE  ESTABLISHED  BY THE NEW YORK CITY
DEPARTMENT OF FINANCE FOR EACH PRIOR TAXABLE YEAR FOR THE PERIOD  BEGIN-
NING  ON  THE  DUE DATE FOR FILING THE RETURN FOR THE PRIOR TAXABLE YEAR
INVOLVED.
  (2) FOR PURPOSES OF THIS SUBPARAGRAPH, A RECAPTURE EVENT SHALL MEAN IF
AT THE CLOSE OF ANY TAXABLE YEAR IN THE FIVE-YEAR PERIOD: (I) THE QUALI-
FIED EMERGING TECHNOLOGY COMPANY OR MEDICAL TECHNOLOGY COMPANY NO LONGER
QUALIFIES AS A QUALIFIED EMERGING TECHNOLOGY COMPANY OR MEDICAL TECHNOL-
OGY COMPANY; (II) THE QUALIFIED EMERGING TECHNOLOGY COMPANY  OR  MEDICAL
TECHNOLOGY  COMPANY  HAS  BEEN  SOLD  BY  THE TAXPAYER INVESTING IN SUCH
COMPANY; OR (III) THE TAXPAYER HAS WITHDRAWN THE  TAXPAYER'S  INVESTMENT
WHOLLY  OR  PARTIALLY  FROM THE QUALIFIED EMERGING TECHNOLOGY COMPANY OR
MEDICAL TECHNOLOGY COMPANY.
  3. THE NEW YORK CITY DEPARTMENT OF FINANCE SHALL ESTABLISH BY RULE  BY
OCTOBER  THIRTY-FIRST, TWO THOUSAND TWELVE PROCEDURES FOR THE ALLOCATION
OF TAX CREDITS AS REQUIRED BY PARAGRAPH TWO OF  THIS  SUBDIVISION.  SUCH
RULES  SHALL  INCLUDE PROVISIONS DESCRIBING THE APPLICATION PROCESS, THE
DUE DATES FOR SUCH APPLICATIONS, THE STANDARDS THAT  SHALL  BE  USED  TO
EVALUATE  THE  APPLICATIONS,  THE DOCUMENTATION THAT WILL BE PROVIDED TO
TAXPAYERS TO SUBSTANTIATE THE AMOUNT OF TAX CREDITS  ALLOCATED  TO  SUCH
TAXPAYERS,  AND  SUCH OTHER PROVISIONS AS DEEMED NECESSARY AND APPROPRI-
ATE.
  4. ANY LOCAL LAW ADOPTED PURSUANT TO THIS SUBDIVISION MAY PROVIDE  FOR
A  CREDIT  AS  AUTHORIZED  BY  THIS  SUBDIVISION  FOR A MAXIMUM OF THREE
CONSECUTIVE CALENDAR YEARS, PROVIDED, HOWEVER, THAT ANY SUCH CREDIT  MAY
NOT  APPLY TO TAXABLE YEARS BEGINNING BEFORE JANUARY FIRST, TWO THOUSAND
THIRTEEN OR BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND SIXTEEN.
  S 2. Section 1310 of the tax law is amended by adding a new subsection
(g) to read as follows:
  (G) ANGEL INVESTOR CREDIT. (1) NOTWITHSTANDING ANY OTHER PROVISION  OF
LAW  TO  THE  CONTRARY,  ANY  CITY HAVING A POPULATION OF ONE MILLION OR
MORE, ACTING THROUGH ITS LOCAL LEGISLATIVE BODY,  IS  HEREBY  AUTHORIZED
AND  EMPOWERED  TO ADOPT AND AMEND LOCAL LAWS GRANTING IN ANY SUCH CITY,
AN ANGEL INVESTOR CREDIT AGAINST THE TAXES AUTHORIZED IN THIS ARTICLE TO
AN ELIGIBLE TAXPAYER THAT: (A) IS AN ACCREDITED INVESTOR AS  DEFINED  IN
RULE  501  OF  REGULATION D OF THE SECURITIES EXCHANGE COMMISSION OF THE
UNITED STATES PURSUANT TO  THE  SECURITIES  EXCHANGE  ACT  OF  1933,  AS
AMENDED;  (B) MAKES A QUALIFIED INVESTMENT IN A QUALIFIED EMERGING TECH-
NOLOGY COMPANY, AS DEFINED IN PARAGRAPH  (C)  OF  SUBDIVISION  ONE    OF
SECTION  THIRTY-ONE  HUNDRED TWO-E OF THE PUBLIC AUTHORITIES LAW, EXCEPT
THAT SUCH COMPANY SHALL MEAN  A  COMPANY  LOCATED  IN  SUCH  CITY,  THAT
ENGAGES IN THE ACTIVITIES REFERENCED IN SUBPARAGRAPH FIVE OF PARAGRAPH B
OF  SUBDIVISION  ONE  OF  SECTION THIRTY-ONE HUNDRED TWO-E OF THE PUBLIC
AUTHORITIES LAW, OR MAKES A  QUALIFIED  INVESTMENT  IN  A  COMPANY  THAT

S. 7683                             4

ENGAGES  IN MEDICAL TECHNOLOGY, AS DEFINED IN PARTS 3345 AND 3394 OF THE
NORTH AMERICAN INDUSTRY CLASSIFICATION SYSTEM; (C) HAS NO MORE THAN  ONE
HUNDRED  FULL-TIME EMPLOYEES, OF WHICH AT LEAST SEVENTY-FIVE PERCENT ARE
EMPLOYED  IN SUCH CITY, HAS A RATIO OF RESEARCH AND DEVELOPMENT FUNDS TO
NET SALES, AS REFERRED TO IN SECTION THIRTY-ONE  HUNDRED  TWO-E  OF  THE
PUBLIC  AUTHORITIES  LAW, WHICH EQUALS OR EXCEEDS SIX PERCENT DURING ITS
TAXABLE YEAR, AND HAS GROSS REVENUES, ALONG WITH THE GROSS  REVENUES  OF
ITS AFFILIATES AND RELATED MEMBERS, NOT EXCEEDING TWENTY MILLION DOLLARS
FOR  THE  TAXABLE  YEAR  IMMEDIATELY  PRECEDING THE YEAR THE TAXPAYER IS
ALLOWED A CREDIT UNDER THIS SUBSECTION; AND (D)  OWNS  LESS  THAN  FIFTY
PERCENT OF THE QUALIFIED EMERGING TECHNOLOGY COMPANY OR MEDICAL TECHNOL-
OGY  COMPANY  AFTER  THEIR  QUALIFIED  INVESTMENT; PROVIDED, HOWEVER, NO
CREDIT AUTHORIZED BY THIS SUBSECTION FOR A QUALIFIED INVESTMENT SHALL BE
GRANTED TO A TAXPAYER IF SUCH TAXPAYER  IS  GRANTED  AN  ANGEL  INVESTOR
CREDIT  AGAINST  THE UNINCORPORATED BUSINESS TAX IMPOSED PURSUANT TO THE
AUTHORITY OF CHAPTER SEVEN HUNDRED SEVENTY-TWO OF THE LAWS  OF  NINETEEN
HUNDRED SIXTY-SIX FOR SUCH QUALIFIED INVESTMENT. THE AMOUNT OF THE CRED-
IT  SHALL  BE EQUAL TO THE SUM OF THE AMOUNTS SPECIFIED IN PARAGRAPH TWO
OF THIS SUBSECTION SUBJECT TO THE LIMITATIONS IN  PARAGRAPHS  THREE  AND
FOUR  OF  THIS SUBSECTION. FOR PURPOSES OF THIS SUBSECTION, A "QUALIFIED
INVESTMENT" SHALL MEAN THE CONTRIBUTION OF PROPERTY TO A CORPORATION  IN
EXCHANGE  FOR  ORIGINAL ISSUE CAPITAL STOCK OR OTHER OWNERSHIP INTEREST,
THE CONTRIBUTION OF PROPERTY TO A PARTNERSHIP IN EXCHANGE FOR AN  INTER-
EST IN THE PARTNERSHIP, AND SIMILAR CONTRIBUTIONS IN THE CASE OF A BUSI-
NESS  ENTITY  NOT  IN  CORPORATE  OR PARTNERSHIP FORM IN EXCHANGE FOR AN
OWNERSHIP INTEREST  IN  SUCH  ENTITY;  PROVIDED,  HOWEVER,  A  QUALIFIED
INVESTMENT  SHALL  NOT  INCLUDE  INVESTMENTS  MADE BY OR ON BEHALF OF AN
OWNER OF THE BUSINESS, INCLUDING, BUT NOT  LIMITED  TO,  A  STOCKHOLDER,
PARTNER OR SOLE PROPRIETOR, OR ANY RELATED PERSON, AS DEFINED IN SUBPAR-
AGRAPH  (C) OF PARAGRAPH THREE OF SUBSECTION (B) OF SECTION FOUR HUNDRED
SIXTY-FIVE OF THE INTERNAL REVENUE CODE. FOR PURPOSES OF THIS SUBSECTION
A "RELATED MEMBER" SHALL MEAN A PERSON, CORPORATION,  OR  OTHER  ENTITY,
INCLUDING   AN  ENTITY  THAT  IS  TREATED  AS  A  PARTNERSHIP  OR  OTHER
PASS-THROUGH VEHICLE FOR PURPOSES  OF  FEDERAL  TAXATION,  WHETHER  SUCH
PERSON,  CORPORATION  OR  ENTITY  IS  A  TAXPAYER OR NOT, WHERE ONE SUCH
PERSON, CORPORATION, OR ENTITY, OR SET OF RELATED PERSONS,  CORPORATIONS
OR  ENTITIES,  DIRECTLY  OR  INDIRECTLY  OWNS  OR CONTROLS A CONTROLLING
INTEREST IN ANOTHER ENTITY.   SUCH ENTITY OR ENTITIES  MAY  INCLUDE  ALL
TAXPAYERS UNDER ARTICLES NINE, NINE-A, THIRTEEN, TWENTY-TWO, THIRTY-TWO,
THIRTY-THREE  OR  THIRTY-THREE-A  OF  THIS CHAPTER. FOR PURPOSES OF THIS
SUBSECTION, "AFFILIATES" SHALL MEAN THOSE CORPORATIONS THAT ARE  MEMBERS
OF THE SAME AFFILIATED GROUP, AS DEFINED IN SECTION FIFTEEN HUNDRED FOUR
OF THE INTERNAL REVENUE CODE, AS THE TAXPAYER.
  (2)  (A) THE PERCENTAGE OF THE CREDIT ALLOWED TO A TAXPAYER UNDER THIS
SUBSECTION SHALL BE TWO  PERCENT  PER  EACH  QUALIFIED  INVESTMENT  MADE
DURING THE TAXABLE YEAR AND THE SUCCEEDING FOUR YEARS PROVIDED THE CRED-
IT IS PROPERLY CLAIMED PURSUANT TO THE RULES ESTABLISHED BY THE NEW YORK
CITY  DEPARTMENT  OF  FINANCE,  UP TO A MAXIMUM ALLOWED CREDIT OF TWENTY
THOUSAND DOLLARS PER TAXABLE YEAR. THE TOTAL AMOUNT OF CREDIT  ALLOWABLE
TO  A  TAXPAYER UNDER THIS SUBSECTION FOR ALL YEARS, TAKEN IN THE AGGRE-
GATE, SHALL NOT EXCEED ONE HUNDRED THOUSAND DOLLARS. IF THE TAXPAYER  IS
A PARTNER IN A PARTNERSHIP OR MEMBER IN AN UNINCORPORATED BUSINESS, THEN
THE  LIMIT  IMPOSED  BY  THE  PRECEDING SENTENCE SHALL BE APPLIED AT THE
ENTITY LEVEL, SO THAT THE AGGREGATE CREDIT ALLOWED TO ALL  THE  PARTNERS
IN  SUCH  PARTNERSHIP  OR MEMBERS IN SUCH UNINCORPORATED BUSINESS IN ANY
TAXABLE YEAR DOES NOT EXCEED TWENTY  THOUSAND  DOLLARS,  AND  THE  TOTAL

S. 7683                             5

AMOUNT  OF  CREDIT  ALLOWABLE TO ALL THE PARTNERS IN SUCH PARTNERSHIP OR
MEMBERS IN SUCH UNINCORPORATED BUSINESS FOR  ALL  YEARS,  TAKEN  IN  THE
AGGREGATE,  SHALL  NOT  EXCEED ONE HUNDRED THOUSAND DOLLARS.  THE CREDIT
ALLOWED  UNDER  THIS  SUBSECTION SHALL NOT BE ALLOWED TO A TAXPAYER WITH
RESPECT TO ANY CITY PERSONAL INCOME TAX IMPOSED UNDER THIS ARTICLE  PAID
FOR  ANY TAXABLE YEAR BEGINNING BEFORE JANUARY FIRST, TWO THOUSAND THIR-
TEEN.
  (B) IF, AT ANY TIME DURING THE FIVE YEAR PERIOD BEGINNING ON THE  DATE
THAT  THE QUALIFIED INVESTMENT IS MADE BY THE TAXPAYER THERE IS A RECAP-
TURE EVENT WITH RESPECT TO  SUCH  INVESTMENT,  THEN  THE  CITY  PERSONAL
INCOME  TAX  OWED  BY  SUCH  TAXPAYER FOR THE TAXABLE YEAR IN WHICH SUCH
EVENT OCCURS SHALL BE INCREASED BY  THE  CREDIT  RECAPTURE  AMOUNT.  FOR
PURPOSES  OF THIS SUBPARAGRAPH, THE CREDIT RECAPTURE AMOUNT IS AN AMOUNT
EQUAL TO THE SUM OF: (I) THE AGGREGATE DECREASE IN THE  CREDITS  ALLOWED
TO  THE TAXPAYER UNDER THIS SUBSECTION FOR ALL PRIOR TAXABLE YEARS WHICH
WOULD HAVE  RESULTED  IF  NO  CREDIT  HAD  BEEN  DETERMINED  UNDER  THIS
SUBSECTION WITH RESPECT TO SUCH QUALIFIED INVESTMENT, PLUS (II) INTEREST
AT  THE UNDERPAYMENT RATE ESTABLISHED BY THE NEW YORK CITY DEPARTMENT OF
FINANCE FOR EACH PRIOR TAXABLE YEAR FOR THE PERIOD BEGINNING ON THE  DUE
DATE  FOR  FILING  THE  RETURN  FOR THE PRIOR TAXABLE YEAR INVOLVED. FOR
PURPOSES OF THIS SUBPARAGRAPH, A "RECAPTURE EVENT" SHALL MEAN IF AT  THE
CLOSE  OF  ANY  TAXABLE  YEAR IN THE FIVE-YEAR PERIOD: (I) THE QUALIFIED
EMERGING TECHNOLOGY COMPANY OR  MEDICAL  TECHNOLOGY  COMPANY  NO  LONGER
QUALIFIES  AS A QUALIFIED EMERGING TECHNOLOGY COMPANY OR A MEDICAL TECH-
NOLOGY COMPANY; (II) THE QUALIFIED EMERGING TECHNOLOGY  COMPANY  OR  THE
MEDICAL  TECHNOLOGY  COMPANY  HAS BEEN SOLD BY THE TAXPAYER INVESTING IN
SUCH COMPANY; OR (III) THE TAXPAYER HAS WITHDRAWN THE TAXPAYER'S INVEST-
MENT WHOLLY OR PARTIALLY FROM THE QUALIFIED EMERGING TECHNOLOGY  COMPANY
OR THE MEDICAL TECHNOLOGY COMPANY.
  (3)  IN  THE CASE OF A RESIDENT TAXPAYER, THE CREDIT PROVIDED BY LOCAL
LAW ADOPTED PURSUANT TO THIS SUBSECTION SHALL  BE  ALLOWED  AGAINST  THE
TAXES  AUTHORIZED  BY  THIS  ARTICLE FOR THE TAXABLE YEAR REDUCED BY THE
CREDITS PERMITTED BY THIS ARTICLE. IF THE CREDIT EXCEEDS THE TAX  AS  SO
REDUCED,  THE  TAXPAYER  MAY  RECEIVE, AND THE COMPTROLLER, SUBJECT TO A
CERTIFICATE OF THE COMMISSIONER OF  THE  NEW  YORK  CITY  DEPARTMENT  OF
FINANCE,  SHALL  PAY  AS AN OVERPAYMENT, WITHOUT INTEREST, THE AMOUNT OF
SUCH EXCESS.
  (4) IF A TAXPAYER CHANGES STATUS DURING THE TAXABLE YEAR FROM RESIDENT
TO NONRESIDENT, OR FROM NONRESIDENT TO RESIDENT,  THE  CREDIT  SHALL  BE
PRORATED ACCORDING TO THE NUMBER OF MONTHS IN THE PERIOD OF RESIDENCE.
  (5)  SUBJECT  TO THE PROVISIONS OF PARAGRAPH THREE OF THIS SUBSECTION,
IN THE CASE OF A HUSBAND AND WIFE WHO FILE A JOINT RETURN, BUT  WHO  ARE
REQUIRED  TO  DETERMINE THEIR CITY PERSONAL INCOME TAXES SEPARATELY, THE
CREDIT AUTHORIZED PURSUANT TO THIS SUBSECTION MAY BE APPLIED AGAINST THE
TAX OF EITHER OR DIVIDED BETWEEN THEM AS THEY MAY ELECT. IN THE CASE  OF
A  HUSBAND  AND  WIFE WHO ARE NOT REQUIRED TO FILE A FEDERAL RETURN, THE
CREDIT UNDER THIS SUBSECTION SHALL BE ALLOWED  ONLY  IF  SUCH  TAXPAYERS
FILE A JOINT CITY PERSONAL INCOME TAX RETURN.
  (6) THE NEW YORK CITY DEPARTMENT OF FINANCE SHALL ESTABLISH BY RULE BY
OCTOBER  THIRTY-FIRST, TWO THOUSAND TWELVE PROCEDURES FOR THE ALLOCATION
OF TAX  CREDITS  AS  REQUIRED  BY  PARAGRAPHS  TWO  AND  THREE  OF  THIS
SUBSECTION.  SUCH RULES SHALL INCLUDE PROVISIONS DESCRIBING THE APPLICA-
TION PROCESS, THE DUE DATES FOR SUCH APPLICATIONS,  THE  STANDARDS  THAT
SHALL  BE USED TO EVALUATE THE APPLICATIONS, THE DOCUMENTATION THAT WILL
BE PROVIDED TO TAXPAYERS TO SUBSTANTIATE THE AMOUNT OF TAX CREDITS ALLO-

S. 7683                             6

CATED TO SUCH TAXPAYERS, AND SUCH OTHER PROVISIONS AS  DEEMED  NECESSARY
AND APPROPRIATE.
  (7)  ANY LOCAL LAW ADOPTED PURSUANT TO THIS SUBSECTION MAY PROVIDE FOR
A CREDIT AS AUTHORIZED BY THIS SUBSECTION FOR A MAXIMUM OF THREE CONSEC-
UTIVE CALENDAR YEARS, PROVIDED, HOWEVER, THAT ANY SUCH  CREDIT  MAY  NOT
APPLY TO TAXABLE YEARS BEGINNING JANUARY FIRST, TWO THOUSAND THIRTEEN OR
BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND SIXTEEN.
  S 3. The aggregate amount of tax credits allowed under this act in any
calendar  year  shall  be  up  to  three million dollars. Such aggregate
amount of credits shall be allocated by the New York city department  of
finance  among  taxpayers  in  order  of priority based upon the date of
filing an application for allocation of an angel  investor  credit  with
such department. If the total amount of allocated credits applied for in
any  particular year exceeds the aggregate amount of tax credits allowed
for such year, such excess shall be treated as having been  applied  for
on the first day of the subsequent year.
  S  4.  A  certified copy of the local law enacted pursuant to this act
shall be mailed by registered mail to the state department  of  taxation
and  finance  at  its office in Albany within fifteen days of its enact-
ment. However, the state department of taxation and  finance  may  allow
additional  time  for  such certified copy to be mailed if it deems such
action to be consistent with its duties under this act.
  S 5. This act shall take effect immediately.