S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   3077
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                             January 19, 2017
                                ___________
 
 Introduced  by  Sen.  PARKER -- 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 providing for direct private
   assistance to emerging technology companies  through  the  trading  of
   their  existing  but unused research and development credits and their
   existing but unused net operating loss deductions to  existing  corpo-
   rations and partnerships in return for private assistance
 
   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 "Small New York Based High-Technology Business Investment Tax Credit
 Act".
   §  2.  The  tax  law is amended by adding a new section 212 to read as
 follows:
   § 212. CORPORATION BUSINESS TAX BENEFIT CERTIFICATE TRANSFER  PROGRAM.
 1. (A) THE DEPARTMENT SHALL ESTABLISH A CORPORATION BUSINESS TAX BENEFIT
 CERTIFICATE TRANSFER PROGRAM TO ALLOW NEW OR EXPANDING EMERGING TECHNOL-
 OGY  AND  BIOTECHNOLOGY COMPANIES IN THIS STATE HAVING UNUSED AMOUNTS OF
 RESEARCH AND DEVELOPMENT TAX CREDITS  OTHERWISE  ALLOWABLE  PURSUANT  TO
 SUBPARAGRAPH  (I)  OF  PARAGRAPH  (B)  OF SUBDIVISION ONE OF SECTION TWO
 HUNDRED TEN-B OF THIS ARTICLE, WHICH CANNOT BE APPLIED FOR THE  CREDIT'S
 TAX  YEAR,  AND UNUSED NET OPERATING LOSS CARRYOVERS PURSUANT TO SECTION
 TWO HUNDRED EIGHT OF THIS ARTICLE TO SURRENDER THOSE  TAX  BENEFITS  FOR
 USE BY OTHER CORPORATIONS ESTABLISHED UNDER THE BUSINESS CORPORATION LAW
 AND  SUBJECT  TO  THE PROVISIONS OF THIS ARTICLE IN EXCHANGE FOR PRIVATE
 FINANCIAL ASSISTANCE TO BE PROVIDED THOSE TAXPAYERS OR EXPANDING  EMERG-
 ING  TECHNOLOGY  AND  BIOTECHNOLOGY  COMPANIES.  SUCH TAXPAYERS SHALL BE
 PROVIDED WITH A CORPORATION  BUSINESS  TAX  BENEFIT  CERTIFICATE  TO  BE
 DEVELOPED BY THE COMMISSIONER.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD05819-01-7
              

 S. 3077                             2
 
   (B) THE COMMISSIONER, IN COOPERATION WITH THE COMMISSIONER OF ECONOMIC
 DEVELOPMENT,  SHALL  REVIEW AND APPROVE APPLICATIONS BY NEW OR EXPANDING
 EMERGING TECHNOLOGY AND BIOTECHNOLOGY COMPANIES  IN  THIS  STATE  HAVING
 UNUSED  BUT  OTHERWISE  ALLOWABLE CARRYOVERS OF RESEARCH AND DEVELOPMENT
 TAX CREDITS AND OTHERWISE ALLOWABLE NET OPERATING LOSS CARRYOVERS PURSU-
 ANT  TO  SUBPARAGRAPH (I) OF PARAGRAPH (B) OF SUBDIVISION ONE OF SECTION
 TWO HUNDRED TEN-B OF THIS ARTICLE AND SECTION TWO HUNDRED EIGHT, RESPEC-
 TIVELY, TO SURRENDER THOSE TAX BENEFITS IN EXCHANGE FOR  PRIVATE  FINAN-
 CIAL  ASSISTANCE  TO  BE  MADE  TO A CORPORATION FILING PURSUANT TO THIS
 ARTICLE, WHICH HAS OBTAINED A CORPORATION BUSINESS TAX  BENEFIT  CERTIF-
 ICATE  IN AN AMOUNT EQUAL TO AT LEAST SEVENTY-FIVE PERCENT OF THE AMOUNT
 OF THE SURRENDERED TAX BENEFITS.
   (C) THE COMMISSIONER SHALL CALCULATE THE VALUE OF  THE  NET  OPERATING
 LOSS  CARRYOVER  FOR  PURPOSES  OF  THE BENEFIT CERTIFICATE EQUAL TO THE
 AMOUNT  OF  THE  CARRYOVER  TIMES  THE  APPLICABLE  BUSINESS  ALLOCATION
 PERCENTAGE  AND  TAX  RATE  OF  THE EMERGING TECHNOLOGY OR BIOTECHNOLOGY
 COMPANY.
   (D) THE COMMISSIONER, IN COOPERATION WITH THE COMMISSIONER OF ECONOMIC
 DEVELOPMENT, SHALL REVIEW AND APPROVE APPLICATIONS BY TAXPAYERS PURSUANT
 TO THE PROVISIONS OF THIS ARTICLE TO ACQUIRE  SURRENDERED  TAX  BENEFITS
 APPROVED  PURSUANT  TO PARAGRAPH (B) OF THIS SUBDIVISION, WHICH SHALL BE
 ISSUED IN THE FORM OF CORPORATION BUSINESS TAX BENEFIT TRANSFER  CERTIF-
 ICATES,  IN  EXCHANGE FOR PRIVATE FINANCIAL ASSISTANCE TO BE MADE BY THE
 TAXPAYER IN AN AMOUNT EQUAL TO AT  LEAST  SEVENTY-FIVE  PERCENT  OF  THE
 AMOUNT  OF  THE  SURRENDERED  TAX  BENEFIT  OF AN EMERGING TECHNOLOGY OR
 BIOTECHNOLOGY COMPANY IN THE STATE.  THE  PRIVATE  FINANCIAL  ASSISTANCE
 SHALL  ASSIST IN FUNDING EXPENSES INCURRED IN CONNECTION WITH THE OPERA-
 TION OF A NEW OR EXPANDING EMERGING TECHNOLOGY OR BIOTECHNOLOGY  COMPANY
 IN THE STATE, INCLUDING BUT NOT LIMITED TO THE EXPENSES OF FIXED ASSETS,
 SUCH AS THE CONSTRUCTION AND ACQUISITION AND DEVELOPMENT OF REAL ESTATE,
 MATERIALS,   START-UP,   TENANT   FIT-OUT,  WORKING  CAPITAL,  SALARIES,
 RESEARCH, AND DEVELOPMENT EXPENDITURES.
   (E) THE COMMISSIONER SHALL COORDINATE THE APPLICATIONS, IN CONJUNCTION
 WITH THE DEPARTMENT OF ECONOMIC DEVELOPMENT, FOR SURRENDER AND  ACQUISI-
 TION  OF  UNUSED  BUT  OTHERWISE ALLOWABLE TAX BENEFITS PURSUANT TO THIS
 SECTION IN A MANNER THAT CAN BEST STIMULATE AND ENCOURAGE THE  EXTENSION
 OF PRIVATE FINANCIAL ASSISTANCE TO NEW AND EXPANDING EMERGING TECHNOLOGY
 AND  BIOTECHNOLOGY COMPANIES IN THIS STATE INTO A WRITTEN AGREEMENT WITH
 SUCH COMPANY CONCERNING THE TERMS AND CONDITIONS OF THE  PRIVATE  FINAN-
 CIAL ASSISTANCE MADE IN EXCHANGE FOR THE CERTIFICATE. THE WRITTEN AGREE-
 MENT  MAY CONTAIN TERMS CONCERNING THE MAINTENANCE BY THE NEW OR EXPAND-
 ING EMERGING TECHNOLOGY OR BIOTECHNOLOGY COMPANY OF A HEADQUARTERS OR  A
 BASE OF OPERATION IN THIS STATE.
   2. (A) A TAXPAYER THAT HAS ACQUIRED A CORPORATION BUSINESS TAX BENEFIT
 CERTIFICATE PURSUANT TO THE PROVISIONS OF PARAGRAPH (B) OF THIS SUBDIVI-
 SION THAT INCLUDES THE RIGHT TO A NET OPERATING LOSS CARRYOVER DEDUCTION
 SHALL  ATTACH THAT CERTIFICATE TO ANY RETURN THE TAXPAYER IS REQUIRED TO
 FILE  AND  SHALL  OTHERWISE  APPLY  THE  NET  OPERATING  LOSS  CARRYOVER
 DEDUCTION AS EVIDENCED BY THE CERTIFICATE ACCORDING TO THE PROVISIONS OF
 PARAGRAPH  (B) OF SUBDIVISION ONE OF THIS SECTION AND ANY RULES OR REGU-
 LATIONS THE COMMISSIONER MAY ADOPT TO CARRY OUT THE PROVISIONS  OF  THIS
 SECTION.
   (B)  A  NEW  OR EXPANDING EMERGING TECHNOLOGY OR BIOTECHNOLOGY COMPANY
 THAT HAS SURRENDERED AN UNUSED NET OPERATING LOSS CARRYOVER PURSUANT  TO
 THE PROVISIONS OF SECTION TWO HUNDRED EIGHT OF THIS ARTICLE SHALL NOT BE
 ALLOWED A NET OPERATING LOSS CARRYOVER DEDUCTION BASED UPON THE RIGHT TO

 S. 3077                             3

 SUCH  A DEDUCTION, AS EVIDENCED BY SUCH CORPORATION BUSINESS TAX BENEFIT
 CERTIFICATE, AND SHALL ATTACH A COPY OF THE CERTIFICATE  TO  ANY  RETURN
 THE TAXPAYER IS REQUIRED TO FILE.
   3. (A) A TAXPAYER THAT HAS ACQUIRED A CORPORATION BUSINESS TAX BENEFIT
 CERTIFICATE  PURSUANT  TO  SUBDIVISION ONE OF THIS SECTION THAT INCLUDES
 THE RIGHT TO A RESEARCH AND DEVELOPMENT TAX CREDIT CARRYOVER PURSUANT TO
 SUBPARAGRAPH (I) OF PARAGRAPH (B) OF  SUBDIVISION  ONE  OF  SECTION  TWO
 HUNDRED  TEN-B  OF  THIS  ARTICLE  SHALL  ATTACH THAT CERTIFICATE TO ANY
 RETURN THE TAXPAYER IS REQUIRED TO FILE AND SHALL  OTHERWISE  APPLY  THE
 CREDIT  CARRYOVER,  AS  EVIDENCED  BY  THE CERTIFICATE, ACCORDING TO THE
 PROVISIONS OF PARAGRAPH (B) OF SUBDIVISION ONE OF THIS SECTION  AND  ANY
 RULES  OR  REGULATIONS  THE  COMMISSIONER  MAY  ADOPT  TO  CARRY OUT THE
 PROVISIONS OF THIS SECTION.
   (B) A NEW OR EXPANDING TECHNOLOGY OR BIOTECHNOLOGY  COMPANY  THAT  HAS
 SURRENDERED  AN  UNUSED  RESEARCH  AND  DEVELOPMENT TAX CREDIT CARRYOVER
 SHALL NOT BE ALLOWED A RESEARCH AND  DEVELOPMENT  TAX  CREDIT  CARRYOVER
 BASED  UPON  THE  RIGHT  TO SUCH A CREDIT CARRYOVER, AS EVIDENCED BY THE
 CORPORATION BUSINESS TAX BENEFIT CERTIFICATE, AND SHALL ATTACH A COPY OF
 THE CERTIFICATE TO ANY RETURN THE TAXPAYER IS REQUIRED TO FILE.
   4. FOR THE PURPOSES OF THIS SECTION,  THE  FOLLOWING  TERMS  HAVE  THE
 FOLLOWING MEANINGS:
   (A)  "ADVANCED COMPUTING" MEANS A TECHNOLOGY USED IN THE DESIGNING AND
 DEVELOPING OF COMPUTING HARDWARE AND SOFTWARE, INCLUDING INNOVATIONS  IN
 DESIGNING  THE  FULL  SPECTRUM OF HARDWARE FROM HAND-HELD CALCULATORS TO
 SUPER COMPUTERS, AND PERIPHERAL EQUIPMENT.
   (B) "ADVANCED MATERIALS" MEANS MATERIALS  WITH  ENGINEERED  PROPERTIES
 CREATED  THROUGH THE DEVELOPMENT OF SPECIALIZED PROCESSING AND SYNTHESIS
 TECHNOLOGY, INCLUDING  CERAMICS,  HIGH  VALUE-ADDED  METALS,  ELECTRONIC
 MATERIALS, COMPOSITES, POLYMERS, AND BIOMATERIALS.
   (C)  "BIOTECHNOLOGY" MEANS THE CONTINUALLY EXPANDING BODY OF FUNDAMEN-
 TAL KNOWLEDGE ABOUT THE FUNCTION OF BIOLOGICAL SYSTEMS  FROM  THE  MACRO
 LEVEL  TO THE MOLECULAR AND SUBATOMIC LEVELS, AS WELL AS NOVEL PRODUCTS,
 SERVICES, TECHNOLOGIES, AND SUB-TECHNOLOGIES DEVELOPED AS  A  RESULT  OF
 INSIGHTS  GAINED FROM RESEARCH ADVANCES WHICH ADD TO THAT BODY OF FUNDA-
 MENTAL KNOWLEDGE.
   (D) "CONTROL", WITH RESPECT TO A CORPORATION, MEANS OWNERSHIP, DIRECT-
 LY OR INDIRECTLY, OF STOCK POSSESSING EIGHTY  PERCENT  OR  MORE  OF  THE
 TOTAL  COMBINED  VOTING  POWER OF ALL CLASSES OF THE STOCK OF THE CORPO-
 RATION ENTITLED TO VOTE; AND "CONTROL", WITH RESPECT TO A  TRUST,  MEANS
 OWNERSHIP,  DIRECTLY  OR  INDIRECTLY,  OF  EIGHTY PERCENT OR MORE OF THE
 BENEFICIAL INTEREST IN THE PRINCIPAL OR INCOME OF THE TRUST. THE  OWNER-
 SHIP  OF  STOCK  IN A CORPORATION, OF A CAPITAL OR PROFITS INTEREST IN A
 PARTNERSHIP OR ASSOCIATION, OR OF A BENEFICIAL INTEREST IN A TRUST SHALL
 BE DETERMINED IN ACCORDANCE WITH THE RULES FOR CONSTRUCTIVE OWNERSHIP OF
 STOCK PROVIDED IN SUBSECTION (C) OF SECTION 267 OF THE FEDERAL  INTERNAL
 REVENUE  CODE  OF  1986,  26  U.S.C.  §267,  OTHER THAN PARAGRAPH (3) OF
 SUBSECTION (C) OF SUCH SECTION.
   (E) "CONTROLLED GROUP"  MEANS  ONE  OR  MORE  CHAINS  OF  CORPORATIONS
 CONNECTED  THROUGH  STOCK  OWNERSHIP WITH A COMMON PARENT CORPORATION IF
 STOCK POSSESSING AT LEAST EIGHTY PERCENT OF  THE  VOTING  POWER  OF  ALL
 CLASSES  OF STOCK OF EACH OF THE CORPORATIONS IS OWNED DIRECTLY OR INDI-
 RECTLY BY ONE OR MORE OF THE CORPORATIONS AND  THE  COMMON  PARENT  OWNS
 DIRECTLY STOCK POSSESSING AT LEAST EIGHTY PERCENT OF THE VOTING POWER OF
 ALL CLASSES OF STOCK OF AT LEAST ONE OF THE OTHER CORPORATIONS.
   (F) "ELECTRONIC DEVICE TECHNOLOGY" MEANS A TECHNOLOGY INVOLVING MICRO-
 ELECTRONICS,  SEMICONDUCTORS, ELECTRONIC EQUIPMENT, AND INSTRUMENTATION,

 S. 3077                             4
 
 RADIO FREQUENCY, MICROWAVE, AND MILLIMETER ELECTRONICS, AND OPTICAL  AND
 OPTIC-ELECTRICAL DEVICES, OR DATA AND DIGITAL COMMUNICATIONS AND IMAGING
 DEVICES.
   (G)  "ENVIRONMENTAL  TECHNOLOGY"  MEANS  ASSESSMENT  AND PREVENTION OF
 THREATS OR DAMAGE TO HUMAN  HEALTH  OR  THE  ENVIRONMENT,  ENVIRONMENTAL
 CLEANUP, OR THE DEVELOPMENT OF ALTERNATIVE ENERGY SOURCES.
   (H)  "MEDICAL  DEVICE  TECHNOLOGY"  MEANS  A  TECHNOLOGY INVOLVING ANY
 MEDICAL EQUIPMENT OR PRODUCT (OTHER THAN A PHARMACEUTICAL PRODUCT)  THAT
 HAS  THERAPEUTIC  VALUE,  DIAGNOSTIC VALUE, OR BOTH, AND IS REGULATED BY
 THE FEDERAL FOOD AND DRUG ADMINISTRATION.
   (I) "PARTNERSHIP" MEANS A SYNDICATE, GROUP, POOL,  JOINT  VENTURE,  OR
 OTHER UNINCORPORATED ORGANIZATION THROUGH OR BY MEANS OF WHICH ANY BUSI-
 NESS,  FINANCIAL OPERATION, OR VENTURE IS CARRIED ON, AND WHICH IS NOT A
 TRUST OR ESTATE, A CORPORATION, OR A SOLE PROPRIETORSHIP.
   (J) "PILOT SCALE MANUFACTURING" MEANS DESIGN, CONSTRUCTION, AND  TEST-
 ING  OF  PREPRODUCTION  PROTOTYPES  AND MODELS IN THE FIELDS OF ADVANCED
 COMPUTING, ADVANCED MATERIALS, BIOTECHNOLOGY, ELECTRONIC DEVICE TECHNOL-
 OGY, ENVIRONMENTAL TECHNOLOGY, AND MEDICAL DEVICE TECHNOLOGY, OTHER THAN
 FOR COMMERCIAL SALE, EXCLUDING SALES OF PROTOTYPES OR SALES  FOR  MARKET
 TESTING,  IF  TOTAL  GROSS  RECEIPTS  FROM  SUCH  SALES  OF THE PRODUCT,
 SERVICE, OR PROCESS DO NOT EXCEED ONE MILLION DOLLARS.
   (K) "QUALIFIED INVESTMENT" MEANS THE NON-REFUNDABLE INVESTMENT AT RISK
 IN A SMALL NEW YORK-BASED HIGH TECHNOLOGY BUSINESS BY A TAXPAYER THAT IS
 NOT A RELATED PERSON OF THE SMALL NEW YORK BASED  HIGH-TECHNOLOGY  BUSI-
 NESS,  THE  TRANSFER  OF  WHICH  IS  IN CONNECTION WITH A TRANSACTION IN
 EXCHANGE FOR STOCK, INTEREST IN PARTNERSHIPS OR JOINT VENTURES, LICENSES
 (EXCLUSIVE OR NON-EXCLUSIVE), RIGHT TO USE TECHNOLOGY, MARKETING RIGHTS,
 WARRANTS, OPTIONS, OR ANY ITEM SIMILAR TO THOSE INCLUDED IN  THIS  PARA-
 GRAPH,  INCLUDING BUT NOT LIMITED TO OPTIONS OR RIGHTS TO ACQUIRE ANY OF
 THE ITEMS INCLUDED IN THIS PARAGRAPH.
   (L) "QUALIFIED RESEARCH EXPENSES" MEANS QUALIFIED  RESEARCH  EXPENSES,
 AS  DEFINED  IN SECTION 41 OF THE FEDERAL INTERNAL REVENUE CODE OF 1986,
 26 U.S.C. § 41, AS IN EFFECT ON JUNE THIRTIETH, NINETEEN  HUNDRED  NINE-
 TY-TWO,  IN  THE  FIELDS  OF  ENVIRONMENTAL TECHNOLOGY OR MEDICAL DEVICE
 TECHNOLOGY.
   (M) "RELATED PERSON" MEANS:
   (1) A CORPORATION, PARTNERSHIP, ASSOCIATION, OR TRUST BY THE TAXPAYER;
   (2) AN INDIVIDUAL, CORPORATION,  PARTNERSHIP,  ASSOCIATION,  OR  TRUST
 THAT IS IN THE CONTROL OF THE TAXPAYER;
   (3) A CORPORATION, PARTNERSHIP, ASSOCIATION, OR TRUST CONTROLLED BY AN
 INDIVIDUAL,  CORPORATION,  PARTNERSHIP, ASSOCIATION, OR TRUST THAT IS IN
 THE CONTROL OF THE TAXPAYER; OR
   (4) A MEMBER OF THE SAME CONTROLLED GROUP AS A TAXPAYER.
   (N) "SMALL NEW YORK BASED HIGH-TECHNOLOGY  BUSINESS"  MEANS  A  CORPO-
 RATION  DOING BUSINESS EMPLOYING OR OWNING CAPITAL OR PROPERTY, OR MAIN-
 TAINING AN OFFICE, IN THIS STATE THAT HAS  QUALIFIED  RESEARCH  EXPENSES
 PAID  OR INCURRED FOR RESEARCH CONDUCTED IN THIS STATE OR CONDUCTS PILOT
 SCALE MANUFACTURING IN THIS STATE, AND HAS FEWER THAN TWO HUNDRED  TWEN-
 TY-FIVE  EMPLOYEES,  OF  WHOM  SEVENTY-FIVE  PERCENT  ARE NEW YORK-BASED
 EMPLOYEES FILLING A POSITION OR JOB IN THIS STATE.
   (O) "TAX YEAR" MEANS THE FISCAL  OR  CALENDAR  ACCOUNTING  YEAR  OF  A
 TAXPAYER.
   §  3.  The tax law is amended by adding a new section 606-a to read as
 follows:
   § 606-A. NONCORPORATION TAX BENEFIT CERTIFICATE TRANSFER PROGRAM.  (A)
 (1)  THE  DEPARTMENT  SHALL ESTABLISH A CORPORATION BUSINESS TAX BENEFIT

 S. 3077                             5
 
 CERTIFICATE TRANSFER PROGRAM TO ALLOW NEW OR EXPANDING EMERGING TECHNOL-
 OGY AND BIOTECHNOLOGY COMPANIES IN THIS STATE HAVING UNUSED  AMOUNTS  OF
 RESEARCH  AND  DEVELOPMENT  TAX  CREDITS OTHERWISE ALLOWABLE PURSUANT TO
 SUBPARAGRAPH  (A)  OF  PARAGRAPH  TWO  OF  SUBSECTION (A) OF SECTION SIX
 HUNDRED SIX OF THIS ARTICLE, WHICH CANNOT BE APPLIED  FOR  THE  CREDIT'S
 TAX YEAR, AND UNUSED NET OPERATING LOSS CARRYOVER PURSUANT TO SUBSECTION
 (B)  OF  SECTION SIX HUNDRED SEVENTEEN AND SUBSECTION (B) OF SECTION SIX
 HUNDRED THIRTY-THREE OF THIS ARTICLE TO SURRENDER SUCH TAX BENEFITS  FOR
 USE  BY  OTHER  ENTITIES  SUBJECT  TO  THE PROVISIONS OF THIS ARTICLE IN
 EXCHANGE FOR PRIVATE FINANCIAL ASSISTANCE TO BE PROVIDED SUCH  TAXPAYERS
 OR  EXPANDING  EMERGING  TECHNOLOGY  AND  BIOTECHNOLOGY  COMPANIES. SUCH
 TAXPAYERS SHALL BE PROVIDED WITH A NONCORPORATION BUSINESS  TAX  BENEFIT
 CERTIFICATE TO BE DEVELOPED BY THE COMMISSIONER.
   (2)  THE  COMMISSIONER,  IN  COOPERATION  WITH THE COMMISSIONER OF THE
 DEPARTMENT OF ECONOMIC DEVELOPMENT, SHALL REVIEW  AND  APPROVE  APPLICA-
 TIONS BY NEW OR EXPANDING TECHNOLOGY AND BIOTECHNOLOGY COMPANIES IN THIS
 STATE  HAVING  UNUSED  BUT OTHERWISE ALLOWABLE CARRYOVER OF RESEARCH AND
 DEVELOPMENT TAX CREDITS  AND  OTHERWISE  ALLOWABLE  NET  OPERATING  LOSS
 CARRYOVERS  PURSUANT  TO  EITHER  SUBPARAGRAPH  (A)  OF PARAGRAPH TWO OF
 SUBSECTION (A) OF SECTION SIX HUNDRED SIX OR SUBSECTION (B)  OF  SECTION
 SIX  HUNDRED  SEVENTEEN OR SUBSECTION (B) OF SECTION SIX HUNDRED THIRTY-
 THREE OF THIS ARTICLE, RESPECTIVELY, TO SURRENDER THOSE TAX BENEFITS  IN
 EXCHANGE  FOR  PRIVATE  FINANCIAL  ASSISTANCE  TO  BE MADE TO A TAXPAYER
 FILING PURSUANT TO THIS ARTICLE WHO HAS OBTAINED A NONCORPORATION  BUSI-
 NESS TAX BENEFIT CERTIFICATE IN AN AMOUNT EQUAL TO AT LEAST SEVENTY-FIVE
 PERCENT OF THE AMOUNT OF THE SURRENDERED TAX BENEFITS.
   (3)  THE  COMMISSIONER  SHALL CALCULATE THE VALUE OF THE NET OPERATING
 LOSS CARRYOVER FOR PURPOSES OF THE  BENEFIT  CERTIFICATE  EQUAL  TO  THE
 AMOUNT  OF  THE  CARRYOVER  TIMES  THE  APPLICABLE  BUSINESS  ALLOCATION
 PERCENTAGE AND TAX RATE OF  THE  EMERGING  TECHNOLOGY  OR  BIOTECHNOLOGY
 COMPANY.
   (4)  THE  COMMISSIONER,  IN  COOPERATION  WITH THE COMMISSIONER OF THE
 DEPARTMENT OF ECONOMIC DEVELOPMENT, SHALL REVIEW  AND  APPROVE  APPLICA-
 TIONS  BY TAXPAYERS SUBJECT TO THE PROVISIONS OF THIS ARTICLE TO ACQUIRE
 SURRENDERED TAX BENEFITS APPROVED PURSUANT  TO  PARAGRAPH  TWO  OF  THIS
 SUBSECTION, WHICH SHALL BE ISSUED IN THE FORM OF NONCORPORATION BUSINESS
 TAX  BENEFIT  TRANSFER  CERTIFICATES,  IN EXCHANGE FOR PRIVATE FINANCIAL
 ASSISTANCE TO BE MADE BY THE TAXPAYER IN AN AMOUNT  EQUAL  TO  AT  LEAST
 SEVENTY-FIVE  PERCENT OF THE AMOUNT OF THE SURRENDERED TAX BENEFIT OF AN
 EMERGING TECHNOLOGY OR BIOTECHNOLOGY COMPANY IN THE STATE.  THE  PRIVATE
 FINANCIAL  ASSISTANCE  SHALL  ASSIST  IN  FUNDING  EXPENSES  INCURRED IN
 CONNECTION WITH THE OPERATION OF A NEW OR EXPANDING EMERGING  TECHNOLOGY
 OR  BIOTECHNOLOGY COMPANY IN THE STATE, INCLUDING BUT NOT LIMITED TO THE
 EXPENSES OF FIXED ASSETS, SUCH AS THE CONSTRUCTION AND  ACQUISITION  AND
 DEVELOPMENT OF REAL ESTATE, MATERIALS, START-UP, TENANT FIT-OUT, WORKING
 CAPITAL, SALARIES, RESEARCH, AND DEVELOPMENT EXPENDITURES.
   (5) THE COMMISSIONER SHALL COORDINATE THE APPLICATIONS, IN CONJUNCTION
 WITH  THE DEPARTMENT OF ECONOMIC DEVELOPMENT, FOR SURRENDER AND ACQUISI-
 TION OF UNUSED BUT OTHERWISE ALLOWABLE TAX  BENEFITS  PURSUANT  TO  THIS
 SECTION  IN A MANNER THAT CAN BEST STIMULATE AND ENCOURAGE THE EXTENSION
 OF PRIVATE FINANCIAL ASSISTANCE TO NEW AND EXPANDING EMERGING TECHNOLOGY
 AND BIOTECHNOLOGY COMPANIES IN THIS STATE INTO A WRITTEN AGREEMENT  WITH
 SUCH  COMPANY  CONCERNING THE TERMS AND CONDITIONS OF THE PRIVATE FINAN-
 CIAL ASSISTANCE MADE IN EXCHANGE FOR THE CERTIFICATE. THE WRITTEN AGREE-
 MENT MAY CONTAIN TERMS CONCERNING THE MAINTENANCE BY THE NEW OR  EXPAND-

 S. 3077                             6
 
 ING  EMERGING TECHNOLOGY OR BIOTECHNOLOGY COMPANY OF A HEADQUARTERS OR A
 BASE OF OPERATION IN THIS STATE.
   (B)(1)  A  TAXPAYER  THAT  HAS  ACQUIRED A NONCORPORATION BUSINESS TAX
 BENEFIT CERTIFICATE PURSUANT TO  THE  PROVISIONS  OF  PARAGRAPH  TWO  OF
 SUBSECTION  (A) OF THIS SECTION THAT INCLUDES THE RIGHT TO A NET OPERAT-
 ING LOSS CARRYOVER DEDUCTION SHALL ATTACH THAT CERTIFICATE TO ANY RETURN
 THE TAXPAYER IS REQUIRED TO FILE AND SHALL OTHERWISE APPLY THE NET OPER-
 ATING LOSS CARRYOVER DEDUCTION, AS EVIDENCED BY THE CERTIFICATE, ACCORD-
 ING TO THE PROVISIONS OF PARAGRAPH TWO OF SUBSECTION (A) OF THIS SECTION
 AND ANY RULES OR REGULATIONS THE COMMISSIONER MAY ADOPT TO CARRY OUT THE
 PROVISIONS OF THIS SECTION.
   (2) A NEW OR EXPANDING EMERGING TECHNOLOGY  OR  BIOTECHNOLOGY  COMPANY
 THAT  HAS SURRENDERED AN UNUSED NET OPERATING LOSS CARRYOVER PURSUANT TO
 THE PROVISIONS OF SUBSECTION (B) OF SECTION SIX  HUNDRED  SEVENTEEN  AND
 SUBSECTION (B) OF SECTION SIX HUNDRED THIRTY-THREE OF THIS ARTICLE SHALL
 NOT  BE  ALLOWED A NET OPERATING LOSS CARRYOVER DEDUCTION BASED UPON THE
 RIGHT TO SUCH A DEDUCTION, AS EVIDENCED BY SUCH NONCORPORATION  BUSINESS
 TAX  BENEFIT  CERTIFICATE, AND SHALL ATTACH A COPY OF THE CERTIFICATE TO
 ANY RETURN THE TAXPAYER IS REQUIRED TO FILE.
   (C) (1) A TAXPAYER THAT HAS ACQUIRED  A  NONCORPORATION  BUSINESS  TAX
 BENEFIT  CERTIFICATE  PURSUANT  TO  SUBSECTION  (A) OF THIS SECTION THAT
 INCLUDES THE RIGHT TO A RESEARCH AND DEVELOPMENT  TAX  CREDIT  CARRYOVER
 SHALL  ATTACH THAT CERTIFICATE TO ANY RETURN THE TAXPAYER IS REQUIRED TO
 FILE AND SHALL OTHERWISE APPLY THE CREDIT CARRYOVER, AS EVIDENCED BY THE
 CERTIFICATE, ACCORDING TO THE PROVISIONS OF PARAGRAPH TWO OF  SUBSECTION
 (A)  OF  THIS  SECTION AND ANY RULES OR REGULATIONS THE COMMISSIONER MAY
 ADOPT TO CARRY OUT THE PROVISIONS OF THIS SECTION.
   (2) A NEW OR EXPANDING EMERGING TECHNOLOGY  OR  BIOTECHNOLOGY  COMPANY
 THAT  HAS  SURRENDERED  AN  UNUSED  RESEARCH  AND DEVELOPMENT TAX CREDIT
 CARRYOVER SHALL NOT BE ALLOWED A RESEARCH  AND  DEVELOPMENT  TAX  CREDIT
 CARRYOVER  BASED UPON THE RIGHT TO SUCH A CREDIT CARRYOVER, AS EVIDENCED
 BY THE NONCORPORATION BUSINESS TAX BENEFIT CERTIFICATE, AND SHALL ATTACH
 A COPY OF THE CERTIFICATE TO ANY RETURN  THE  TAXPAYER  IS  REQUIRED  TO
 FILE.
   (D)  FOR  THE PURPOSES OF THIS SECTION, THE FOLLOWING TERMS SHALL HAVE
 THE FOLLOWING MEANINGS:
   (1) "ADVANCED COMPUTING" MEANS A  TECHNOLOGY  USED  IN  DESIGNING  AND
 DEVELOPING  COMPUTING  HARDWARE  AND  SOFTWARE, INCLUDING INNOVATIONS IN
 DESIGNING THE FULL SPECTRUM OF HARDWARE FROM  HAND-HELD  CALCULATORS  TO
 SUPER COMPUTERS, AND PERIPHERAL EQUIPMENT.
   (2)  "ADVANCED  MATERIALS"  MEANS MATERIALS WITH ENGINEERED PROPERTIES
 CREATED THROUGH THE DEVELOPMENT OF SPECIALIZED PROCESSING AND  SYNTHESIS
 TECHNOLOGY,  INCLUDING  CERAMICS,  HIGH  VALUE-ADDED  METALS, ELECTRONIC
 MATERIALS, COMPOSITES, POLYMERS, AND BIOMATERIALS.
   (3) "BIOTECHNOLOGY" MEANS THE CONTINUALLY EXPANDING BODY OF  FUNDAMEN-
 TAL  KNOWLEDGE  ABOUT  THE FUNCTION OF BIOLOGICAL SYSTEMS FROM THE MACRO
 LEVEL TO THE MOLECULAR AND SUBATOMIC LEVELS, AS WELL AS NOVEL  PRODUCTS,
 SERVICES,  TECHNOLOGIES,  AND  SUB-TECHNOLOGIES DEVELOPED AS A RESULT OF
 INSIGHTS GAINED FROM RESEARCH ADVANCES WHICH ADD TO THAT BODY OF  FUNDA-
 MENTAL KNOWLEDGE.
   (4) "CONTROL", WITH RESPECT TO A CORPORATION, MEANS OWNERSHIP, DIRECT-
 LY  OR  INDIRECTLY,  OF  STOCK  POSSESSING EIGHTY PERCENT OR MORE OF THE
 TOTAL COMBINED VOTING POWER OF ALL CLASSES OF THE STOCK  OF  THE  CORPO-
 RATION  ENTITLED  TO VOTE; AND "CONTROL", WITH RESPECT TO A TRUST, MEANS
 OWNERSHIP, DIRECTLY OR INDIRECTLY, OF EIGHTY  PERCENT  OR  MORE  OF  THE
 BENEFICIAL  INTEREST IN THE PRINCIPAL OR INCOME OF THE TRUST. THE OWNER-

 S. 3077                             7

 SHIP OF STOCK IN A CORPORATION, OF A CAPITAL OR PROFITS  INTEREST  IN  A
 PARTNERSHIP OR ASSOCIATION, OR OF A BENEFICIAL INTEREST IN A TRUST SHALL
 BE DETERMINED IN ACCORDANCE WITH THE RULES FOR CONSTRUCTIVE OWNERSHIP OF
 STOCK  PROVIDED IN SUBSECTION (C) OF SECTION 267 OF THE FEDERAL INTERNAL
 REVENUE CODE OF 1986, 26 U.S.C. §  267,  OTHER  THAN  PARAGRAPH  (3)  OF
 SUBSECTION (C) OF SUCH SECTION.
   (5)  "CONTROLLED  GROUP"  MEANS  ONE  OR  MORE  CHAINS OF CORPORATIONS
 CONNECTED THROUGH STOCK OWNERSHIP WITH A COMMON  PARENT  CORPORATION  IF
 STOCK  POSSESSING  AT  LEAST  EIGHTY  PERCENT OF THE VOTING POWER OF ALL
 CLASSES OF STOCK OF EACH OF THE CORPORATIONS IS OWNED DIRECTLY OR  INDI-
 RECTLY  BY  ONE  OR  MORE OF THE CORPORATIONS AND THE COMMON PARENT OWNS
 DIRECTLY STOCK POSSESSING AT LEAST EIGHTY PERCENT OF THE VOTING POWER OF
 ALL CLASSES OF STOCK OF AT LEAST ONE OF THE OTHER CORPORATIONS.
   (6) "ELECTRONIC DEVICE TECHNOLOGY" MEANS A TECHNOLOGY INVOLVING MICRO-
 ELECTRONICS, SEMICONDUCTORS, ELECTRONIC EQUIPMENT, AND  INSTRUMENTATION,
 RADIO  FREQUENCY, MICROWAVE, AND MILLIMETER ELECTRONICS, AND OPTICAL AND
 OPTIC-ELECTRICAL DEVICES, OR DATA AND DIGITAL COMMUNICATIONS AND IMAGING
 DEVICES.
   (7) "ENVIRONMENTAL TECHNOLOGY"  MEANS  ASSESSMENT  AND  PREVENTION  OF
 THREATS  OR  DAMAGE  TO  HUMAN  HEALTH OR THE ENVIRONMENT, ENVIRONMENTAL
 CLEANUP, OR THE DEVELOPMENT OF ALTERNATIVE ENERGY SOURCES.
   (8) "MEDICAL DEVICE  TECHNOLOGY"  MEANS  A  TECHNOLOGY  INVOLVING  ANY
 MEDICAL  EQUIPMENT OR PRODUCT (OTHER THAN A PHARMACEUTICAL PRODUCT) THAT
 HAS THERAPEUTIC VALUE, DIAGNOSTIC VALUE, OR BOTH, AND  IS  REGULATED  BY
 THE FEDERAL FOOD AND DRUG ADMINISTRATION.
   (9)  "PARTNERSHIP"  MEANS  A  SYNDICATE, GROUP, POOL, JOINT VENTURE OR
 OTHER UNINCORPORATED ORGANIZATION THROUGH OR BY MEANS OF WHICH ANY BUSI-
 NESS, FINANCIAL OPERATION, OR VENTURE IS CARRIED ON, AND WHICH IS NOT  A
 TRUST OR ESTATE, A CORPORATION, OR A SOLE PROPRIETORSHIP.
   (10) "PILOT SCALE MANUFACTURING" MEANS DESIGN, CONSTRUCTION, AND TEST-
 ING  OF  PREPRODUCTION  PROTOTYPES  AND MODELS IN THE FIELDS OF ADVANCED
 COMPUTING, ADVANCED MATERIALS, BIOTECHNOLOGY, ELECTRONIC DEVICE TECHNOL-
 OGY, ENVIRONMENTAL TECHNOLOGY, AND MEDICAL DEVICE TECHNOLOGY, OTHER THAN
 FOR COMMERCIAL SALE, EXCLUDING SALES OF PROTOTYPES OR SALES  FOR  MARKET
 TESTING,  IF  TOTAL  GROSS  RECEIPTS  FROM  SUCH  SALES  OF THE PRODUCT,
 SERVICE, OR PROCESS DO NOT EXCEED ONE MILLION DOLLARS.
   (11) "QUALIFIED INVESTMENT" MEANS  THE  NON-REFUNDABLE  INVESTMENT  AT
 RISK  IN  A  SMALL NEW YORK-BASED HIGH TECHNOLOGY BUSINESS BY A TAXPAYER
 THAT IS NOT A RELATED PERSON OF THE SMALL NEW YORK BASED HIGH-TECHNOLOGY
 BUSINESS, THE TRANSFER OF WHICH IS IN CONNECTION WITH A  TRANSACTION  IN
 EXCHANGE FOR STOCK, INTEREST IN PARTNERSHIPS OR JOINT VENTURES, LICENSES
 (EXCLUSIVE  OR  NON-EXCLUSIVE),  RIGHTS  TO  USE  TECHNOLOGY,  MARKETING
 RIGHTS, WARRANTS, OPTIONS, OR RIGHTS TO ACQUIRE ANY OF THE ITEMS SIMILAR
 TO THOSE INCLUDED IN  THIS  PARAGRAPH,  INCLUDING  BUT  NOT  LIMITED  TO
 OPTIONS  OR  RIGHTS  TO  ACQUIRE ANY OF THE ITEMS INCLUDED IN THIS PARA-
 GRAPH.
   (12) "QUALIFIED RESEARCH EXPENSES" MEANS QUALIFIED RESEARCH  EXPENSES,
 AS  DEFINED  IN SECTION 41 OF THE FEDERAL INTERNAL REVENUE CODE OF 1986,
 26 U.S.C. § 41, AS IN EFFECT ON JUNE THIRTIETH, NINETEEN  HUNDRED  NINE-
 TY-TWO,  IN  THE  FIELDS  OF  ENVIRONMENTAL TECHNOLOGY OR MEDICAL DEVICE
 TECHNOLOGY.
   (13) "RELATED PERSON" MEANS:
   (A) A CORPORATION, PARTNERSHIP, ASSOCIATION, OR TRUST BY THE TAXPAYER;
   (B) AN INDIVIDUAL, CORPORATION,  PARTNERSHIP,  ASSOCIATION,  OR  TRUST
 THAT IS IN THE CONTROL OF THE TAXPAYER;

 S. 3077                             8
 
   (C) A CORPORATION, PARTNERSHIP, ASSOCIATION, OR TRUST CONTROLLED BY AN
 INDIVIDUAL,  CORPORATION,  PARTNERSHIP, ASSOCIATION, OR TRUST THAT IS IN
 THE CONTROL OF THE TAXPAYER; OR
   (D) A MEMBER OF THE SAME CONTROLLED GROUP AS THE TAXPAYER.
   (14)  "SMALL  NEW  YORK BASED HIGH-TECHNOLOGY BUSINESS" MEANS A CORPO-
 RATION DOING BUSINESS EMPLOYING OR OWNING CAPITAL OR PROPERTY, OR  MAIN-
 TAINING  AN  OFFICE,  IN THIS STATE THAT HAS QUALIFIED RESEARCH EXPENSES
 PAID OR INCURRED FOR RESEARCH CONDUCTED IN THIS STATE OR CONDUCTS  PILOT
 SCALE  MANUFACTURING IN THIS STATE, AND HAS FEWER THAN TWO HUNDRED TWEN-
 TY-FIVE EMPLOYEES, OF  WHOM  SEVENTY-FIVE  PERCENT  ARE  NEW  YORK-BASED
 EMPLOYEES FILLING A POSITION OR JOB IN THIS STATE.
   (15)  "TAX  YEAR"  MEANS  THE  FISCAL OR CALENDAR ACCOUNTING YEAR OF A
 TAXPAYER.
   § 4. This act shall take effect immediately and shall apply to taxable
 years which commence on or after January 1, 2018.