S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1680
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                             January 14, 2021
                                ___________
 
 Introduced  by  Sens.  SKOUFIS,  MAY,  SANDERS -- read twice and ordered
   printed, and when printed to be committed to the Committee  on  Budget
   and Revenue
 
 AN  ACT  to  amend  the tax law, in relation to franchise tax on banking
   corporations
 
   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 article 32 to read
 as follows:
                                ARTICLE 32
                   FRANCHISE TAX ON BANKING CORPORATIONS
 SECTION 1450.   GENERAL DEFINITIONS.
         1451.   IMPOSITION OF TAX.
         1452.   BANKING CORPORATION DEFINED; EXEMPT CORPORATIONS.
         1453.   COMPUTATIONS OF ENTIRE NET INCOME.
         1453-A. COMPUTATION OF ALTERNATIVE ENTIRE NET INCOME.
         1454.   ALLOCATION.
         1455.   COMPUTATION OF TAX.
         1455-A. TAX SURCHARGE.
         1455-B. TEMPORARY  METROPOLITAN  TRANSPORTATION   BUSINESS   TAX
                   SURCHARGE ON BANKS.
         1456.   CREDITS.
         1460.   DECLARATIONS OF ESTIMATED TAX.
         1461.   PAYMENTS OF ESTIMATED TAX.
         1462.   RETURNS.
         1463.   PAYMENT OF TAX.
         1466.   DEPOSIT AND DISPOSITION OF REVENUE.
         1467.   SECRECY REQUIRED OF OFFICIALS; PENALTY FOR VIOLATION.
         1468.   PROCEDURAL PROVISIONS.
   § 1450. GENERAL DEFINITIONS. AS USED IN THIS ARTICLE:
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD05670-01-1
              

 S. 1680                             2

   (A)  THE WORD "TAXPAYER" MEANS A CORPORATION OR ASSOCIATION SUBJECT TO
 A TAX IMPOSED BY THIS ARTICLE.
   (B)  THE  PHRASE  "TAXABLE YEAR" MEANS THE TAXPAYER'S TAXABLE YEAR FOR
 FEDERAL INCOME TAX PURPOSES,  OR  THE  PART  THEREOF  DURING  WHICH  THE
 TAXPAYER IS SUBJECT TO THE TAX IMPOSED BY THIS ARTICLE.
   (C)  THE  TERM "INTERNATIONAL BANKING FACILITY" SHALL MEAN AN INTERNA-
 TIONAL BANKING FACILITY LOCATED IN NEW YORK STATE  AND  SHALL  HAVE  THE
 SAME  MEANING AS IS SET FORTH IN THE NEW YORK STATE BANKING LAW OR REGU-
 LATIONS OF THE NEW YORK STATE DEPARTMENT OF FINANCIAL SERVICES OR AS  IS
 SET  FORTH  IN THE LAWS OF THE UNITED STATES OR REGULATIONS OF THE BOARD
 OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM.
   (D) THE TERM "SUBSIDIARY" MEANS A CORPORATION OR ASSOCIATION OF  WHICH
 OVER  FIFTY PERCENT OF THE NUMBER OF SHARES OF STOCK ENTITLING THE HOLD-
 ERS THEREOF TO VOTE FOR THE ELECTION OF DIRECTORS OR TRUSTEES  IS  OWNED
 BY THE TAXPAYER.
   (E)  THE  TERM  "SUBSIDIARY CAPITAL" MEANS INVESTMENTS IN THE STOCK OF
 SUBSIDIARIES  AND  ANY  INDEBTEDNESS  FROM  SUBSIDIARIES,  EXCLUSIVE  OF
 ACCOUNTS RECEIVABLE ACQUIRED IN THE ORDINARY COURSE OF TRADE OR BUSINESS
 FOR  SERVICES  RENDERED OR FOR SALES OF PROPERTY HELD PRIMARILY FOR SALE
 TO CUSTOMERS, WHETHER OR NOT EVIDENCED BY WRITTEN INSTRUMENT,  ON  WHICH
 INTEREST  IS  NOT CLAIMED AND DEDUCTED BY THE SUBSIDIARY FOR PURPOSES OF
 TAXATION UNDER THIS ARTICLE, ARTICLE  NINE-A  OR  THIRTY-THREE  OF  THIS
 CHAPTER,  PROVIDED,  HOWEVER,  THERE  SHALL  BE DEDUCTED FROM SUBSIDIARY
 CAPITAL ANY LIABILITIES PAYABLE BY THEIR TERMS ON DEMAND OR  WITHIN  ONE
 YEAR  FROM  THE  DATE INCURRED, OTHER THAN LOANS OR ADVANCES OUTSTANDING
 FOR MORE THAN A YEAR AS OF ANY DATE  DURING  THE  YEAR  COVERED  BY  THE
 RETURN, WHICH ARE ATTRIBUTABLE TO SUBSIDIARY CAPITAL.
   (F) THE TERMS "NEW YORK S CORPORATION", "NEW YORK S YEAR", "NEW YORK S
 ELECTION",  "NEW  YORK  C  CORPORATION", "NEW YORK C YEAR", "TERMINATION
 YEAR", "S SHORT YEAR", "C SHORT YEAR", AND "NEW YORK S TERMINATION YEAR"
 SHALL HAVE THE SAME MEANING AS THOSE TERMS HAVE UNDER SUBDIVISION  ONE-A
 OF  SECTION TWO HUNDRED EIGHT OF THIS CHAPTER, EXCEPT THAT REFERENCES IN
 SUCH SUBDIVISION TO ARTICLE NINE-A OF THIS  CHAPTER  SHALL  BE  READ  AS
 REFERENCES TO THIS ARTICLE.
   (G)  THE TERM "QSSS" MEANS A CORPORATION WHICH IS A QUALIFIED SUBCHAP-
 TER S SUBSIDIARY AS DEFINED IN SUBPARAGRAPH (B) OF  PARAGRAPH  THREE  OF
 SUBSECTION  (B)  OF  SECTION  THIRTEEN HUNDRED SIXTY-ONE OF THE INTERNAL
 REVENUE CODE. THE TERM "EXEMPT QSSS" MEANS A QSSS EXEMPT FROM TAX  UNDER
 THIS  ARTICLE  AS PROVIDED IN SUBSECTION (O) OF SECTION FOURTEEN HUNDRED
 FIFTY-THREE OF THIS ARTICLE, OR  A  QSSS  DESCRIBED  IN  CLAUSE  (I)  OF
 SUBPARAGRAPH  (B) OF PARAGRAPH TWO OF SUBSECTION (O) OF SECTION FOURTEEN
 HUNDRED FIFTY-THREE, WHEREIN THE  PARENT  CORPORATION  OF  THE  QSSS  IS
 SUBJECT  TO  TAX UNDER THIS ARTICLE, AND THE ASSETS, LIABILITIES, INCOME
 AND DEDUCTIONS OF THE QSSS  ARE  TREATED  AS  THE  ASSETS,  LIABILITIES,
 INCOME  AND  DEDUCTIONS  OF  THE  PARENT CORPORATION. WHERE A QSSS IS AN
 EXEMPT QSSS, THEN FOR ALL PURPOSES UNDER THIS ARTICLE:
   (1) THE ASSETS, LIABILITIES, INCOME,  DEDUCTIONS,  PROPERTY,  PAYROLL,
 RECEIPTS, CAPITAL, CREDITS, AND ALL OTHER TAX ATTRIBUTES AND ELEMENTS OF
 ECONOMIC  ACTIVITY OF THE QSSS SHALL BE DEEMED TO BE THOSE OF THE PARENT
 CORPORATION,
   (2) THE STOCKS, BONDS AND OTHER SECURITIES ISSUED BY, AND ANY  INDEBT-
 EDNESS  FROM,  THE  QSSS  SHALL  NOT BE SUBSIDIARY CAPITAL OF THE PARENT
 CORPORATION,
   (3) TRANSACTIONS BETWEEN THE PARENT CORPORATION AND THE QSSS,  INCLUD-
 ING  THE  PAYMENT  OF  INTEREST  AND  DIVIDENDS, SHALL NOT BE TAKEN INTO
 ACCOUNT, AND

 S. 1680                             3
 
   (4) GENERAL EXECUTIVE OFFICERS OF THE  QSSS  SHALL  BE  DEEMED  TO  BE
 GENERAL EXECUTIVE OFFICERS OF THE PARENT CORPORATION.
   (H)  THE  TERM  "FINANCIAL  HOLDING COMPANY" MEANS A CORPORATION THAT,
 PURSUANT TO SUBSECTION (L) OF SECTION 4  OF  THE  FEDERAL  BANK  HOLDING
 COMPANY  ACT  OF  NINETEEN HUNDRED FIFTY-SIX, AS AMENDED, HAS FILED WITH
 THE FEDERAL RESERVE BOARD A WRITTEN  DECLARATION  THAT  THE  CORPORATION
 ELECTS TO BE A FINANCIAL HOLDING COMPANY AND WHOSE ELECTION HAS NOT BEEN
 FOUND TO BE INEFFECTIVE BY THE FEDERAL RESERVE BOARD.
   §  1451.  IMPOSITION  OF  TAX. (A) FOR THE PRIVILEGE OF EXERCISING ITS
 FRANCHISE OR DOING BUSINESS IN THIS STATE IN A  CORPORATE  OR  ORGANIZED
 CAPACITY,  A  TAX, COMPUTED UNDER SECTION FOURTEEN HUNDRED FIFTY-FIVE OF
 THIS ARTICLE, IS HEREBY ANNUALLY IMPOSED ON  EVERY  BANKING  CORPORATION
 FOR  EACH  OF  ITS  TAXABLE  YEARS, OR ANY PART THEREOF, BEGINNING ON OR
 AFTER JANUARY FIRST, NINETEEN HUNDRED SEVENTY-THREE.
   (B) IN THE CASE OF A TAXPAYER WHOSE  TAXABLE  YEAR  IS  OTHER  THAN  A
 CALENDAR  YEAR, THERE IS HEREBY IMPOSED A TAX FOR THE PRIVILEGE OF EXER-
 CISING ITS FRANCHISE OR DOING BUSINESS IN THIS STATE IN A  CORPORATE  OR
 ORGANIZED  CAPACITY  FOR  THE  PERIOD  BEGINNING JANUARY FIRST, NINETEEN
 HUNDRED SEVENTY-THREE AND EXTENDING THROUGH THE SUBSEQUENT PART  OF  ITS
 FIRST  SUCH  TAXABLE  YEAR  ENDING  AFTER  SUCH  DATE. SUCH TAX SHALL BE
 COMPUTED UNDER SECTION FOURTEEN HUNDRED FIFTY-FIVE OF  THIS  ARTICLE  ON
 THE  BASIS  OF  SUCH  TAXPAYER'S  ENTIRE NET INCOME, OR OTHER APPLICABLE
 BASIS AS THE CASE MAY BE, FOR SUCH PERIOD  AND  SHALL  BE  PAID  WITH  A
 RETURN WHICH SHALL BE SEPARATELY FILED WITH THE TAX COMMISSION NOT LATER
 THAN  THE  FIFTEENTH DAY OF THE THIRD MONTH SUCCEEDING THE CLOSE OF SUCH
 PERIOD. THE REQUIREMENTS OF SECTIONS FOURTEEN HUNDRED SIXTY AND FOURTEEN
 HUNDRED SIXTY-ONE OF THIS ARTICLE, RELATING TO DECLARATIONS AND PAYMENTS
 OF ESTIMATED TAX, EXCEPT SUBSECTION  (A)  OF  SECTION  FOURTEEN  HUNDRED
 SIXTY-ONE OF THIS ARTICLE, SHALL NOT BE APPLICABLE TO THE TAX IMPOSED BY
 THIS SUBSECTION.
   (C)(1)  A  BANKING  CORPORATION  IS  DOING BUSINESS IN THIS STATE IN A
 CORPORATE OR ORGANIZED CAPACITY IF (I) IT HAS ISSUED CREDIT CARDS TO ONE
 THOUSAND OR MORE CUSTOMERS WHO HAVE A MAILING ADDRESS WITHIN THIS  STATE
 AS  OF  THE  LAST DAY OF ITS TAXABLE YEAR, (II) IT HAS MERCHANT CUSTOMER
 CONTRACTS WITH MERCHANTS AND THE TOTAL NUMBER OF  LOCATIONS  COVERED  BY
 THOSE  CONTRACTS  EQUALS ONE THOUSAND OR MORE LOCATIONS IN THIS STATE TO
 WHOM THE BANKING CORPORATION REMITTED PAYMENTS FOR  CREDIT  CARD  TRANS-
 ACTIONS  DURING  THE  TAXABLE YEAR, (III) IT HAS RECEIPTS OF ONE MILLION
 DOLLARS OR MORE IN THE TAXABLE YEAR FROM ITS  CUSTOMERS  WHO  HAVE  BEEN
 ISSUED  CREDIT  CARDS  BY  THE  BANKING  CORPORATION  AND HAVE A MAILING
 ADDRESS WITHIN THIS STATE, (IV) IT HAS RECEIPTS OF ONE  MILLION  DOLLARS
 OR MORE ARISING FROM MERCHANT CUSTOMER CONTRACTS WITH MERCHANTS RELATING
 TO  LOCATIONS  IN  THIS STATE, OR (V) THE SUM OF THE NUMBER OF CUSTOMERS
 DESCRIBED IN SUBPARAGRAPH (I) OF  THIS  PARAGRAPH  PLUS  THE  NUMBER  OF
 LOCATIONS  COVERED  BY  ITS  CONTRACTS DESCRIBED IN SUBPARAGRAPH (II) OF
 THIS PARAGRAPH EQUALS ONE  THOUSAND  OR  MORE,  OR  THE  AMOUNT  OF  ITS
 RECEIPTS  DESCRIBED  IN  SUBPARAGRAPHS  (III) AND (IV) OF THIS PARAGRAPH
 EQUALS ONE MILLION DOLLARS OR MORE.  FOR  PURPOSES  OF  THIS  PARAGRAPH,
 RECEIPTS  FROM PROCESSING CREDIT CARD TRANSACTIONS FOR MERCHANTS INCLUDE
 MERCHANT DISCOUNT FEES RECEIVED BY THE BANKING CORPORATION.
   (2) AS USED IN THIS SUBSECTION, THE TERM "CREDIT CARD" INCLUDES  BANK,
 CREDIT, TRAVEL AND ENTERTAINMENT CARDS.
   §  1452. BANKING CORPORATION DEFINED; EXEMPT CORPORATIONS. (A) FOR THE
 PURPOSE OF THIS ARTICLE, A BANKING CORPORATION MEANS:

 S. 1680                             4
 
   (1) EVERY CORPORATION OR ASSOCIATION ORGANIZED UNDER THE LAWS OF  THIS
 STATE  WHICH IS AUTHORIZED TO DO A BANKING BUSINESS, OR WHICH IS DOING A
 BANKING BUSINESS;
   (2)  EVERY  CORPORATION OR ASSOCIATION ORGANIZED UNDER THE LAWS OF ANY
 OTHER STATE OR COUNTRY WHICH IS DOING A BANKING BUSINESS;
   (3) EVERY NATIONAL BANKING ASSOCIATION ORGANIZED UNDER  THE  AUTHORITY
 OF THE UNITED STATES WHICH IS DOING A BANKING BUSINESS;
   (4) EVERY FEDERAL SAVINGS BANK WHICH IS DOING A BANKING BUSINESS;
   (5)  EVERY FEDERAL SAVINGS AND LOAN ASSOCIATION WHICH IS DOING A BANK-
 ING BUSINESS;
   (6) A PRODUCTION CREDIT ASSOCIATION ORGANIZED UNDER THE  FEDERAL  FARM
 CREDIT  ACT  OF  NINETEEN HUNDRED THIRTY-THREE, WHICH IS DOING A BANKING
 BUSINESS AND ALL OF WHOSE STOCK HELD BY THE  FEDERAL  PRODUCTION  CREDIT
 CORPORATION HAS BEEN RETIRED;
   (7) EVERY OTHER CORPORATION OR ASSOCIATION ORGANIZED UNDER THE AUTHOR-
 ITY OF THE UNITED STATES WHICH IS DOING A BANKING BUSINESS;
   (8)  THE  MORTGAGE  FACILITIES  CORPORATION  CREATED  BY  CHAPTER FIVE
 HUNDRED SIXTY-FOUR OF THE LAWS OF NINETEEN HUNDRED FIFTY-SIX;
   (9) ANY CORPORATION SIXTY-FIVE PERCENT OR MORE OF WHOSE  VOTING  STOCK
 IS  OWNED  OR  CONTROLLED,  DIRECTLY  OR INDIRECTLY, BY A CORPORATION OR
 CORPORATIONS SUBJECT TO ARTICLE THREE-A OF THE BANKING  LAW,  OR  REGIS-
 TERED  UNDER  THE  FEDERAL  BANK HOLDING COMPANY ACT OF NINETEEN HUNDRED
 FIFTY-SIX, AS AMENDED, OR REGISTERED  AS  A  SAVINGS  AND  LOAN  HOLDING
 COMPANY  (BUT  EXCLUDING A DIVERSIFIED SAVINGS AND LOAN HOLDING COMPANY)
 UNDER THE FEDERAL NATIONAL HOUSING ACT, AS AMENDED, OR BY A  CORPORATION
 OR  CORPORATIONS  DESCRIBED  IN  ANY OF THE FOREGOING PARAGRAPHS OF THIS
 SUBSECTION, PROVIDED THE CORPORATION WHOSE VOTING STOCK IS SO  OWNED  OR
 CONTROLLED  IS  PRINCIPALLY  ENGAGED  IN A BUSINESS, REGARDLESS OF WHERE
 CONDUCTED, WHICH (I)  MIGHT  BE  LAWFULLY  CONDUCTED  BY  A  CORPORATION
 SUBJECT  TO  ARTICLE  THREE  OF THE BANKING LAW OR BY A NATIONAL BANKING
 ASSOCIATION, OR (II) IS SO CLOSELY RELATED TO  BANKING  OR  MANAGING  OR
 CONTROLLING  BANKS  AS  TO BE A PROPER INCIDENT THERETO, AS SET FORTH IN
 PARAGRAPH EIGHT OF SUBSECTION (C) OR SUBPARAGRAPH (F) OF PARAGRAPH  FOUR
 OF  SUBSECTION  (K)  OF SECTION FOUR OF THE FEDERAL BANK HOLDING COMPANY
 ACT OF NINETEEN HUNDRED  FIFTY-SIX,  AS  AMENDED,  OR  (III)  HOLDS  AND
 MANAGES  INVESTMENT  ASSETS,  INCLUDING BUT NOT LIMITED TO BONDS, NOTES,
 DEBENTURES AND OTHER OBLIGATIONS FOR THE PAYMENT OF MONEY, STOCKS, PART-
 NERSHIP INTERESTS OR OTHER EQUITY INTERESTS, AND OTHER INVESTMENT  SECU-
 RITIES AND WHICH IS NOT A BUSINESS DESCRIBED IN SUBPARAGRAPH (I) OR (II)
 OF  THIS  PARAGRAPH;  AND  PROVIDED,  FURTHER,  THAT IN NO EVENT SHALL A
 CORPORATION PRINCIPALLY ENGAGED IN A BUSINESS DESCRIBED IN  SECTION  ONE
 HUNDRED  EIGHTY-THREE OR ONE HUNDRED EIGHTY-FOUR, OR SECTION ONE HUNDRED
 EIGHTY-SIX AS IT  WAS  IN  EFFECT  ON  DECEMBER  THIRTY-FIRST,  NINETEEN
 HUNDRED NINETY-NINE, OF THIS CHAPTER BE SUBJECT TO THE TAX IMPOSED UNDER
 THIS  ARTICLE  IF  ANY  OF  ITS  BUSINESS RECEIPTS FROM SUCH PRINCIPALLY
 ENGAGED IN BUSINESS ARE FROM OTHER THAN A CORPORATION (A) WHICH OWNS  OR
 CONTROLS,  DIRECTLY  OR  INDIRECTLY,  SIXTY-FIVE  PERCENT OR MORE OF ITS
 VOTING STOCK, OR (B) SIXTY-FIVE PERCENT OR MORE OF WHOSE VOTING STOCK IS
 OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY, BY THE CORPORATION  ENGAGED
 IN  SUCH  BUSINESS,  OR  (C)  SIXTY-FIVE PERCENT OR MORE OF WHOSE VOTING
 STOCK IS OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY, BY THE SAME INTER-
 EST.
   (B) BANKING BUSINESS DEFINED. THE WORDS "BANKING BUSINESS" AS USED  IN
 THIS  SECTION  MEAN SUCH BUSINESS AS A CORPORATION OR ASSOCIATION MAY BE
 CREATED TO DO UNDER ARTICLE THREE, THREE-B, FIVE, FIVE-A, FIVE-C, SIX OR
 TEN OF THE BANKING LAW OR ANY BUSINESS WHICH A  CORPORATION  OR  ASSOCI-

 S. 1680                             5
 
 ATION  IS  AUTHORIZED  BY SUCH ARTICLE TO DO. HOWEVER, WITH RESPECT TO A
 NATIONAL BANKING ASSOCIATION ORGANIZED UNDER THE AUTHORITY OF THE UNITED
 STATES, A FEDERAL SAVINGS BANK, A FEDERAL SAVINGS AND  LOAN  ASSOCIATION
 OR A PRODUCTION CREDIT ASSOCIATION, THE WORDS "BANKING BUSINESS" AS USED
 IN  THIS  SECTION  MEAN SUCH BUSINESS AS A NATIONAL BANKING ASSOCIATION,
 FEDERAL SAVINGS BANK, FEDERAL SAVINGS AND LOAN ASSOCIATION OR PRODUCTION
 CREDIT ASSOCIATION, RESPECTIVELY, MAY BE CREATED TO DO OR IS  AUTHORIZED
 TO  DO  UNDER  THE  LAWS  OF  THE UNITED STATES OR THIS STATE. THE WORDS
 "BANKING BUSINESS" AS USED IN THIS SECTION SHALL ALSO MEAN SUCH BUSINESS
 AS ANY CORPORATION OR ASSOCIATION ORGANIZED UNDER THE AUTHORITY  OF  THE
 UNITED  STATES OR ORGANIZED UNDER THE LAWS OF ANY OTHER STATE OR COUNTRY
 HAS AUTHORITY TO DO WHICH IS SUBSTANTIALLY SIMILAR TO THE BUSINESS WHICH
 A CORPORATION OR ASSOCIATION MAY BE CREATED TO DO UNDER  ARTICLE  THREE,
 THREE-B,  FIVE,  FIVE-A,  FIVE-C,  SIX  OR TEN OF THE BANKING LAW OR ANY
 BUSINESS WHICH A CORPORATION OR ASSOCIATION IS AUTHORIZED BY SUCH  ARTI-
 CLE TO DO.
   (C) EXEMPT CORPORATIONS. A TRUST COMPANY ALL OF WHOSE CAPITAL STOCK IS
 OWNED BY TWENTY OR MORE SAVINGS BANKS ORGANIZED UNDER NEW YORK LAW SHALL
 BE EXEMPT FROM THE TAX UNDER THIS ARTICLE.
   (D)  CORPORATIONS  TAXABLE  UNDER  ARTICLE NINE-A. NOTWITHSTANDING THE
 PROVISIONS OF THIS ARTICLE, ALL CORPORATIONS OF CLASSES NOW  OR  HERETO-
 FORE  TAXABLE  UNDER ARTICLE NINE-A OF THIS CHAPTER SHALL CONTINUE TO BE
 TAXABLE UNDER SUCH ARTICLE NINE-A, EXCEPT:  (1)  CORPORATIONS  ORGANIZED
 UNDER  ARTICLE  FIVE-A  OF  THE BANKING LAW; (2) CORPORATIONS SUBJECT TO
 ARTICLE THREE-A OF THE BANKING LAW, OR REGISTERED UNDER THE FEDERAL BANK
 HOLDING COMPANY ACT OF NINETEEN HUNDRED FIFTY-SIX, AS AMENDED, OR REGIS-
 TERED AS A SAVINGS AND LOAN HOLDING COMPANY (BUT EXCLUDING A DIVERSIFIED
 SAVINGS AND LOAN HOLDING COMPANY) UNDER  THE  FEDERAL  NATIONAL  HOUSING
 ACT,  AS  AMENDED,  WHICH MAKE A COMBINED RETURN UNDER THE PROVISIONS OF
 SUBSECTION (F) OF SECTION FOURTEEN HUNDRED SIXTY-TWO  OF  THIS  ARTICLE;
 (3)  BANKING  CORPORATIONS DESCRIBED IN PARAGRAPH NINE OF SUBSECTION (A)
 OF THIS SECTION; (4) ANY CAPTIVE REIT OR CAPTIVE RIC THAT IS REQUIRED TO
 BE INCLUDED IN A COMBINED RETURN UNDER THE PROVISIONS OF SUBSECTION  (F)
 OF SECTION FOURTEEN HUNDRED SIXTY-TWO OF THIS ARTICLE; AND (5) ANY OVER-
 CAPITALIZED  CAPTIVE  INSURANCE  COMPANY  REQUIRED  TO  BE INCLUDED IN A
 COMBINED RETURN UNDER SUBSECTION (F) OF SECTION FOURTEEN HUNDRED  SIXTY-
 TWO  OF THIS ARTICLE. PROVIDED, HOWEVER, THAT A CORPORATION DESCRIBED IN
 PARAGRAPH THREE OF THIS SUBSECTION WHICH WAS SUBJECT TO THE TAX  IMPOSED
 BY  ARTICLE  NINE-A  OF  THIS CHAPTER FOR ITS TAXABLE YEAR ENDING DURING
 NINETEEN HUNDRED EIGHTY-FOUR MAY, ON OR BEFORE THE DUE DATE  FOR  FILING
 ITS  RETURN  (DETERMINED WITH REGARD TO EXTENSIONS) FOR ITS TAXABLE YEAR
 ENDING DURING NINETEEN HUNDRED EIGHTY-FIVE, MAKE A ONE TIME ELECTION  TO
 CONTINUE  TO  BE  TAXABLE UNDER SUCH ARTICLE NINE-A. SUCH ELECTION SHALL
 CONTINUE TO BE IN EFFECT UNTIL REVOKED BY THE TAXPAYER.    IN  NO  EVENT
 SHALL SUCH ELECTION OR REVOCATION BE FOR A PART OF A TAXABLE YEAR.
   (E) CORPORATIONS TAXABLE UNDER ARTICLE THIRTY-THREE. EXCEPT FOR CORPO-
 RATIONS  DESCRIBED  IN SUBSECTION (1) OF SECTION FOURTEEN HUNDRED FIFTY-
 THREE OF THIS ARTICLE, CORPORATIONS LIABLE TO TAX UNDER ARTICLE  THIRTY-
 THREE OF THIS CHAPTER SHALL NOT BE SUBJECT TO TAX UNDER THIS ARTICLE.
   (F) FOR EXEMPTION FROM TAX OF A QUALIFIED SUBCHAPTER S SUBSIDIARY, SEE
 SUBSECTION (O) OF SECTION FOURTEEN HUNDRED FIFTY-THREE OF THIS ARTICLE.
   (G)  A  BANKING  CORPORATION ORGANIZED UNDER THE LAWS OF A COUNTRY, OR
 ANY POLITICAL SUBDIVISION THEREOF, OTHER THAN THE  UNITED  STATES  SHALL
 NOT  BE  DEEMED TO BE DOING BUSINESS IN THIS STATE UNDER THIS ARTICLE IF
 ITS ACTIVITIES IN THIS STATE ARE LIMITED  SOLELY  TO  (1)  INVESTING  OR
 TRADING  IN STOCKS AND SECURITIES FOR ITS OWN ACCOUNT WITHIN THE MEANING

 S. 1680                             6
 
 OF CLAUSE (II) OF SUBPARAGRAPH (A) OF PARAGRAPH (2) OF SUBSECTION (B) OF
 SECTION EIGHT HUNDRED SIXTY-FOUR OF THE INTERNAL  REVENUE  CODE  OR  (2)
 INVESTING OR TRADING IN COMMODITIES FOR ITS OWN ACCOUNT WITHIN THE MEAN-
 ING  OF  CLAUSE  (II) OF SUBPARAGRAPH (B) OF PARAGRAPH (2) OF SUBSECTION
 (B) OF SECTION EIGHT HUNDRED SIXTY-FOUR OF THE INTERNAL REVENUE CODE  OR
 (3) ANY COMBINATION OF ACTIVITIES DESCRIBED IN PARAGRAPHS ONE AND TWO OF
 THIS SUBSECTION.
   (H)  TRANSITIONAL PROVISIONS RELATING TO THE ENACTMENT AND IMPLEMENTA-
 TION OF THE FEDERAL GRAMM-LEACH-BLILEY ACT. (1) NOTWITHSTANDING ANYTHING
 TO THE CONTRARY CONTAINED IN THIS SECTION OTHER THAN SUBSECTION  (N)  OF
 THIS  SECTION, A CORPORATION THAT WAS IN EXISTENCE BEFORE JANUARY FIRST,
 TWO THOUSAND AND WAS SUBJECT TO TAX UNDER SUCH ARTICLE  NINE-A  OF  THIS
 CHAPTER  FOR  ITS  LAST TAXABLE YEAR BEGINNING BEFORE JANUARY FIRST, TWO
 THOUSAND, SHALL CONTINUE TO BE TAXABLE UNDER SUCH ARTICLE NINE-A FOR ALL
 TAXABLE YEARS BEGINNING ON OR AFTER  JANUARY  FIRST,  TWO  THOUSAND  AND
 BEFORE JANUARY FIRST, TWO THOUSAND ONE. THE PRECEDING SENTENCE SHALL NOT
 APPLY  TO  ANY  TAXABLE  YEAR DURING WHICH SUCH CORPORATION IS A BANKING
 CORPORATION DESCRIBED IN PARAGRAPHS ONE THROUGH EIGHT OF SUBSECTION  (A)
 OF  THIS  SECTION. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN
 THIS SECTION OTHER THAN SUBSECTION (N) OF THIS SECTION, A BANKING CORPO-
 RATION THAT WAS IN EXISTENCE BEFORE JANUARY FIRST, TWO THOUSAND AND  WAS
 SUBJECT  TO  TAX  UNDER THIS ARTICLE FOR ITS LAST TAXABLE YEAR BEGINNING
 BEFORE JANUARY FIRST, TWO THOUSAND, SHALL CONTINUE TO BE  TAXABLE  UNDER
 THIS  ARTICLE FOR ALL TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST,
 TWO THOUSAND AND BEFORE  JANUARY  FIRST,  TWO  THOUSAND  ONE.  PROVIDED,
 HOWEVER,  THAT  NOTHING  IN THIS SUBSECTION SHALL PROHIBIT A CORPORATION
 THAT ELECTED PURSUANT TO SUBSECTION (D) OF THIS SECTION  TO  BE  TAXABLE
 UNDER  ARTICLE  NINE-A  OF  THIS  CHAPTER FROM REVOKING THAT ELECTION IN
 ACCORDANCE WITH SUCH SUBSECTION (D).
   FOR PURPOSES OF THIS PARAGRAPH, A CORPORATION SHALL BE  CONSIDERED  TO
 BE  SUBJECT  TO  TAX  UNDER ARTICLE NINE-A OF THIS CHAPTER FOR A TAXABLE
 YEAR IF SUCH CORPORATION WAS NOT A TAXPAYER BUT WAS PROPERLY INCLUDED IN
 A COMBINED REPORT FILED PURSUANT TO SECTION TWO HUNDRED ELEVEN  OF  THIS
 CHAPTER  FOR  SUCH TAXABLE YEAR AND A CORPORATION SHALL BE CONSIDERED TO
 BE SUBJECT TO TAX UNDER THIS ARTICLE FOR A TAXABLE YEAR IF  SUCH  CORPO-
 RATION WAS NOT A TAXPAYER BUT WAS PROPERLY INCLUDED IN A COMBINED RETURN
 FILED  PURSUANT  TO  SUBSECTION  (F)  OR (G) OF SECTION FOURTEEN HUNDRED
 SIXTY-TWO OF THIS ARTICLE FOR SUCH TAXABLE YEAR. A CORPORATION THAT  WAS
 IN  EXISTENCE  BEFORE  JANUARY  FIRST,  TWO THOUSAND BUT FIRST BECOMES A
 TAXPAYER IN A TAXABLE YEAR BEGINNING ON  OR  AFTER  JANUARY  FIRST,  TWO
 THOUSAND AND BEFORE JANUARY FIRST, TWO THOUSAND ONE, SHALL BE CONSIDERED
 FOR PURPOSES OF THIS PARAGRAPH TO HAVE BEEN SUBJECT TO TAX UNDER ARTICLE
 NINE-A  OF THIS CHAPTER FOR ITS LAST TAXABLE YEAR BEGINNING BEFORE JANU-
 ARY FIRST, TWO THOUSAND IF SUCH CORPORATION WOULD HAVE BEEN  SUBJECT  TO
 TAX  UNDER  SUCH ARTICLE FOR SUCH TAXABLE YEAR IF IT HAD BEEN A TAXPAYER
 DURING SUCH TAXABLE YEAR. A CORPORATION THAT  WAS  IN  EXISTENCE  BEFORE
 JANUARY  FIRST,  TWO  THOUSAND BUT FIRST BECOMES A TAXPAYER IN A TAXABLE
 YEAR BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND AND BEFORE  JANU-
 ARY  FIRST,  TWO  THOUSAND ONE, SHALL BE CONSIDERED FOR PURPOSES OF THIS
 PARAGRAPH TO HAVE BEEN SUBJECT TO TAX UNDER THIS ARTICLE  FOR  ITS  LAST
 TAXABLE YEAR BEGINNING BEFORE JANUARY FIRST, TWO THOUSAND IF SUCH CORPO-
 RATION  WOULD HAVE BEEN SUBJECT TO TAX UNDER THIS ARTICLE FOR SUCH TAXA-
 BLE YEAR IF IT HAD BEEN A TAXPAYER DURING SUCH TAXABLE YEAR.
   (2) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS SECTION
 OTHER THAN SUBSECTION (N) OF THIS SECTION, A CORPORATION  FORMED  ON  OR
 AFTER JANUARY FIRST, TWO THOUSAND AND BEFORE JANUARY FIRST, TWO THOUSAND

 S. 1680                             7

 ONE  MAY  ELECT TO BE SUBJECT TO TAX UNDER THIS ARTICLE OR UNDER ARTICLE
 NINE-A OF THIS CHAPTER FOR ITS FIRST TAXABLE YEAR BEGINNING ON OR  AFTER
 JANUARY  FIRST,  TWO THOUSAND AND BEFORE JANUARY FIRST, TWO THOUSAND ONE
 IN  WHICH  EITHER  (I) SIXTY-FIVE PERCENT OR MORE OF ITS VOTING STOCK IS
 OWNED OR CONTROLLED, DIRECTLY  OR  INDIRECTLY  BY  A  FINANCIAL  HOLDING
 COMPANY,  PROVIDED  THE  CORPORATION  WHOSE  VOTING STOCK IS SO OWNED OR
 CONTROLLED IS PRINCIPALLY ENGAGED IN ACTIVITIES THAT  ARE  DESCRIBED  IN
 SECTION  4(K)(4)  OR  4(K)(5) OF THE FEDERAL BANK HOLDING COMPANY ACT OF
 NINETEEN HUNDRED FIFTY-SIX, AS AMENDED AND THE  REGULATIONS  PROMULGATED
 PURSUANT  TO  THE  AUTHORITY  OF SUCH SECTION, OR (II) IT IS A FINANCIAL
 SUBSIDIARY. AN ELECTION UNDER THIS PARAGRAPH MAY NOT BE MADE BY A CORPO-
 RATION DESCRIBED IN PARAGRAPHS ONE THROUGH EIGHT OF  SUBSECTION  (A)  OF
 THIS  SECTION  OR  IN  SUBSECTION  (E)  OF THIS SECTION. IN ADDITION, AN
 ELECTION UNDER THIS PARAGRAPH MAY NOT BE MADE BY A CORPORATION THAT IS A
 PARTY TO A REORGANIZATION, AS DEFINED IN SUBSECTION (A) OF  SECTION  368
 OF  THE  INTERNAL  REVENUE  CODE  OF  1986, AS AMENDED, OF A CORPORATION
 DESCRIBED IN PARAGRAPH ONE OF THIS SUBSECTION IF BOTH CORPORATIONS  WERE
 SIXTY-FIVE  PERCENT OR MORE OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY,
 BY THE SAME INTERESTS AT THE TIME OF THE REORGANIZATION.
   AN ELECTION UNDER THIS PARAGRAPH MUST BE MADE BY THE  TAXPAYER  ON  OR
 BEFORE  THE  DUE  DATE  FOR FILING ITS RETURN (DETERMINED WITH REGARD TO
 EXTENSIONS OF TIME FOR FILING) FOR  THE  APPLICABLE  TAXABLE  YEAR.  THE
 ELECTION  TO BE TAXED UNDER ARTICLE NINE-A OF THIS CHAPTER SHALL BE MADE
 BY THE TAXPAYER BY FILING THE REPORT REQUIRED PURSUANT  TO  SECTION  TWO
 HUNDRED  ELEVEN  OF THIS CHAPTER AND THE ELECTION TO BE TAXED UNDER THIS
 ARTICLE SHALL BE MADE BY THE TAXPAYER  BY  FILING  THE  RETURN  REQUIRED
 PURSUANT  TO  SECTION  FOURTEEN  HUNDRED  SIXTY-TWO OF THIS ARTICLE. ANY
 ELECTION MADE PURSUANT TO THIS PARAGRAPH SHALL BE IRREVOCABLE AND  SHALL
 APPLY  TO  EACH  SUBSEQUENT  TAXABLE  YEAR BEGINNING ON OR AFTER JANUARY
 FIRST, TWO THOUSAND AND BEFORE JANUARY FIRST, TWO THOUSAND ONE, PROVIDED
 THAT THE STOCK OWNERSHIP REQUIREMENTS DESCRIBED IN SUBPARAGRAPH  (I)  OF
 THIS  PARAGRAPH  ARE  MET  OR SUCH CORPORATION DESCRIBED IN SUBPARAGRAPH
 (II) OF THIS PARAGRAPH CONTINUES AS A FINANCIAL SUBSIDIARY.
   (3) FOR PURPOSES OF THIS  SECTION,  A  FINANCIAL  SUBSIDIARY  MEANS  A
 CORPORATION  (I)  SIXTY-FIVE  PERCENT  OR  MORE OF WHOSE VOTING STOCK IS
 OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY  BY  A  BANKING  CORPORATION
 DESCRIBED  IN  PARAGRAPH  ONE,  TWO  OR  THREE OF SUBSECTION (A) OF THIS
 SECTION AND (II) IS DESCRIBED IN SECTION 5136A(G) OF THE  REVISED  STAT-
 UTES OF THE UNITED STATES OR SECTION 46 OF THE FEDERAL DEPOSIT INSURANCE
 ACT.  FOR PURPOSES OF THIS ARTICLE, THE TERM "BANKING CORPORATION" SHALL
 INCLUDE A CORPORATION ELECTING TO BE TAXED UNDER THIS  ARTICLE  PURSUANT
 TO  PARAGRAPH  TWO OF THIS SUBSECTION FOR SO LONG AS SUCH ELECTION SHALL
 BE IN EFFECT.
   (I) TRANSITIONAL PROVISIONS RELATING TO THE ENACTMENT AND  IMPLEMENTA-
 TION OF THE FEDERAL GRAMM-LEACH-BLILEY ACT. (1) NOTWITHSTANDING ANYTHING
 TO  THE  CONTRARY CONTAINED IN THIS SECTION OTHER THAN SUBSECTION (N) OF
 THIS SECTION, A CORPORATION THAT WAS IN EXISTENCE BEFORE JANUARY  FIRST,
 TWO  THOUSAND  ONE  AND  WAS SUBJECT TO TAX UNDER ARTICLE NINE-A OF THIS
 CHAPTER FOR ITS LAST TAXABLE YEAR BEGINNING BEFORE  JANUARY  FIRST,  TWO
 THOUSAND  ONE, SHALL CONTINUE TO BE TAXABLE UNDER ARTICLE NINE-A FOR ALL
 TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND ONE  AND
 BEFORE  JANUARY  FIRST, TWO THOUSAND THREE. THE PRECEDING SENTENCE SHALL
 NOT APPLY TO ANY TAXABLE YEAR DURING WHICH SUCH CORPORATION IS A BANKING
 CORPORATION DESCRIBED IN PARAGRAPHS ONE THROUGH EIGHT OF SUBSECTION  (A)
 OF  THIS  SECTION. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN
 THIS SECTION OTHER THAN SUBSECTION (N) OF THIS SECTION, A BANKING CORPO-

 S. 1680                             8
 
 RATION THAT WAS IN EXISTENCE BEFORE JANUARY FIRST, TWO THOUSAND ONE  AND
 WAS  SUBJECT  TO TAX UNDER THIS ARTICLE FOR ITS LAST TAXABLE YEAR BEGIN-
 NING BEFORE JANUARY FIRST, TWO THOUSAND ONE, SHALL CONTINUE TO BE  TAXA-
 BLE UNDER THIS ARTICLE FOR ALL TAXABLE YEARS BEGINNING ON OR AFTER JANU-
 ARY  FIRST,  TWO  THOUSAND  ONE  AND  BEFORE JANUARY FIRST, TWO THOUSAND
 THREE. PROVIDED, HOWEVER, THAT NOTHING IN THIS SUBSECTION SHALL PROHIBIT
 A CORPORATION THAT ELECTED PURSUANT TO SUBSECTION (D) OF THIS SECTION TO
 BE TAXABLE UNDER ARTICLE NINE-A  OF  THIS  CHAPTER  FROM  REVOKING  THAT
 ELECTION IN ACCORDANCE WITH SUCH SUBSECTION (D).
   FOR  PURPOSES  OF THIS PARAGRAPH, A CORPORATION SHALL BE CONSIDERED TO
 BE SUBJECT TO TAX UNDER ARTICLE NINE-A OF THIS  CHAPTER  FOR  A  TAXABLE
 YEAR IF SUCH CORPORATION WAS NOT A TAXPAYER BUT WAS PROPERLY INCLUDED IN
 A  COMBINED  REPORT FILED PURSUANT TO SECTION TWO HUNDRED ELEVEN OF THIS
 CHAPTER FOR SUCH TAXABLE YEAR AND A CORPORATION SHALL BE  CONSIDERED  TO
 BE  SUBJECT  TO TAX UNDER THIS ARTICLE FOR A TAXABLE YEAR IF SUCH CORPO-
 RATION WAS NOT A TAXPAYER BUT WAS PROPERLY INCLUDED IN A COMBINED RETURN
 FILED PURSUANT TO SUBSECTION (F) OR  (G)  OF  SECTION  FOURTEEN  HUNDRED
 SIXTY-TWO  OF THIS ARTICLE FOR SUCH TAXABLE YEAR. A CORPORATION THAT WAS
 IN EXISTENCE BEFORE JANUARY FIRST, TWO THOUSAND ONE BUT FIRST BECOMES  A
 TAXPAYER  IN  A  TAXABLE  YEAR  BEGINNING ON OR AFTER JANUARY FIRST, TWO
 THOUSAND ONE AND BEFORE JANUARY FIRST,  TWO  THOUSAND  THREE,  SHALL  BE
 CONSIDERED  FOR  PURPOSES  OF THIS PARAGRAPH TO HAVE BEEN SUBJECT TO TAX
 UNDER ARTICLE NINE-A OF THIS CHAPTER FOR ITS LAST TAXABLE YEAR BEGINNING
 BEFORE JANUARY FIRST, TWO THOUSAND ONE IF SUCH  CORPORATION  WOULD  HAVE
 BEEN  SUBJECT  TO TAX UNDER SUCH ARTICLE FOR SUCH TAXABLE YEAR IF IT HAD
 BEEN A TAXPAYER DURING SUCH TAXABLE YEAR.  A  CORPORATION  THAT  WAS  IN
 EXISTENCE  BEFORE  JANUARY  FIRST,  TWO THOUSAND ONE BUT FIRST BECOMES A
 TAXPAYER IN A TAXABLE YEAR BEGINNING ON  OR  AFTER  JANUARY  FIRST,  TWO
 THOUSAND  ONE  AND  BEFORE  JANUARY  FIRST, TWO THOUSAND THREE, SHALL BE
 CONSIDERED FOR PURPOSES OF THIS PARAGRAPH TO HAVE BEEN  SUBJECT  TO  TAX
 UNDER  THIS  ARTICLE  FOR ITS LAST TAXABLE YEAR BEGINNING BEFORE JANUARY
 FIRST, TWO THOUSAND ONE IF SUCH CORPORATION WOULD HAVE BEEN  SUBJECT  TO
 TAX  UNDER  THIS ARTICLE FOR SUCH TAXABLE YEAR IF IT HAD BEEN A TAXPAYER
 DURING SUCH TAXABLE YEAR.
   (2) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS SECTION
 OTHER THAN SUBSECTION (N) OF THIS SECTION, A CORPORATION  FORMED  ON  OR
 AFTER  JANUARY  FIRST,  TWO  THOUSAND  ONE AND BEFORE JANUARY FIRST, TWO
 THOUSAND THREE MAY ELECT TO BE SUBJECT TO  TAX  UNDER  THIS  ARTICLE  OR
 UNDER  ARTICLE  NINE-A OF THIS CHAPTER FOR ITS FIRST TAXABLE YEAR BEGIN-
 NING ON OR AFTER JANUARY FIRST, TWO  THOUSAND  ONE  AND  BEFORE  JANUARY
 FIRST, TWO THOUSAND THREE IN WHICH EITHER (I) SIXTY-FIVE PERCENT OR MORE
 OF  ITS VOTING STOCK IS OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY BY A
 FINANCIAL HOLDING COMPANY, PROVIDED THE CORPORATION WHOSE  VOTING  STOCK
 IS  SO OWNED OR CONTROLLED IS PRINCIPALLY ENGAGED IN ACTIVITIES THAT ARE
 DESCRIBED IN SECTION 4(K)(4) OR 4(K)(5)  OF  THE  FEDERAL  BANK  HOLDING
 COMPANY  ACT  OF  NINETEEN  HUNDRED  FIFTY-SIX, AS AMENDED AND THE REGU-
 LATIONS PROMULGATED PURSUANT TO THE AUTHORITY OF SUCH SECTION,  OR  (II)
 IT IS A FINANCIAL SUBSIDIARY.
   AN  ELECTION  UNDER  THIS  PARAGRAPH  MAY NOT BE MADE BY A CORPORATION
 DESCRIBED IN PARAGRAPHS ONE THROUGH EIGHT  OF  SUBSECTION  (A)  OF  THIS
 SECTION  OR  IN SUBSECTION (E) OF THIS SECTION. IN ADDITION, AN ELECTION
 UNDER THIS PARAGRAPH MAY NOT BE MADE BY A CORPORATION THAT IS A PARTY TO
 A REORGANIZATION, AS DEFINED IN SUBSECTION (A) OF  SECTION  368  OF  THE
 INTERNAL REVENUE CODE OF 1986, AS AMENDED, OF A CORPORATION DESCRIBED IN
 PARAGRAPH  ONE  OF  THIS SUBSECTION IF BOTH CORPORATIONS WERE SIXTY-FIVE
 PERCENT OR MORE OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY, BY THE SAME

 S. 1680                             9
 
 INTERESTS AT THE TIME OF THE  REORGANIZATION.  AN  ELECTION  UNDER  THIS
 PARAGRAPH  MUST  BE  MADE  BY THE TAXPAYER ON OR BEFORE THE DUE DATE FOR
 FILING ITS RETURN (DETERMINED WITH REGARD  TO  EXTENSIONS  OF  TIME  FOR
 FILING)  FOR THE APPLICABLE TAXABLE YEAR. THE ELECTION TO BE TAXED UNDER
 ARTICLE NINE-A OF THIS CHAPTER SHALL BE MADE BY THE TAXPAYER  BY  FILING
 THE REPORT REQUIRED PURSUANT TO SECTION TWO HUNDRED ELEVEN OF THIS CHAP-
 TER AND THE ELECTION TO BE TAXED UNDER THIS ARTICLE SHALL BE MADE BY THE
 TAXPAYER  BY  FILING  THE  RETURN  REQUIRED PURSUANT TO SECTION FOURTEEN
 HUNDRED SIXTY-TWO OF THIS ARTICLE. ANY ELECTION MADE  PURSUANT  TO  THIS
 PARAGRAPH  SHALL BE IRREVOCABLE AND SHALL APPLY TO EACH SUBSEQUENT TAXA-
 BLE YEAR BEGINNING ON OR AFTER  JANUARY  FIRST,  TWO  THOUSAND  ONE  AND
 BEFORE JANUARY FIRST, TWO THOUSAND THREE, PROVIDED THAT THE STOCK OWNER-
 SHIP  REQUIREMENTS  DESCRIBED  IN SUBPARAGRAPH (I) OF THIS PARAGRAPH ARE
 MET OR SUCH CORPORATION DESCRIBED IN SUBPARAGRAPH (II) OF THIS PARAGRAPH
 CONTINUES AS A FINANCIAL SUBSIDIARY.
   (3) FOR PURPOSES OF THIS  SECTION,  A  FINANCIAL  SUBSIDIARY  MEANS  A
 CORPORATION  (I)  SIXTY-FIVE  PERCENT  OR  MORE OF WHOSE VOTING STOCK IS
 OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY  BY  A  BANKING  CORPORATION
 DESCRIBED  IN  PARAGRAPH  ONE,  TWO  OR  THREE OF SUBSECTION (A) OF THIS
 SECTION AND (II) IS DESCRIBED IN SECTION 5136A(G) OF THE  REVISED  STAT-
 UTES OF THE UNITED STATES OR SECTION 46 OF THE FEDERAL DEPOSIT INSURANCE
 ACT.  FOR PURPOSES OF THIS ARTICLE, THE TERM "BANKING CORPORATION" SHALL
 INCLUDE A CORPORATION ELECTING TO BE TAXED UNDER THIS  ARTICLE  PURSUANT
 TO  PARAGRAPH  TWO OF THIS SUBSECTION FOR SO LONG AS SUCH ELECTION SHALL
 BE IN EFFECT.
   (J) TRANSITIONAL PROVISIONS RELATING TO THE ENACTMENT AND  IMPLEMENTA-
 TION OF THE FEDERAL GRAMM-LEACH-BLILEY ACT. (1) NOTWITHSTANDING ANYTHING
 TO  THE  CONTRARY CONTAINED IN THIS SECTION OTHER THAN SUBSECTION (N) OF
 THIS SECTION, A CORPORATION THAT WAS IN EXISTENCE BEFORE JANUARY  FIRST,
 TWO  THOUSAND  THREE AND WAS SUBJECT TO TAX UNDER ARTICLE NINE-A OF THIS
 CHAPTER FOR ITS LAST TAXABLE YEAR BEGINNING BEFORE  JANUARY  FIRST,  TWO
 THOUSAND  THREE,  SHALL CONTINUE TO BE TAXABLE UNDER SUCH ARTICLE NINE-A
 FOR ALL TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO  THOUSAND
 THREE  AND  BEFORE  JANUARY  FIRST,  TWO  THOUSAND  FOUR.  THE PRECEDING
 SENTENCE SHALL NOT APPLY TO ANY TAXABLE YEAR DURING  WHICH  SUCH  CORPO-
 RATION  IS  A  BANKING  CORPORATION  DESCRIBED IN PARAGRAPHS ONE THROUGH
 EIGHT OF SUBSECTION (A) OF THIS SECTION. NOTWITHSTANDING ANYTHING TO THE
 CONTRARY CONTAINED IN THIS SECTION OTHER THAN  SUBSECTION  (N)  OF  THIS
 SECTION,  A  BANKING  CORPORATION  THAT  WAS IN EXISTENCE BEFORE JANUARY
 FIRST, TWO THOUSAND THREE AND WAS SUBJECT TO TAX UNDER THIS ARTICLE  FOR
 ITS  LAST  TAXABLE  YEAR  BEGINNING  BEFORE  JANUARY FIRST, TWO THOUSAND
 THREE, SHALL CONTINUE TO BE TAXABLE UNDER THIS ARTICLE FOR  ALL  TAXABLE
 YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND THREE AND BEFORE
 JANUARY  FIRST,  TWO  THOUSAND  FOUR. PROVIDED, HOWEVER, THAT NOTHING IN
 THIS SUBSECTION SHALL PROHIBIT A CORPORATION THAT  ELECTED  PURSUANT  TO
 SUBSECTION  (D)  OF  THIS  SECTION TO BE TAXABLE UNDER ARTICLE NINE-A OF
 THIS CHAPTER  FROM  REVOKING  THAT  ELECTION  IN  ACCORDANCE  WITH  SUCH
 SUBSECTION (D).
   FOR  PURPOSES  OF THIS PARAGRAPH, A CORPORATION SHALL BE CONSIDERED TO
 BE SUBJECT TO TAX UNDER ARTICLE NINE-A OF THIS  CHAPTER  FOR  A  TAXABLE
 YEAR IF SUCH CORPORATION WAS NOT A TAXPAYER BUT WAS PROPERLY INCLUDED IN
 A  COMBINED  REPORT FILED PURSUANT TO SECTION TWO HUNDRED ELEVEN OF THIS
 CHAPTER FOR SUCH TAXABLE YEAR AND A CORPORATION SHALL BE  CONSIDERED  TO
 BE  SUBJECT  TO TAX UNDER THIS ARTICLE FOR A TAXABLE YEAR IF SUCH CORPO-
 RATION WAS NOT A TAXPAYER BUT WAS PROPERLY INCLUDED IN A COMBINED RETURN
 FILED PURSUANT TO SUBSECTION (F) OR  (G)  OF  SECTION  FOURTEEN  HUNDRED

 S. 1680                            10
 
 SIXTY-TWO  OF THIS ARTICLE FOR SUCH TAXABLE YEAR. A CORPORATION THAT WAS
 IN EXISTENCE BEFORE JANUARY FIRST, TWO THOUSAND THREE BUT FIRST  BECOMES
 A  TAXPAYER  IN  A TAXABLE YEAR BEGINNING ON OR AFTER JANUARY FIRST, TWO
 THOUSAND  THREE  AND  BEFORE  JANUARY FIRST, TWO THOUSAND FOUR, SHALL BE
 CONSIDERED FOR PURPOSES OF THIS PARAGRAPH TO HAVE BEEN  SUBJECT  TO  TAX
 UNDER ARTICLE NINE-A OF THIS CHAPTER FOR ITS LAST TAXABLE YEAR BEGINNING
 BEFORE  JANUARY FIRST, TWO THOUSAND THREE IF SUCH CORPORATION WOULD HAVE
 BEEN SUBJECT TO TAX UNDER SUCH ARTICLE FOR SUCH TAXABLE YEAR IF  IT  HAD
 BEEN  A  TAXPAYER  DURING  SUCH  TAXABLE YEAR. A CORPORATION THAT WAS IN
 EXISTENCE BEFORE JANUARY FIRST, TWO THOUSAND THREE BUT FIRST  BECOMES  A
 TAXPAYER  IN  A  TAXABLE  YEAR  BEGINNING ON OR AFTER JANUARY FIRST, TWO
 THOUSAND THREE AND BEFORE JANUARY FIRST, TWO  THOUSAND  FOUR,  SHALL  BE
 CONSIDERED  FOR  PURPOSES  OF THIS PARAGRAPH TO HAVE BEEN SUBJECT TO TAX
 UNDER THIS ARTICLE FOR ITS LAST TAXABLE YEAR  BEGINNING  BEFORE  JANUARY
 FIRST, TWO THOUSAND THREE IF SUCH CORPORATION WOULD HAVE BEEN SUBJECT TO
 TAX  UNDER  THIS ARTICLE FOR SUCH TAXABLE YEAR IF IT HAD BEEN A TAXPAYER
 DURING SUCH TAXABLE YEAR.
   (2) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS SECTION
 OTHER THAN SUBSECTION (N) OF THIS SECTION, A CORPORATION  FORMED  ON  OR
 AFTER  JANUARY  FIRST,  TWO THOUSAND THREE AND BEFORE JANUARY FIRST, TWO
 THOUSAND FOUR MAY ELECT TO BE SUBJECT TO TAX UNDER THIS ARTICLE OR UNDER
 ARTICLE NINE-A OF THIS CHAPTER FOR ITS FIRST TAXABLE YEAR  BEGINNING  ON
 OR AFTER JANUARY FIRST, TWO THOUSAND THREE AND BEFORE JANUARY FIRST, TWO
 THOUSAND  FOUR  IN  WHICH  EITHER  (I) SIXTY-FIVE PERCENT OR MORE OF ITS
 VOTING STOCK IS OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY BY A  FINAN-
 CIAL  HOLDING COMPANY, PROVIDED THE CORPORATION WHOSE VOTING STOCK IS SO
 OWNED OR CONTROLLED  IS  PRINCIPALLY  ENGAGED  IN  ACTIVITIES  THAT  ARE
 DESCRIBED  IN  SECTION  4(K)(4)  OR  4(K)(5) OF THE FEDERAL BANK HOLDING
 COMPANY ACT OF NINETEEN HUNDRED FIFTY-SIX,  AS  AMENDED  AND  THE  REGU-
 LATIONS  PROMULGATED  PURSUANT TO THE AUTHORITY OF SUCH SECTION, OR (II)
 IT IS A FINANCIAL SUBSIDIARY.
   AN ELECTION UNDER THIS PARAGRAPH MAY NOT  BE  MADE  BY  A  CORPORATION
 DESCRIBED  IN  PARAGRAPHS  ONE  THROUGH  EIGHT OF SUBSECTION (A) OF THIS
 SECTION OR IN SUBSECTION (E) OF THIS SECTION. IN ADDITION,  AN  ELECTION
 UNDER THIS PARAGRAPH MAY NOT BE MADE BY A CORPORATION THAT IS A PARTY TO
 A  REORGANIZATION,  AS  DEFINED  IN SUBSECTION (A) OF SECTION 368 OF THE
 INTERNAL REVENUE CODE OF 1986, AS AMENDED, OF A CORPORATION DESCRIBED IN
 PARAGRAPH ONE OF THIS SUBSECTION IF BOTH  CORPORATIONS  WERE  SIXTY-FIVE
 PERCENT OR MORE OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY, BY THE SAME
 INTERESTS  AT  THE  TIME  OF  THE REORGANIZATION. AN ELECTION UNDER THIS
 PARAGRAPH MUST BE MADE BY THE TAXPAYER ON OR BEFORE  THE  DUE  DATE  FOR
 FILING  ITS  RETURN  (DETERMINED  WITH  REGARD TO EXTENSIONS OF TIME FOR
 FILING) FOR THE APPLICABLE TAXABLE YEAR. THE ELECTION TO BE TAXED  UNDER
 ARTICLE  NINE-A  OF THIS CHAPTER SHALL BE MADE BY THE TAXPAYER BY FILING
 THE REPORT REQUIRED PURSUANT TO SECTION TWO HUNDRED ELEVEN OF THIS CHAP-
 TER AND THE ELECTION TO BE TAXED UNDER THIS ARTICLE SHALL BE MADE BY THE
 TAXPAYER BY FILING THE RETURN  REQUIRED  PURSUANT  TO  SECTION  FOURTEEN
 HUNDRED  SIXTY-TWO  OF  THIS ARTICLE. ANY ELECTION MADE PURSUANT TO THIS
 PARAGRAPH SHALL BE IRREVOCABLE AND SHALL APPLY TO EACH SUBSEQUENT  TAXA-
 BLE  YEAR  BEGINNING  ON  OR AFTER JANUARY FIRST, TWO THOUSAND THREE AND
 BEFORE JANUARY FIRST, TWO THOUSAND FOUR, PROVIDED THAT THE STOCK  OWNER-
 SHIP  REQUIREMENTS  DESCRIBED  IN SUBPARAGRAPH (I) OF THIS PARAGRAPH ARE
 MET OR SUCH CORPORATION DESCRIBED IN SUBPARAGRAPH (II) OF THIS PARAGRAPH
 CONTINUES AS A FINANCIAL SUBSIDIARY.
   (3) FOR PURPOSES OF THIS  SECTION,  A  FINANCIAL  SUBSIDIARY  MEANS  A
 CORPORATION  (I)  SIXTY-FIVE  PERCENT  OR  MORE OF WHOSE VOTING STOCK IS

 S. 1680                            11
 
 OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY  BY  A  BANKING  CORPORATION
 DESCRIBED  IN  PARAGRAPH  ONE,  TWO  OR  THREE OF SUBSECTION (A) OF THIS
 SECTION AND (II) IS DESCRIBED IN SECTION 5136A(G) OF THE  REVISED  STAT-
 UTES OF THE UNITED STATES OR SECTION 46 OF THE FEDERAL DEPOSIT INSURANCE
 ACT.  FOR PURPOSES OF THIS ARTICLE, THE TERM "BANKING CORPORATION" SHALL
 INCLUDE A CORPORATION ELECTING TO BE TAXED UNDER THIS  ARTICLE  PURSUANT
 TO  PARAGRAPH  TWO OF THIS SUBSECTION FOR SO LONG AS SUCH ELECTION SHALL
 BE IN EFFECT.
   (K) TRANSITIONAL PROVISIONS RELATING TO THE ENACTMENT AND  IMPLEMENTA-
 TION OF THE FEDERAL GRAMM-LEACH-BLILEY ACT. (1) NOTWITHSTANDING ANYTHING
 TO  THE  CONTRARY CONTAINED IN THIS SECTION OTHER THAN SUBSECTION (N) OF
 THIS SECTION, A CORPORATION THAT WAS IN EXISTENCE BEFORE JANUARY  FIRST,
 TWO  THOUSAND  FOUR  AND WAS SUBJECT TO TAX UNDER ARTICLE NINE-A OF THIS
 CHAPTER FOR ITS LAST TAXABLE YEAR BEGINNING BEFORE  JANUARY  FIRST,  TWO
 THOUSAND  FOUR,  SHALL  CONTINUE TO BE TAXABLE UNDER SUCH ARTICLE NINE-A
 FOR ALL TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO  THOUSAND
 FOUR  AND BEFORE JANUARY FIRST, TWO THOUSAND SIX. THE PRECEDING SENTENCE
 SHALL NOT APPLY TO ANY TAXABLE YEAR DURING WHICH SUCH CORPORATION  IS  A
 BANKING  CORPORATION  DESCRIBED  IN  PARAGRAPHS  ONE  THROUGH  EIGHT  OF
 SUBSECTION (A) OF THIS SECTION. NOTWITHSTANDING ANYTHING TO THE CONTRARY
 CONTAINED IN THIS SECTION OTHER THAN SUBSECTION (N) OF THIS  SECTION,  A
 BANKING  CORPORATION  THAT  WAS  IN  EXISTENCE BEFORE JANUARY FIRST, TWO
 THOUSAND FOUR AND WAS SUBJECT TO TAX UNDER THIS  ARTICLE  FOR  ITS  LAST
 TAXABLE  YEAR  BEGINNING  BEFORE JANUARY FIRST, TWO THOUSAND FOUR, SHALL
 CONTINUE TO BE TAXABLE UNDER THIS ARTICLE FOR ALL TAXABLE  YEARS  BEGIN-
 NING  ON  OR  AFTER  JANUARY FIRST, TWO THOUSAND FOUR AND BEFORE JANUARY
 FIRST, TWO  THOUSAND  SIX.  PROVIDED,  HOWEVER,  THAT  NOTHING  IN  THIS
 SUBSECTION  SHALL  PROHIBIT  A  CORPORATION  THAT  ELECTED  PURSUANT  TO
 SUBSECTION (D) OF THIS SECTION TO BE TAXABLE  UNDER  ARTICLE  NINE-A  OF
 THIS  CHAPTER  FROM  REVOKING  THAT  ELECTION  IN  ACCORDANCE  WITH SUCH
 SUBSECTION (D).
   FOR PURPOSES OF THIS PARAGRAPH, A CORPORATION SHALL BE  CONSIDERED  TO
 BE  SUBJECT  TO  TAX  UNDER ARTICLE NINE-A OF THIS CHAPTER FOR A TAXABLE
 YEAR IF SUCH CORPORATION WAS NOT A TAXPAYER BUT WAS PROPERLY INCLUDED IN
 A COMBINED REPORT FILED PURSUANT TO SECTION TWO HUNDRED ELEVEN  OF  THIS
 CHAPTER  FOR  SUCH TAXABLE YEAR AND A CORPORATION SHALL BE CONSIDERED TO
 BE SUBJECT TO TAX UNDER THIS ARTICLE FOR A TAXABLE YEAR IF  SUCH  CORPO-
 RATION WAS NOT A TAXPAYER BUT WAS PROPERLY INCLUDED IN A COMBINED RETURN
 FILED  PURSUANT  TO  SUBSECTION  (F)  OR (G) OF SECTION FOURTEEN HUNDRED
 SIXTY-TWO OF THIS ARTICLE FOR SUCH TAXABLE YEAR. A CORPORATION THAT  WAS
 IN EXISTENCE BEFORE JANUARY FIRST, TWO THOUSAND FOUR BUT FIRST BECOMES A
 TAXPAYER  IN  A  TAXABLE  YEAR  BEGINNING ON OR AFTER JANUARY FIRST, TWO
 THOUSAND FOUR AND BEFORE JANUARY  FIRST,  TWO  THOUSAND  SIX,  SHALL  BE
 CONSIDERED  FOR  PURPOSES  OF THIS PARAGRAPH TO HAVE BEEN SUBJECT TO TAX
 UNDER ARTICLE NINE-A OF THIS CHAPTER FOR ITS LAST TAXABLE YEAR BEGINNING
 BEFORE JANUARY FIRST, TWO THOUSAND FOUR, IF SUCH CORPORATION WOULD  HAVE
 BEEN  SUBJECT  TO TAX UNDER SUCH ARTICLE FOR SUCH TAXABLE YEAR IF IT HAD
 BEEN A TAXPAYER DURING SUCH TAXABLE YEAR.  A  CORPORATION  THAT  WAS  IN
 EXISTENCE  BEFORE  JANUARY FIRST, TWO THOUSAND FOUR, BUT FIRST BECOMES A
 TAXPAYER IN A TAXABLE YEAR BEGINNING ON  OR  AFTER  JANUARY  FIRST,  TWO
 THOUSAND  FOUR  AND  BEFORE  JANUARY  FIRST,  TWO THOUSAND SIX, SHALL BE
 CONSIDERED FOR PURPOSES OF THIS PARAGRAPH TO HAVE BEEN  SUBJECT  TO  TAX
 UNDER  THIS  ARTICLE  FOR ITS LAST TAXABLE YEAR BEGINNING BEFORE JANUARY
 FIRST, TWO THOUSAND FOUR IF SUCH CORPORATION WOULD HAVE BEEN SUBJECT  TO
 TAX  UNDER  THIS ARTICLE FOR SUCH TAXABLE YEAR IF IT HAD BEEN A TAXPAYER
 DURING SUCH TAXABLE YEAR.

 S. 1680                            12
 
   (2) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS SECTION
 OTHER THAN SUBSECTION (N) OF THIS SECTION, A CORPORATION  FORMED  ON  OR
 AFTER  JANUARY  FIRST,  TWO  THOUSAND FOUR AND BEFORE JANUARY FIRST, TWO
 THOUSAND SIX MAY ELECT TO BE SUBJECT TO TAX UNDER THIS ARTICLE OR  UNDER
 ARTICLE  NINE-A  OF THIS CHAPTER FOR ITS FIRST TAXABLE YEAR BEGINNING ON
 OR AFTER JANUARY FIRST, TWO THOUSAND FOUR AND BEFORE JANUARY FIRST,  TWO
 THOUSAND  SIX  IN  WHICH  EITHER  (I)  SIXTY-FIVE PERCENT OR MORE OF ITS
 VOTING STOCK IS OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY BY A  FINAN-
 CIAL  HOLDING COMPANY, PROVIDED THE CORPORATION WHOSE VOTING STOCK IS SO
 OWNED OR CONTROLLED  IS  PRINCIPALLY  ENGAGED  IN  ACTIVITIES  THAT  ARE
 DESCRIBED  IN  SECTION  4(K)(4)  OR  4(K)(5) OF THE FEDERAL BANK HOLDING
 COMPANY ACT OF NINETEEN HUNDRED FIFTY-SIX,  AS  AMENDED  AND  THE  REGU-
 LATIONS  PROMULGATED  PURSUANT TO THE AUTHORITY OF SUCH SECTION, OR (II)
 IT IS A FINANCIAL SUBSIDIARY.
   AN ELECTION UNDER THIS PARAGRAPH MAY NOT  BE  MADE  BY  A  CORPORATION
 DESCRIBED  IN  PARAGRAPHS  ONE  THROUGH  EIGHT OF SUBSECTION (A) OF THIS
 SECTION OR IN SUBSECTION (E) OF THIS SECTION. IN ADDITION,  AN  ELECTION
 UNDER THIS PARAGRAPH MAY NOT BE MADE BY A CORPORATION THAT IS A PARTY TO
 A  REORGANIZATION, AS DEFINED IN SUBSECTION (A) OF SECTION THREE HUNDRED
 SIXTY-EIGHT OF THE INTERNAL REVENUE  CODE  OF  NINETEEN  EIGHTY-SIX,  AS
 AMENDED,  OF A CORPORATION DESCRIBED IN PARAGRAPH ONE OF THIS SUBSECTION
 IF  BOTH  CORPORATIONS  WERE  SIXTY-FIVE  PERCENT  OR  MORE   OWNED   OR
 CONTROLLED, DIRECTLY OR INDIRECTLY, BY THE SAME INTERESTS AT THE TIME OF
 THE REORGANIZATION. AN ELECTION UNDER THIS PARAGRAPH MUST BE MADE BY THE
 TAXPAYER  ON  OR  BEFORE  THE DUE DATE FOR FILING ITS RETURN (DETERMINED
 WITH REGARD TO EXTENSIONS OF TIME FOR FILING) FOR THE APPLICABLE TAXABLE
 YEAR. THE ELECTION TO BE TAXED UNDER  ARTICLE  NINE-A  OF  THIS  CHAPTER
 SHALL  BE MADE BY THE TAXPAYER BY FILING THE REPORT REQUIRED PURSUANT TO
 SECTION TWO HUNDRED ELEVEN OF THIS CHAPTER AND THE ELECTION TO BE  TAXED
 UNDER  THIS  ARTICLE  SHALL BE MADE BY THE TAXPAYER BY FILING THE RETURN
 REQUIRED PURSUANT TO SECTION FOURTEEN HUNDRED SIXTY-TWO OF THIS ARTICLE.
 ANY ELECTION MADE PURSUANT TO THIS PARAGRAPH SHALL  BE  IRREVOCABLE  AND
 SHALL  APPLY TO EACH SUBSEQUENT TAXABLE YEAR BEGINNING ON OR AFTER JANU-
 ARY FIRST, TWO THOUSAND FOUR AND BEFORE JANUARY FIRST, TWO THOUSAND SIX,
 PROVIDED THAT THE STOCK OWNERSHIP REQUIREMENTS DESCRIBED IN SUBPARAGRAPH
 (I) OF THIS PARAGRAPH ARE MET OR SUCH CORPORATION DESCRIBED IN  SUBPARA-
 GRAPH (II) OF THIS PARAGRAPH CONTINUES AS A FINANCIAL SUBSIDIARY.
   (3)  FOR  PURPOSES  OF  THIS  SECTION,  A FINANCIAL SUBSIDIARY MEANS A
 CORPORATION (I) SIXTY-FIVE PERCENT OR MORE  OF  WHOSE  VOTING  STOCK  IS
 OWNED  OR  CONTROLLED,  DIRECTLY  OR INDIRECTLY BY A BANKING CORPORATION
 DESCRIBED IN PARAGRAPH ONE, TWO OR  THREE  OF  SUBSECTION  (A)  OF  THIS
 SECTION  AND  (II) IS DESCRIBED IN SECTION 5136A(G) OF THE REVISED STAT-
 UTES OF THE UNITED STATES OR SECTION FORTY-SIX OF  THE  FEDERAL  DEPOSIT
 INSURANCE  ACT.  FOR  PURPOSES OF THIS ARTICLE, THE TERM "BANKING CORPO-
 RATION" SHALL INCLUDE A CORPORATION ELECTING  TO  BE  TAXED  UNDER  THIS
 ARTICLE PURSUANT TO PARAGRAPH TWO OF THIS SUBSECTION FOR SO LONG AS SUCH
 ELECTION SHALL BE IN EFFECT.
   (L)  TRANSITIONAL PROVISIONS RELATING TO THE ENACTMENT AND IMPLEMENTA-
 TION OF THE FEDERAL GRAMM-LEACH-BLILEY ACT. (1) NOTWITHSTANDING ANYTHING
 TO THE CONTRARY CONTAINED IN THIS SECTION OTHER THAN SUBSECTION  (N)  OF
 THIS  SECTION, A CORPORATION THAT WAS IN EXISTENCE BEFORE JANUARY FIRST,
 TWO THOUSAND SIX AND WAS SUBJECT TO TAX UNDER  ARTICLE  NINE-A  OF  THIS
 CHAPTER  FOR  ITS  LAST TAXABLE YEAR BEGINNING BEFORE JANUARY FIRST, TWO
 THOUSAND SIX, SHALL CONTINUE TO BE TAXABLE UNDER ARTICLE NINE-A FOR  ALL
 TAXABLE  YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND SIX AND
 BEFORE JANUARY FIRST, TWO THOUSAND EIGHT. THE PRECEDING  SENTENCE  SHALL

 S. 1680                            13
 
 NOT APPLY TO ANY TAXABLE YEAR DURING WHICH SUCH CORPORATION IS A BANKING
 CORPORATION  DESCRIBED IN PARAGRAPHS ONE THROUGH EIGHT OF SUBSECTION (A)
 OF THIS SECTION. NOTWITHSTANDING ANYTHING TO THE CONTRARY  CONTAINED  IN
 THIS SECTION OTHER THAN SUBSECTION (N) OF THIS SECTION, A BANKING CORPO-
 RATION  THAT WAS IN EXISTENCE BEFORE JANUARY FIRST, TWO THOUSAND SIX AND
 WAS SUBJECT TO TAX UNDER THIS ARTICLE FOR ITS LAST TAXABLE  YEAR  BEGIN-
 NING  BEFORE JANUARY FIRST, TWO THOUSAND SIX, SHALL CONTINUE TO BE TAXA-
 BLE UNDER THIS ARTICLE FOR ALL TAXABLE YEARS BEGINNING ON OR AFTER JANU-
 ARY FIRST, TWO THOUSAND SIX  AND  BEFORE  JANUARY  FIRST,  TWO  THOUSAND
 EIGHT. PROVIDED, HOWEVER, THAT NOTHING IN THIS SUBSECTION SHALL PROHIBIT
 A CORPORATION THAT ELECTED PURSUANT TO SUBSECTION (D) OF THIS SECTION TO
 BE  TAXABLE  UNDER  ARTICLE  NINE-A  OF  THIS CHAPTER FROM REVOKING THAT
 ELECTION IN ACCORDANCE WITH SUCH SUBSECTION (D).
   FOR PURPOSES OF THIS PARAGRAPH, A CORPORATION SHALL BE  CONSIDERED  TO
 BE  SUBJECT  TO  TAX  UNDER ARTICLE NINE-A OF THIS CHAPTER FOR A TAXABLE
 YEAR IF SUCH CORPORATION WAS NOT A TAXPAYER BUT WAS PROPERLY INCLUDED IN
 A COMBINED REPORT FILED PURSUANT TO SECTION TWO HUNDRED ELEVEN  OF  THIS
 CHAPTER  FOR  SUCH TAXABLE YEAR AND A CORPORATION SHALL BE CONSIDERED TO
 BE SUBJECT TO TAX UNDER THIS ARTICLE FOR A TAXABLE YEAR IF  SUCH  CORPO-
 RATION WAS NOT A TAXPAYER BUT WAS PROPERLY INCLUDED IN A COMBINED RETURN
 FILED  PURSUANT  TO  SUBSECTION  (F)  OR (G) OF SECTION FOURTEEN HUNDRED
 SIXTY-TWO OF THIS ARTICLE FOR SUCH TAXABLE YEAR. A CORPORATION THAT  WAS
 IN  EXISTENCE BEFORE JANUARY FIRST, TWO THOUSAND SIX BUT FIRST BECOMES A
 TAXPAYER IN A TAXABLE YEAR BEGINNING ON  OR  AFTER  JANUARY  FIRST,  TWO
 THOUSAND  SIX  AND  BEFORE  JANUARY  FIRST, TWO THOUSAND EIGHT, SHALL BE
 CONSIDERED FOR PURPOSES OF THIS PARAGRAPH TO HAVE BEEN  SUBJECT  TO  TAX
 UNDER ARTICLE NINE-A OF THIS CHAPTER FOR ITS LAST TAXABLE YEAR BEGINNING
 BEFORE  JANUARY  FIRST,  TWO THOUSAND SIX IF SUCH CORPORATION WOULD HAVE
 BEEN SUBJECT TO TAX UNDER SUCH ARTICLE FOR SUCH TAXABLE YEAR IF  IT  HAD
 BEEN  A  TAXPAYER  DURING  SUCH  TAXABLE YEAR. A CORPORATION THAT WAS IN
 EXISTENCE BEFORE JANUARY FIRST, TWO THOUSAND SIX  BUT  FIRST  BECOMES  A
 TAXPAYER  IN  A  TAXABLE  YEAR  BEGINNING ON OR AFTER JANUARY FIRST, TWO
 THOUSAND SIX AND BEFORE JANUARY FIRST,  TWO  THOUSAND  EIGHT,  SHALL  BE
 CONSIDERED  FOR  PURPOSES  OF THIS PARAGRAPH TO HAVE BEEN SUBJECT TO TAX
 UNDER THIS ARTICLE FOR ITS LAST TAXABLE YEAR  BEGINNING  BEFORE  JANUARY
 FIRST,  TWO  THOUSAND SIX IF SUCH CORPORATION WOULD HAVE BEEN SUBJECT TO
 TAX UNDER THIS ARTICLE FOR SUCH TAXABLE YEAR IF IT HAD BEEN  A  TAXPAYER
 DURING SUCH TAXABLE YEAR.
   (2) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS SECTION
 OTHER  THAN  SUBSECTION  (N) OF THIS SECTION, A CORPORATION FORMED ON OR
 AFTER JANUARY FIRST, TWO THOUSAND SIX  AND  BEFORE  JANUARY  FIRST,  TWO
 THOUSAND  EIGHT  MAY  ELECT  TO  BE SUBJECT TO TAX UNDER THIS ARTICLE OR
 UNDER ARTICLE NINE-A OF THIS CHAPTER FOR ITS FIRST TAXABLE  YEAR  BEGIN-
 NING  ON  OR  AFTER  JANUARY  FIRST, TWO THOUSAND SIX AND BEFORE JANUARY
 FIRST, TWO THOUSAND EIGHT IN WHICH EITHER (I) SIXTY-FIVE PERCENT OR MORE
 OF ITS VOTING STOCK IS OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY BY  A
 FINANCIAL  HOLDING  COMPANY, PROVIDED THE CORPORATION WHOSE VOTING STOCK
 IS SO OWNED OR CONTROLLED IS PRINCIPALLY ENGAGED IN ACTIVITIES THAT  ARE
 DESCRIBED  IN  SECTION  4(K)(4)  OR  4(K)(5) OF THE FEDERAL BANK HOLDING
 COMPANY ACT OF NINETEEN HUNDRED FIFTY-SIX,  AS  AMENDED  AND  THE  REGU-
 LATIONS  PROMULGATED  PURSUANT TO THE AUTHORITY OF SUCH SECTION, OR (II)
 IT IS A FINANCIAL SUBSIDIARY. AN ELECTION UNDER THIS PARAGRAPH  MAY  NOT
 BE  MADE  BY  A CORPORATION DESCRIBED IN PARAGRAPHS ONE THROUGH EIGHT OF
 SUBSECTION (A) OF THIS SECTION OR IN SUBSECTION (E) OF THIS SECTION.  IN
 ADDITION, AN ELECTION UNDER THIS PARAGRAPH MAY NOT BE MADE BY  A  CORPO-
 RATION THAT IS A PARTY TO A REORGANIZATION, AS DEFINED IN SUBSECTION (A)

 S. 1680                            14
 
 OF  SECTION  368  OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, OF A
 CORPORATION DESCRIBED IN PARAGRAPH ONE OF THIS SUBSECTION IF BOTH CORPO-
 RATIONS WERE SIXTY-FIVE PERCENT OR MORE OWNED OR CONTROLLED, DIRECTLY OR
 INDIRECTLY, BY THE SAME INTERESTS AT THE TIME OF THE REORGANIZATION.
   AN  ELECTION  UNDER  THIS PARAGRAPH MUST BE MADE BY THE TAXPAYER ON OR
 BEFORE THE DUE DATE FOR FILING ITS RETURN  (DETERMINED  WITH  REGARD  TO
 EXTENSIONS  OF  TIME  FOR  FILING)  FOR THE APPLICABLE TAXABLE YEAR. THE
 ELECTION TO BE TAXED UNDER ARTICLE NINE-A OF THIS CHAPTER SHALL BE  MADE
 BY  THE  TAXPAYER  BY FILING THE REPORT REQUIRED PURSUANT TO SECTION TWO
 HUNDRED ELEVEN OF THIS CHAPTER AND THE ELECTION TO BE TAXED  UNDER  THIS
 ARTICLE  SHALL  BE  MADE  BY  THE TAXPAYER BY FILING THE RETURN REQUIRED
 PURSUANT TO SECTION FOURTEEN HUNDRED  SIXTY-TWO  OF  THIS  ARTICLE.  ANY
 ELECTION  MADE PURSUANT TO THIS PARAGRAPH SHALL BE IRREVOCABLE AND SHALL
 APPLY TO EACH SUBSEQUENT TAXABLE YEAR  BEGINNING  ON  OR  AFTER  JANUARY
 FIRST,  TWO  THOUSAND  SIX AND BEFORE JANUARY FIRST, TWO THOUSAND EIGHT,
 PROVIDED THAT THE STOCK OWNERSHIP REQUIREMENTS DESCRIBED IN SUBPARAGRAPH
 (I) OF THIS PARAGRAPH ARE MET OR SUCH CORPORATION DESCRIBED IN  SUBPARA-
 GRAPH (II) OF THIS PARAGRAPH CONTINUES AS A FINANCIAL SUBSIDIARY.
   (3)  FOR  PURPOSES  OF  THIS  SECTION,  A FINANCIAL SUBSIDIARY MEANS A
 CORPORATION (I) SIXTY-FIVE PERCENT OR MORE  OF  WHOSE  VOTING  STOCK  IS
 OWNED  OR  CONTROLLED,  DIRECTLY  OR INDIRECTLY BY A BANKING CORPORATION
 DESCRIBED IN PARAGRAPH ONE, TWO OR  THREE  OF  SUBSECTION  (A)  OF  THIS
 SECTION  AND  (II) IS DESCRIBED IN SECTION 5136A(G) OF THE REVISED STAT-
 UTES OF THE UNITED STATES OR SECTION 46 OF THE FEDERAL DEPOSIT INSURANCE
 ACT. FOR PURPOSES OF THIS ARTICLE, THE TERM "BANKING CORPORATION"  SHALL
 INCLUDE  A  CORPORATION ELECTING TO BE TAXED UNDER THIS ARTICLE PURSUANT
 TO PARAGRAPH TWO OF THIS SUBSECTION FOR SO LONG AS SUCH  ELECTION  SHALL
 BE IN EFFECT.
   (M)  TRANSITIONAL PROVISIONS RELATING TO THE ENACTMENT AND IMPLEMENTA-
 TION  OF  THE  FEDERAL  GRAMM-LEACH-BLILEY  ACT.    (1)  NOTWITHSTANDING
 ANYTHING TO THE CONTRARY CONTAINED IN THIS SECTION OTHER THAN SUBSECTION
 (N)  OF THIS SECTION, A CORPORATION THAT WAS IN EXISTENCE BEFORE JANUARY
 FIRST, TWO THOUSAND TWELVE AND WAS SUBJECT TO TAX UNDER  ARTICLE  NINE-A
 OF  THIS  CHAPTER  FOR  ITS  LAST  TAXABLE YEAR BEGINNING BEFORE JANUARY
 FIRST, TWO THOUSAND TWELVE, SHALL CONTINUE  TO  BE  TAXABLE  UNDER  SUCH
 ARTICLE  FOR  ALL TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO
 THOUSAND TWELVE AND BEFORE JANUARY FIRST,  TWO  THOUSAND  NINETEEN.  THE
 PRECEDING SENTENCE SHALL NOT APPLY TO ANY TAXABLE YEAR DURING WHICH SUCH
 CORPORATION IS A BANKING CORPORATION DESCRIBED IN PARAGRAPHS ONE THROUGH
 EIGHT  OF  SUBSECTION  (A) OF THIS SECTION.  NOTWITHSTANDING ANYTHING TO
 THE CONTRARY CONTAINED IN THIS SECTION OTHER THAN SUBSECTION (N) OF THIS
 SECTION, A BANKING CORPORATION OR  CORPORATION  THAT  WAS  IN  EXISTENCE
 BEFORE  JANUARY  FIRST, TWO THOUSAND TWELVE AND WAS SUBJECT TO TAX UNDER
 THIS ARTICLE FOR ITS LAST TAXABLE YEAR BEGINNING BEFORE  JANUARY  FIRST,
 TWO THOUSAND TWELVE, SHALL CONTINUE TO BE TAXABLE UNDER THIS ARTICLE FOR
 ALL  TAXABLE  YEARS  BEGINNING  ON  OR AFTER JANUARY FIRST, TWO THOUSAND
 TWELVE AND BEFORE JANUARY FIRST,  TWO  THOUSAND  NINETEEN  ONLY  IF  THE
 CORPORATION  IS  A  BANKING  CORPORATION AS DEFINED IN SUBSECTION (A) OF
 THIS SECTION OR THE CORPORATION SATISFIES THE REQUIREMENTS FOR A  CORPO-
 RATION TO ELECT TO BE TAXABLE UNDER THIS ARTICLE. PROVIDED FURTHER, THAT
 NOTHING  IN  THIS  SUBSECTION  SHALL PROHIBIT A CORPORATION THAT ELECTED
 PURSUANT TO SUBSECTION (D) OF THIS SECTION TO BE TAXABLE  UNDER  ARTICLE
 NINE-A  OF  THIS  CHAPTER FROM REVOKING THAT ELECTION IN ACCORDANCE WITH
 SUCH SUBSECTION (D).
   FOR PURPOSES OF THIS PARAGRAPH, A CORPORATION SHALL BE  CONSIDERED  TO
 BE  SUBJECT  TO  TAX  UNDER ARTICLE NINE-A OF THIS CHAPTER FOR A TAXABLE

 S. 1680                            15
 
 YEAR IF SUCH CORPORATION WAS NOT A TAXPAYER BUT WAS PROPERLY INCLUDED IN
 A COMBINED REPORT FILED PURSUANT TO SECTION TWO HUNDRED ELEVEN  OF  THIS
 CHAPTER  FOR  SUCH TAXABLE YEAR AND A CORPORATION SHALL BE CONSIDERED TO
 BE  SUBJECT  TO TAX UNDER THIS ARTICLE FOR A TAXABLE YEAR IF SUCH CORPO-
 RATION WAS NOT A TAXPAYER BUT WAS PROPERLY INCLUDED IN A COMBINED RETURN
 FILED PURSUANT TO SUBSECTION (F) OR  (G)  OF  SECTION  FOURTEEN  HUNDRED
 SIXTY-TWO  OF THIS ARTICLE FOR SUCH TAXABLE YEAR. A CORPORATION THAT WAS
 IN EXISTENCE BEFORE JANUARY FIRST, TWO THOUSAND TWELVE BUT FIRST BECOMES
 A TAXPAYER IN A TAXABLE YEAR BEGINNING ON OR AFTER  JANUARY  FIRST,  TWO
 THOUSAND  TWELVE  AND BEFORE JANUARY FIRST, TWO THOUSAND NINETEEN, SHALL
 BE CONSIDERED FOR PURPOSES OF THIS PARAGRAPH TO HAVE BEEN SUBJECT TO TAX
 UNDER ARTICLE NINE-A OF THIS CHAPTER FOR ITS LAST TAXABLE YEAR BEGINNING
 BEFORE JANUARY FIRST, TWO THOUSAND TWELVE IF SUCH CORPORATION WOULD HAVE
 BEEN SUBJECT TO TAX UNDER SUCH ARTICLE FOR SUCH TAXABLE YEAR IF  IT  HAD
 BEEN  A  TAXPAYER  DURING  SUCH  TAXABLE YEAR. A CORPORATION THAT WAS IN
 EXISTENCE BEFORE JANUARY FIRST, TWO THOUSAND TWELVE BUT FIRST BECOMES  A
 TAXPAYER  IN  A  TAXABLE  YEAR  BEGINNING ON OR AFTER JANUARY FIRST, TWO
 THOUSAND TWELVE AND BEFORE JANUARY FIRST, TWO THOUSAND  NINETEEN,  SHALL
 BE CONSIDERED FOR PURPOSES OF THIS PARAGRAPH TO HAVE BEEN SUBJECT TO TAX
 UNDER  THIS  ARTICLE  FOR ITS LAST TAXABLE YEAR BEGINNING BEFORE JANUARY
 FIRST, TWO THOUSAND TWELVE IF SUCH CORPORATION WOULD HAVE  BEEN  SUBJECT
 TO TAX UNDER THIS ARTICLE FOR SUCH TAXABLE YEAR IF IT HAD BEEN A TAXPAY-
 ER DURING SUCH TAXABLE YEAR.
   (2) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS SECTION
 OTHER  THAN  SUBSECTION  (N) OF THIS SECTION, A CORPORATION FORMED ON OR
 AFTER JANUARY FIRST, TWO THOUSAND TWELVE AND BEFORE JANUARY  FIRST,  TWO
 THOUSAND  NINETEEN  MAY ELECT TO BE SUBJECT TO TAX UNDER THIS ARTICLE OR
 UNDER ARTICLE NINE-A OF THIS CHAPTER FOR ITS FIRST TAXABLE  YEAR  BEGIN-
 NING  ON  OR AFTER JANUARY FIRST, TWO THOUSAND TWELVE AND BEFORE JANUARY
 FIRST, TWO THOUSAND NINETEEN IN WHICH EITHER (I) SIXTY-FIVE  PERCENT  OR
 MORE  OF ITS VOTING STOCK IS OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY
 BY A FINANCIAL HOLDING COMPANY, PROVIDED THE  CORPORATION  WHOSE  VOTING
 STOCK  IS  SO  OWNED  OR CONTROLLED IS PRINCIPALLY ENGAGED IN ACTIVITIES
 THAT ARE DESCRIBED IN SECTION 4(K)(4) OR 4(K)(5)  OF  THE  FEDERAL  BANK
 HOLDING  COMPANY  ACT  OF NINETEEN HUNDRED FIFTY-SIX, AS AMENDED AND THE
 REGULATIONS PROMULGATED PURSUANT TO THE AUTHORITY OF  SUCH  SECTION,  OR
 (II)  IT IS A FINANCIAL SUBSIDIARY. AN ELECTION UNDER THIS PARAGRAPH MAY
 NOT BE MADE BY A CORPORATION DESCRIBED IN PARAGRAPHS ONE  THROUGH  EIGHT
 OF  SUBSECTION (A) OF THIS SECTION OR IN SUBSECTION (E) OF THIS SECTION.
 IN ADDITION, AN ELECTION UNDER THIS PARAGRAPH  MAY  NOT  BE  MADE  BY  A
 CORPORATION  THAT  IS  A  PARTY  TO  A  REORGANIZATION,  AS  DEFINED  IN
 SUBSECTION (A) OF SECTION 368 OF THE INTERNAL REVENUE CODE OF  1986,  AS
 AMENDED,  OF A CORPORATION DESCRIBED IN PARAGRAPH ONE OF THIS SUBSECTION
 IF  BOTH  CORPORATIONS  WERE  SIXTY-FIVE  PERCENT  OR  MORE   OWNED   OR
 CONTROLLED, DIRECTLY OR INDIRECTLY, BY THE SAME INTERESTS AT THE TIME OF
 THE REORGANIZATION.
   AN  ELECTION  UNDER  THIS PARAGRAPH MUST BE MADE BY THE TAXPAYER ON OR
 BEFORE THE DUE DATE FOR FILING ITS RETURN  (DETERMINED  WITH  REGARD  TO
 EXTENSIONS  OF  TIME  FOR  FILING)  FOR THE APPLICABLE TAXABLE YEAR. THE
 ELECTION TO BE TAXED UNDER ARTICLE NINE-A OF THIS CHAPTER SHALL BE  MADE
 BY  THE  TAXPAYER  BY FILING THE REPORT REQUIRED PURSUANT TO SECTION TWO
 HUNDRED ELEVEN OF THIS CHAPTER AND THE ELECTION TO BE TAXED  UNDER  THIS
 ARTICLE  SHALL  BE  MADE  BY  THE TAXPAYER BY FILING THE RETURN REQUIRED
 PURSUANT TO SECTION FOURTEEN HUNDRED  SIXTY-TWO  OF  THIS  ARTICLE.  ANY
 ELECTION  MADE PURSUANT TO THIS PARAGRAPH SHALL BE IRREVOCABLE AND SHALL
 APPLY TO EACH SUBSEQUENT TAXABLE YEAR  BEGINNING  ON  OR  AFTER  JANUARY

 S. 1680                            16
 
 FIRST,  TWO THOUSAND TWELVE AND BEFORE JANUARY FIRST, TWO THOUSAND NINE-
 TEEN, PROVIDED THAT THE  STOCK  OWNERSHIP  AND  ACTIVITIES  REQUIREMENTS
 DESCRIBED  IN  SUBPARAGRAPH (I) OF THIS PARAGRAPH ARE MET OR SUCH CORPO-
 RATION  DESCRIBED  IN SUBPARAGRAPH (II) OF THIS PARAGRAPH CONTINUES AS A
 FINANCIAL SUBSIDIARY.
   (3) FOR PURPOSES OF THIS  SECTION,  A  FINANCIAL  SUBSIDIARY  MEANS  A
 CORPORATION  (I)  SIXTY-FIVE  PERCENT  OR  MORE OF WHOSE VOTING STOCK IS
 OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY  BY  A  BANKING  CORPORATION
 DESCRIBED  IN  PARAGRAPH  ONE,  TWO  OR  THREE OF SUBSECTION (A) OF THIS
 SECTION AND (II) IS DESCRIBED IN SECTION 5136A(G) OF THE  REVISED  STAT-
 UTES OF THE UNITED STATES OR SECTION 46 OF THE FEDERAL DEPOSIT INSURANCE
 ACT.  FOR PURPOSES OF THIS ARTICLE, THE TERM "BANKING CORPORATION" SHALL
 INCLUDE A CORPORATION ELECTING TO BE TAXED UNDER THIS  ARTICLE  PURSUANT
 TO  PARAGRAPH  TWO OF THIS SUBSECTION FOR SO LONG AS SUCH ELECTION SHALL
 BE IN EFFECT.
   (4) THE PROVISIONS OF THIS SUBSECTION SHALL NOT  APPLY  TO  A  CAPTIVE
 REIT, A CAPTIVE RIC OR AN OVERCAPITALIZED CAPTIVE INSURANCE COMPANY.
   (N)(1)  NOTWITHSTANDING  ANYTHING  IN THIS ARTICLE TO THE CONTRARY, IF
 ANY OF THE CONDITIONS DESCRIBED IN PARAGRAPH THREE  OF  THIS  SUBSECTION
 APPLY  TO  A CORPORATION THAT HAS MADE EITHER THE ELECTION TO BE TAXABLE
 UNDER ARTICLE NINE-A OF THIS CHAPTER PURSUANT TO THE  GRAMM-LEACH-BLILEY
 TRANSITIONAL  PROVISIONS  IN  THIS  SECTION, OR THE ELECTION PURSUANT TO
 SUBSECTION (D) OF THIS SECTION TO CONTINUE TO BE TAXABLE  UNDER  ARTICLE
 NINE-A  OF  THIS  CHAPTER (HEREINAFTER THE "ELECTING CORPORATION"), THEN
 SUCH CORPORATION SHALL BE DEEMED TO HAVE REVOKED THE ELECTION AS OF  THE
 FIRST DAY OF THE TAXABLE YEAR IN WHICH SUCH CONDITION APPLIED.
   (2)  NOTWITHSTANDING  ANYTHING IN THIS ARTICLE TO THE CONTRARY, IF ANY
 OF THE CONDITIONS DESCRIBED IN PARAGRAPH THREE OF THIS SUBSECTION  APPLY
 TO  A  CORPORATION  REQUIRED  TO BE TAXABLE UNDER ARTICLE NINE-A OF THIS
 CHAPTER PURSUANT TO THE GRAMM-LEACH-BLILEY  TRANSITIONAL  PROVISIONS  IN
 THIS  SECTION (HEREINAFTER THE "GRANDFATHERED CORPORATION"), SUCH CORPO-
 RATION, IF IT IS OTHERWISE DESCRIBED IN SUBSECTION (A) OF THIS  SECTION,
 SHALL  BE  TAXABLE UNDER THIS ARTICLE AS OF THE FIRST DAY OF THE TAXABLE
 YEAR IN WHICH SUCH CONDITION APPLIED.
   (3) THE  PROVISIONS  OF  PARAGRAPH  ONE  AND  PARAGRAPH  TWO  OF  THIS
 SUBSECTION SHALL APPLY IF ANY OF THE FOLLOWING CONDITIONS EXIST OR OCCUR
 WITH  RESPECT  TO  THE  ELECTING CORPORATION OR THE GRANDFATHERED CORPO-
 RATION IN A TAXABLE YEAR (INCLUDING ANY SHORT TAXABLE YEAR) BEGINNING ON
 OR AFTER JANUARY FIRST, TWO THOUSAND SEVEN:
   (A) THE CORPORATION CEASES TO BE A TAXPAYER UNDER  ARTICLE  NINE-A  OF
 THIS CHAPTER;
   (B)  THE  CORPORATION  BECOMES SUBJECT TO THE FIXED DOLLAR MINIMUM TAX
 UNDER PARAGRAPH (D) OF SUBDIVISION ONE OF SECTION  TWO  HUNDRED  TEN  OF
 THIS CHAPTER;
   (C)  THE  CORPORATION  HAS  NO WAGES OR RECEIPTS ALLOCABLE TO NEW YORK
 STATE PURSUANT TO SUBDIVISION THREE OF SECTION TWO HUNDRED TEN  OF  THIS
 CHAPTER, OR IS OTHERWISE INACTIVE; PROVIDED THAT THIS SUBPARAGRAPH SHALL
 NOT  APPLY  TO A CORPORATION WHICH IS ENGAGED IN THE ACTIVE CONDUCT OF A
 TRADE OR BUSINESS, OR SUBSTANTIALLY ALL OF THE ASSETS OF WHICH ARE STOCK
 AND  SECURITIES  OF  CORPORATIONS  WHICH  ARE  DIRECTLY  OR   INDIRECTLY
 CONTROLLED  BY  IT  AND  ARE ENGAGED IN THE ACTIVE CONDUCT OF A TRADE OR
 BUSINESS;
   (D) SIXTY-FIVE PERCENT OR MORE OF THE VOTING STOCK OF THE  CORPORATION
 BECOMES  OWNED OR CONTROLLED DIRECTLY BY A CORPORATION THAT ACQUIRED THE
 STOCK IN A TRANSACTION (OR SERIES OF RELATED TRANSACTIONS)  THAT  QUALI-
 FIES  AS  A PURCHASE WITHIN THE MEANING OF PARAGRAPH THREE OF SUBSECTION

 S. 1680                            17

 (H) OF SECTION THREE HUNDRED THIRTY-EIGHT OF THE INTERNAL  REVENUE  CODE
 UNLESS  THE  CORPORATION  WHOSE  STOCK  WAS ACQUIRED AND THE CORPORATION
 ACQUIRING THE STOCK WERE, IMMEDIATELY PRIOR TO SUCH PURCHASE, MEMBERS OF
 THE  SAME  AFFILIATED  GROUP (AS SUCH TERM IS DEFINED IN SECTION FIFTEEN
 HUNDRED FOUR OF THE INTERNAL REVENUE CODE WITHOUT REGARD TO  THE  EXCLU-
 SIONS PROVIDED FOR IN SUBSECTION (B) OF SUCH SECTION); PROVIDED THAT ANY
 ACQUISITION  THAT WAS COMPLETED ON OR BEFORE JANUARY THIRD, TWO THOUSAND
 SEVEN SHALL BE TREATED FOR PURPOSES OF THIS SUBPARAGRAPH AS AN  ACQUISI-
 TION MADE BEFORE JANUARY FIRST, TWO THOUSAND SEVEN; OR
   (E)  THE  CORPORATION,  IN  A  TRANSACTION OR SERIES OF RELATED TRANS-
 ACTIONS, ACQUIRES ASSETS, WHETHER BY CONTRIBUTION, PURCHASE,  OR  OTHER-
 WISE, HAVING AN AVERAGE VALUE (DETERMINED IN ACCORDANCE WITH SUBDIVISION
 TWO OF SECTION TWO HUNDRED TEN OF THIS CHAPTER), OR, IF GREATER, A TOTAL
 TAX  BASIS,  IN  EXCESS  OF  FORTY  PERCENT OF THE AVERAGE VALUE, OR, IF
 GREATER, THE TOTAL TAX BASIS, OF ALL THE ASSETS OF THE CORPORATION IMME-
 DIATELY PRIOR TO SUCH ACQUISITION AND AS A RESULT  OF  SUCH  ACQUISITION
 THE  CORPORATION  IS PRINCIPALLY ENGAGED IN A BUSINESS THAT IS DIFFERENT
 FROM THE BUSINESS IMMEDIATELY PRIOR TO SUCH ACQUISITION,  PROVIDED  THAT
 SUCH  DIFFERENT BUSINESS IS DESCRIBED IN SUBPARAGRAPH (I), (II) OR (III)
 OF PARAGRAPH NINE OF SUBSECTION (A) OF THIS SECTION.
   § 1453. COMPUTATIONS OF ENTIRE NET INCOME. (A) ENTIRE NET INCOME MEANS
 TOTAL NET INCOME FROM ALL SOURCES WHICH SHALL BE THE SAME AS THE  ENTIRE
 TAXABLE INCOME (BUT NOT ALTERNATIVE MINIMUM TAXABLE INCOME).
   (1)  WHICH  THE  TAXPAYER  IS  REQUIRED TO REPORT TO THE UNITED STATES
 TREASURY DEPARTMENT, OR
   (2) WHICH THE TAXPAYER, IN THE CASE OF A CORPORATION WHICH  IS  EXEMPT
 FROM  FEDERAL INCOME TAX (OTHER THAN THE TAX ON UNRELATED BUSINESS TAXA-
 BLE INCOME IMPOSED UNDER SECTION 511 OF THE INTERNAL REVENUE  CODE)  BUT
 IS SUBJECT TO TAX UNDER THIS ARTICLE, WOULD HAVE BEEN REQUIRED TO REPORT
 TO THE UNITED STATES TREASURY DEPARTMENT BUT FOR SUCH EXEMPTION, OR
   (3)  WHICH, IN THE CASE OF A CORPORATION ORGANIZED UNDER THE LAWS OF A
 COUNTRY OTHER THAN THE UNITED STATES, IS EFFECTIVELY CONNECTED WITH  THE
 CONDUCT  OF  A  TRADE OR BUSINESS WITHIN THE UNITED STATES AS DETERMINED
 UNDER SECTION 882 OF THE INTERNAL REVENUE CODE SUBJECT TO THE  MODIFICA-
 TIONS AND ADJUSTMENTS HEREINAFTER PROVIDED, OR
   (4)  WHICH  THE  TAXPAYER  WOULD  HAVE  BEEN REQUIRED TO REPORT TO THE
 UNITED STATES TREASURY DEPARTMENT IF IT HAD NOT MADE THE ELECTION  UNDER
 SUBCHAPTER S OF CHAPTER ONE OF THE INTERNAL REVENUE CODE.
   (B)  ENTIRE  NET  INCOME  SHALL  BE  COMPUTED WITHOUT THE DEDUCTION OR
 EXCLUSION OF:
   (1) (A) IN THE CASE OF A CORPORATION ORGANIZED UNDER  THE  LAWS  OF  A
 COUNTRY  OTHER  THAN  THE UNITED STATES, (I) ANY PART OF ANY INCOME FROM
 DIVIDENDS OR INTEREST ON ANY KIND OF STOCK, SECURITIES OR  INDEBTEDNESS,
 BUT  ONLY  IF  SUCH  INCOME IS TREATED AS EFFECTIVELY CONNECTED WITH THE
 CONDUCT OF A TRADE OR BUSINESS IN THE UNITED STATES PURSUANT TO  SECTION
 EIGHT  HUNDRED  SIXTY-FOUR OF THE INTERNAL REVENUE CODE, (II) ANY INCOME
 EXEMPT FROM FEDERAL TAXABLE INCOME UNDER ANY TREATY  OBLIGATION  OF  THE
 UNITED  STATES,  BUT ONLY IF SUCH INCOME WOULD BE TREATED AS EFFECTIVELY
 CONNECTED IN ABSENCE OF SUCH EXEMPTION, PROVIDED THAT SUCH TREATY  OBLI-
 GATION  DOES  NOT  PRECLUDE  THE  TAXATION OF SUCH INCOME BY A STATE, OR
 (III) ANY INCOME WHICH WOULD BE TREATED AS EFFECTIVELY CONNECTED IF SUCH
 INCOME WERE NOT EXCLUDED FROM GROSS INCOME PURSUANT TO SUBSECTION (A) OF
 SECTION ONE HUNDRED THREE OF THE INTERNAL REVENUE CODE; (B) IN THE  CASE
 OF  ANY  OTHER  CORPORATION,  ANY  PART  OF ANY INCOME FROM DIVIDENDS OR
 INTEREST ON ANY KIND OF STOCK, SECURITIES OR  INDEBTEDNESS;  (C)  EXCEPT
 THAT  FOR  PURPOSES OF SUBPARAGRAPHS (A) AND (B) OF THIS PARAGRAPH THERE

 S. 1680                            18
 
 SHALL BE EXCLUDED ANY AMOUNTS TREATED AS DIVIDENDS PURSUANT  TO  SECTION
 SEVENTY-EIGHT  OF THE INTERNAL REVENUE CODE AND ANY AMOUNTS DESCRIBED IN
 PARAGRAPHS ELEVEN AND TWELVE OF SUBSECTION (E) OF THIS SECTION;
   (2)  TAXES  ON OR MEASURED BY INCOME OR PROFITS PAID OR ACCRUED WITHIN
 THE TAXABLE YEAR TO THE UNITED STATES, OR ANY OF ITS POSSESSIONS  OR  TO
 ANY FOREIGN COUNTRY;
   (3)  PREMIUMS PAID FOR ENVIRONMENTAL REMEDIATION INSURANCE, AS DEFINED
 IN SECTION TWENTY-THREE OF THIS CHAPTER,  AND  DEDUCTED  IN  DETERMINING
 FEDERAL TAXABLE INCOME, TO THE EXTENT OF THE AMOUNT OF THE ENVIRONMENTAL
 REMEDIATION INSURANCE CREDIT ALLOWED UNDER SUCH SECTION TWENTY-THREE AND
 SUBSECTION (S) OF SECTION FOURTEEN HUNDRED FIFTY-SIX OF THIS ARTICLE;
   (4)  TAXES  IMPOSED  UNDER  THIS ARTICLE, SECTIONS ONE HUNDRED EIGHTY-
 THREE AND ONE HUNDRED EIGHTY-FOUR AND ARTICLE NINE-A OF THIS CHAPTER;
   (5) IN THOSE INSTANCES WHERE A CREDIT FOR THE SPECIAL ADDITIONAL MORT-
 GAGE RECORDING TAX IS ALLOWED UNDER PARAGRAPH ONE OF SUBSECTION  (C)  OF
 SECTION  FOURTEEN  HUNDRED FIFTY-SIX OF THIS ARTICLE, THE AMOUNT ALLOWED
 AS AN EXCLUSION OR DEDUCTION FOR THE SPECIAL ADDITIONAL MORTGAGE RECORD-
 ING TAX IMPOSED BY SUBDIVISION ONE-A OF SECTION TWO HUNDRED  FIFTY-THREE
 OF  THIS  CHAPTER  IN  DETERMINING  THE  ENTIRE TAXABLE INCOME WHICH THE
 TAXPAYER IS REQUIRED TO REPORT TO THE UNITED STATES TREASURY  DEPARTMENT
 FOR SUCH TAXABLE YEAR; AND
   (6)  UNLESS  THE  CREDIT ALLOWED PURSUANT TO SUBSECTION (C) OF SECTION
 FOURTEEN HUNDRED FIFTY-SIX OF THIS ARTICLE IS REFLECTED IN THE  COMPUTA-
 TION  OF THE GAIN OR LOSS SO AS TO RESULT IN AN INCREASE IN SUCH GAIN OR
 DECREASE OF SUCH LOSS, FOR FEDERAL INCOME TAX PURPOSES, FROM THE SALE OR
 OTHER DISPOSITION OF THE PROPERTY WITH  RESPECT  TO  WHICH  THE  SPECIAL
 ADDITIONAL  MORTGAGE RECORDING TAX IMPOSED PURSUANT TO SUBDIVISION ONE-A
 OF SECTION TWO HUNDRED FIFTY-THREE OF THIS CHAPTER WAS PAID, THE  AMOUNT
 OF  THE SPECIAL ADDITIONAL MORTGAGE RECORDING TAX IMPOSED BY SUBDIVISION
 ONE-A OF SECTION TWO HUNDRED FIFTY-THREE OF THIS CHAPTER WHICH WAS  PAID
 AND  WHICH  IS REFLECTED IN THE COMPUTATION OF THE BASIS OF THE PROPERTY
 SO AS TO RESULT IN A DECREASE IN SUCH GAIN OR INCREASE IN SUCH LOSS  FOR
 FEDERAL  INCOME  TAX  PURPOSES FROM THE SALE OR OTHER DISPOSITION OF THE
 PROPERTY WITH RESPECT TO WHICH SUCH TAX WAS PAID.
   (7) FOR TAXABLE YEARS BEGINNING AFTER DECEMBER THIRTY-FIRST,  NINETEEN
 HUNDRED EIGHTY-ONE, EXCEPT WITH RESPECT TO PROPERTY WHICH IS A QUALIFIED
 MASS  COMMUTING VEHICLE DESCRIBED IN SUBPARAGRAPH (D) OF PARAGRAPH EIGHT
 OF SUBSECTION (F) OF SECTION ONE HUNDRED  SIXTY-EIGHT  OF  THE  INTERNAL
 REVENUE CODE (RELATING TO QUALIFIED MASS COMMUTING VEHICLES), ANY AMOUNT
 WHICH THE TAXPAYER CLAIMED AS A DEDUCTION IN COMPUTING ITS FEDERAL TAXA-
 BLE  INCOME  SOLELY  AS  A  RESULT  OF  AN ELECTION MADE PURSUANT TO THE
 PROVISIONS OF SUCH PARAGRAPH EIGHT AS IT WAS IN  EFFECT  FOR  AGREEMENTS
 ENTERED INTO PRIOR TO JANUARY FIRST, NINETEEN HUNDRED EIGHTY-FOUR;
   (8)  FOR TAXABLE YEARS BEGINNING AFTER DECEMBER THIRTY-FIRST, NINETEEN
 HUNDRED EIGHTY-ONE, EXCEPT WITH RESPECT TO PROPERTY WHICH IS A QUALIFIED
 MASS COMMUTING VEHICLE DESCRIBED IN SUBPARAGRAPH (D) OF PARAGRAPH  EIGHT
 OF  SUBSECTION  (F)  OF  SECTION ONE HUNDRED SIXTY-EIGHT OF THE INTERNAL
 REVENUE CODE (RELATING TO QUALIFIED MASS COMMUTING VEHICLES), ANY AMOUNT
 WHICH THE TAXPAYER WOULD HAVE BEEN REQUIRED TO INCLUDE IN  THE  COMPUTA-
 TION  OF ITS FEDERAL TAXABLE INCOME HAD IT NOT MADE THE ELECTION PERMIT-
 TED PURSUANT TO SUCH PARAGRAPH EIGHT AS IT WAS IN EFFECT FOR  AGREEMENTS
 ENTERED INTO PRIOR TO JANUARY FIRST, NINETEEN HUNDRED EIGHTY-FOUR;
   (9)  IN THE CASE OF PROPERTY PLACED IN SERVICE IN TAXABLE YEARS BEGIN-
 NING BEFORE NINETEEN HUNDRED NINETY-FOUR, FOR  TAXABLE  YEARS  BEGINNING
 AFTER  DECEMBER  THIRTY-FIRST,  NINETEEN HUNDRED EIGHTY-ONE, EXCEPT WITH
 RESPECT TO PROPERTY SUBJECT TO THE PROVISIONS  OF  SECTION  TWO  HUNDRED

 S. 1680                            19

 EIGHTY-F  OF  THE  INTERNAL  REVENUE  CODE  AND  PROPERTY SUBJECT TO THE
 PROVISIONS OF SECTION ONE HUNDRED SIXTY-EIGHT OF  THE  INTERNAL  REVENUE
 CODE WHICH IS PLACED IN SERVICE IN THIS STATE IN TAXABLE YEARS BEGINNING
 AFTER  DECEMBER  THIRTY-FIRST,  NINETEEN HUNDRED EIGHTY-FOUR, THE AMOUNT
 ALLOWABLE AS A DEDUCTION DETERMINED UNDER  SECTION  ONE  HUNDRED  SIXTY-
 EIGHT OF THE INTERNAL REVENUE CODE;
   (10)  UPON  THE  DISPOSITION  OF  PROPERTY TO WHICH PARAGRAPH SEVEN OF
 SUBSECTION (E) OF THIS SECTION APPLIES, THE AMOUNT, IF ANY, BY WHICH THE
 AGGREGATE OF THE AMOUNTS DESCRIBED IN SUCH PARAGRAPH SEVEN  ATTRIBUTABLE
 TO SUCH PROPERTY EXCEEDS THE AGGREGATE OF THE AMOUNTS DESCRIBED IN PARA-
 GRAPH NINE OF THIS SUBSECTION ATTRIBUTABLE TO SUCH PROPERTY,
   (11)  FOR  TAXABLE  YEARS BEGINNING BEFORE JANUARY FIRST, TWO THOUSAND
 TEN, IN THE CASE OF A TAXPAYER SUBJECT  TO  THE  PROVISIONS  OF  SECTION
 585(C)  OF  THE INTERNAL REVENUE CODE, THE AMOUNT ALLOWED AS A DEDUCTION
 PURSUANT TO SECTION 166 OF SUCH CODE, AND
   (12) FOR TAXABLE YEARS BEGINNING BEFORE JANUARY  FIRST,  TWO  THOUSAND
 TEN,  FOR  TAXPAYERS SUBJECT TO THE PROVISIONS OF SUBSECTION (I) OF THIS
 SECTION, TWENTY PERCENT OF THE  EXCESS  OF  (A)  THE  AMOUNT  DETERMINED
 PURSUANT  TO  SUCH  SUBSECTION  (I) OVER (B) THE AMOUNT WHICH WOULD HAVE
 BEEN ALLOWABLE HAD SUCH INSTITUTION MAINTAINED ITS BAD DEBT RESERVE  FOR
 ALL TAXABLE YEARS ON THE BASIS OF ACTUAL EXPERIENCE.
   (13)  FOR  TAXABLE  YEARS  BEGINNING  AFTER DECEMBER THIRTY-FIRST, TWO
 THOUSAND TWO, IN THE CASE OF QUALIFIED PROPERTY DESCRIBED  IN  PARAGRAPH
 TWO  OF  SUBSECTION K OF SECTION 168 OF THE INTERNAL REVENUE CODE, OTHER
 THAN QUALIFIED RESURGENCE ZONE PROPERTY DESCRIBED IN SUBSECTION  (U)  OF
 THIS  SECTION,  AND  OTHER THAN QUALIFIED NEW YORK LIBERTY ZONE PROPERTY
 DESCRIBED IN PARAGRAPH TWO OF SUBSECTION  B  OF  SECTION  1400L  OF  THE
 INTERNAL  REVENUE CODE (WITHOUT REGARD TO CLAUSE (I) OF SUBPARAGRAPH (C)
 OF SUCH PARAGRAPH), WHICH WAS PLACED IN SERVICE ON OR AFTER JUNE  FIRST,
 TWO  THOUSAND  THREE,  THE AMOUNT ALLOWABLE AS A DEDUCTION UNDER SECTION
 167 OF THE INTERNAL REVENUE CODE.
   (14) THE AMOUNT OF ANY  DEDUCTION  ALLOWED  PURSUANT  TO  SECTION  ONE
 HUNDRED NINETY-NINE OF THE INTERNAL REVENUE CODE.
   (15) THE AMOUNT OF ANY FEDERAL DEDUCTION FOR TAXES IMPOSED UNDER ARTI-
 CLE TWENTY-THREE OF THIS CHAPTER.
   (C) (1) EXCEPT AS OTHERWISE PROVIDED IN PARAGRAPHS TWO, THREE AND FOUR
 OF THIS SUBSECTION, IN THE CASE OF THE SALE OR EXCHANGE OF PROPERTY BY A
 TAXPAYER  WHICH  HAS  BEEN  SUBJECT  TO ARTICLE NINE-B OR NINE-C OF THIS
 CHAPTER (AS SUCH ARTICLES WERE IN EFFECT ON OR BEFORE  DECEMBER  THIRTY-
 FIRST,  NINETEEN  HUNDRED  SEVENTY-TWO)  WHERE THE PROPERTY HAS A HIGHER
 ADJUSTED BASIS FOR NEW YORK TAX PURPOSES THAN FOR FEDERAL TAX  PURPOSES,
 THERE  SHALL  BE  ALLOWED  AS  A  DEDUCTION  FROM ENTIRE NET INCOME, THE
 PORTION OF ANY GAIN OR LOSS ON SUCH SALE WHICH EQUALS THE DIFFERENCE  IN
 SUCH BASIS.
   (2)  IN CASE OF PROPERTY OF A TAXPAYER, OTHER THAN A SAVINGS BANK OR A
 SAVINGS AND LOAN ASSOCIATION, ACQUIRED PRIOR TO JANUARY FIRST,  NINETEEN
 HUNDRED  TWENTY-SIX,  AND  DISPOSED  OF  THEREAFTER,  THE COMPUTATION OF
 ENTIRE NET INCOME SHALL BE MODIFIED AS FOLLOWS:
   (I) NO GAIN SHALL BE DEEMED TO HAVE BEEN DERIVED IF EITHER THE COST OR
 THE FAIR MARKET PRICE OR VALUE ON JANUARY FIRST, NINETEEN HUNDRED  TWEN-
 TY-SIX, EXCEEDS THE VALUE REALIZED;
   (II) NO LOSS SHALL BE DEEMED TO HAVE BEEN SUSTAINED IF EITHER THE COST
 OR  THE  FAIR  MARKET  PRICE OR VALUE ON JANUARY FIRST, NINETEEN HUNDRED
 TWENTY-SIX, IS LESS THAN THE VALUE REALIZED;
   (III) WHERE BOTH THE COST AND THE FAIR MARKET PRICE OR VALUE ON  JANU-
 ARY  FIRST,  NINETEEN  HUNDRED TWENTY-SIX, ARE LESS THAN THE VALUE REAL-

 S. 1680                            20
 
 IZED, THE BASIS FOR COMPUTING GAIN SHALL BE THE COST OR THE FAIR  MARKET
 PRICE OR VALUE ON SUCH DATE, WHICHEVER IS HIGHER;
   (IV) WHERE BOTH THE COST AND THE FAIR MARKET PRICE OR VALUE ON JANUARY
 FIRST, NINETEEN HUNDRED TWENTY-SIX, ARE IN EXCESS OF THE VALUE REALIZED,
 THE  BASIS FOR COMPUTING LOSS SHALL BE THE COST OR THE FAIR MARKET PRICE
 OR VALUE ON SUCH DATE, WHICHEVER IS LOWER.
   (3) IN CASE OF PROPERTY OF A SAVINGS BANK ACQUIRED  PRIOR  TO  JANUARY
 FIRST,  NINETEEN  HUNDRED  FORTY-FOUR,  AND  DISPOSED  OF THEREAFTER, IN
 COMPUTING ENTIRE NET INCOME THE BASIS OF  SUCH  PROPERTY  SHALL  BE  THE
 VALUE  AS OF DECEMBER THIRTY-FIRST, NINETEEN HUNDRED FORTY-THREE, AS SET
 FORTH IN SUCH BANK'S REPORT OF SURPLUS AND UNDIVIDED EARNINGS FILED WITH
 THE TAX COMMISSION AS OF THAT DATE.
   (4) IN CASE OF PROPERTY OF A SAVINGS AND  LOAN  ASSOCIATION,  ACQUIRED
 PRIOR  TO  JANUARY  FIRST, NINETEEN HUNDRED FIFTY-THREE, AND DISPOSED OF
 THEREAFTER, THE COMPUTATION OF ENTIRE NET INCOME SHALL  BE  MODIFIED  AS
 FOLLOWS:
   (I) NO GAIN SHALL BE DEEMED TO HAVE BEEN DERIVED IF EITHER THE COST OR
 THE  FAIR  MARKET  PRICE  OR  VALUE  ON  JANUARY FIRST, NINETEEN HUNDRED
 FIFTY-THREE, EXCEEDS THE VALUE REALIZED;
   (II) NO LOSS SHALL BE DEEMED TO HAVE BEEN SUSTAINED IF EITHER THE COST
 OR THE FAIR MARKET PRICE OR VALUE ON  JANUARY  FIRST,  NINETEEN  HUNDRED
 FIFTY-THREE, IS LESS THAN THE VALUE REALIZED;
   (III)  WHERE BOTH THE COST AND THE FAIR MARKET PRICE OR VALUE ON JANU-
 ARY FIRST, NINETEEN HUNDRED FIFTY-THREE, ARE LESS THAN THE  VALUE  REAL-
 IZED,  THE BASIS FOR COMPUTING GAIN SHALL BE THE COST OR THE FAIR MARKET
 PRICE OR VALUE ON SUCH DATE, WHICHEVER IS HIGHER;
   (IV) WHERE BOTH THE COST AND THE FAIR MARKET PRICE OR VALUE ON JANUARY
 FIRST, NINETEEN HUNDRED FIFTY-THREE, ARE IN EXCESS OF  THE  VALUE  REAL-
 IZED,  THE BASIS FOR COMPUTING LOSS SHALL BE THE COST OR THE FAIR MARKET
 PRICE OR VALUE ON SUCH DATE, WHICHEVER IS LOWER.
   (D) ENTIRE NET INCOME SHALL NOT INCLUDE ANY REFUND OR CREDIT OF A  TAX
 FOR  WHICH  NO  EXCLUSION  OR  DEDUCTION  WAS ALLOWED IN DETERMINING THE
 TAXPAYER'S ENTIRE NET INCOME UNDER THIS ARTICLE OR  ARTICLES  NINE-A  OR
 TWENTY-THREE OF THIS CHAPTER FOR ANY PRIOR YEAR.
   (E)  THERE  SHALL  BE ALLOWED AS A DEDUCTION IN DETERMINING ENTIRE NET
 INCOME, TO THE EXTENT NOT  DEDUCTIBLE  IN  DETERMINING  FEDERAL  TAXABLE
 INCOME:
   (1)  INTEREST  ON  INDEBTEDNESS  INCURRED  OR CONTINUED TO PURCHASE OR
 CARRY OBLIGATIONS OR SECURITIES THE INCOME FROM WHICH IS SUBJECT TO  TAX
 UNDER THIS ARTICLE BUT EXEMPT FROM FEDERAL INCOME TAX,
   (2)  ORDINARY AND NECESSARY EXPENSES PAID OR INCURRED DURING THE TAXA-
 BLE YEAR ATTRIBUTABLE TO INCOME WHICH IS SUBJECT TO TAX UNDER THIS ARTI-
 CLE BUT EXEMPT FROM FEDERAL INCOME TAX,
   (3) THE AMORTIZABLE BOND PREMIUM FOR THE TAXABLE YEAR ON ANY BOND  THE
 INTEREST  ON  WHICH IS SUBJECT TO TAX UNDER THIS ARTICLE BUT EXEMPT FROM
 FEDERAL INCOME TAX,
   (4) THAT PORTION OF WAGES OR SALARIES PAID OR INCURRED FOR THE TAXABLE
 YEAR FOR WHICH A DEDUCTION IS NOT ALLOWED PURSUANT TO THE PROVISIONS  OF
 SECTION TWO HUNDRED EIGHTY-C OF THE INTERNAL REVENUE CODE,
   (5)  FOR TAXABLE YEARS BEGINNING AFTER DECEMBER THIRTY-FIRST, NINETEEN
 HUNDRED EIGHTY-ONE, EXCEPT WITH RESPECT TO PROPERTY WHICH IS A QUALIFIED
 MASS COMMUTING VEHICLE DESCRIBED IN SUBPARAGRAPH (D) OF PARAGRAPH  EIGHT
 OF  SUBSECTION  (F)  OF  SECTION ONE HUNDRED SIXTY-EIGHT OF THE INTERNAL
 REVENUE CODE (RELATING TO QUALIFIED MASS COMMUTING VEHICLES), ANY AMOUNT
 WHICH IS INCLUDED IN THE TAXPAYER'S FEDERAL TAXABLE INCOME SOLELY  AS  A
 RESULT  OF AN ELECTION MADE PURSUANT TO THE PROVISIONS OF SUCH PARAGRAPH

 S. 1680                            21
 
 EIGHT AS IT WAS IN EFFECT FOR AGREEMENTS ENTERED INTO PRIOR  TO  JANUARY
 FIRST, NINETEEN HUNDRED EIGHTY-FOUR,
   (6)  FOR TAXABLE YEARS BEGINNING AFTER DECEMBER THIRTY-FIRST, NINETEEN
 HUNDRED EIGHTY-ONE, EXCEPT WITH RESPECT TO PROPERTY WHICH IS A QUALIFIED
 MASS COMMUTING VEHICLE DESCRIBED IN SUBPARAGRAPH (D) OF PARAGRAPH  EIGHT
 OF  SUBSECTION  (F)  OF  SECTION ONE HUNDRED SIXTY-EIGHT OF THE INTERNAL
 REVENUE CODE (RELATING TO QUALIFIED MASS COMMUTING VEHICLES), ANY AMOUNT
 WHICH THE TAXPAYER COULD HAVE EXCLUDED FROM FEDERAL TAXABLE  INCOME  HAD
 IT  NOT MADE THE ELECTION PROVIDED FOR IN SUCH PARAGRAPH EIGHT AS IT WAS
 IN EFFECT FOR AGREEMENTS ENTERED INTO PRIOR TO JANUARY  FIRST,  NINETEEN
 HUNDRED EIGHTY-FOUR,
   (7)  IN THE CASE OF PROPERTY PLACED IN SERVICE IN TAXABLE YEARS BEGIN-
 NING BEFORE NINETEEN HUNDRED NINETY-FOUR, FOR  TAXABLE  YEARS  BEGINNING
 AFTER  DECEMBER  THIRTY-FIRST,  NINETEEN HUNDRED EIGHTY-ONE, EXCEPT WITH
 RESPECT TO PROPERTY SUBJECT TO THE PROVISIONS  OF  SECTION  TWO  HUNDRED
 EIGHTY-F  OF  THE  INTERNAL  REVENUE  CODE  AND  PROPERTY SUBJECT TO THE
 PROVISIONS OF SECTION ONE HUNDRED SIXTY-EIGHT OF  THE  INTERNAL  REVENUE
 CODE WHICH IS PLACED IN SERVICE IN THIS STATE IN TAXABLE YEARS BEGINNING
 AFTER  DECEMBER THIRTY-FIRST, NINETEEN HUNDRED EIGHTY-FOUR, AND PROVIDED
 A DEDUCTION HAS NOT BEEN EXCLUDED FROM ENTIRE  NET  INCOME  PURSUANT  TO
 PARAGRAPH  SEVEN  OF  SUBSECTION  (B)  OF  THIS  SECTION, AN AMOUNT WITH
 RESPECT TO PROPERTY WHICH IS SUBJECT TO THE PROVISIONS  OF  SECTION  ONE
 HUNDRED  SIXTY-EIGHT  OF  THE  INTERNAL REVENUE CODE EQUAL TO THE AMOUNT
 ALLOWABLE AS  THE  DEPRECIATION  DEDUCTION  UNDER  SECTION  ONE  HUNDRED
 SIXTY-SEVEN  OF  THE  INTERNAL  REVENUE  CODE AS SUCH SECTION WOULD HAVE
 APPLIED TO PROPERTY PLACED IN SERVICE ON DECEMBER THIRTY-FIRST, NINETEEN
 HUNDRED EIGHTY,
   (8) UPON THE DISPOSITION OF PROPERTY TO WHICH PARAGRAPH SEVEN OF  THIS
 SUBSECTION  APPLIES,  THE  AMOUNT, IF ANY, BY WHICH THE AGGREGATE OF THE
 AMOUNTS DESCRIBED IN PARAGRAPH NINE OF SUBSECTION (B)  OF  THIS  SECTION
 ATTRIBUTABLE  TO  SUCH  PROPERTY  EXCEEDS  THE  AGGREGATE OF THE AMOUNTS
 DESCRIBED IN PARAGRAPH SEVEN OF THIS  SUBSECTION  ATTRIBUTABLE  TO  SUCH
 PROPERTY,
   (9)  ANY  AMOUNT  OF MONEY OR OTHER PROPERTY RECEIVED FROM THE FEDERAL
 DEPOSIT INSURANCE CORPORATION PURSUANT  TO  SUBSECTION  (C)  OF  SECTION
 THIRTEEN OF THE FEDERAL DEPOSIT INSURANCE ACT, AS AMENDED, REGARDLESS OF
 WHETHER ANY NOTE OR OTHER INSTRUMENT IS ISSUED IN EXCHANGE THEREFOR,
   (10)  ANY  AMOUNT OF MONEY OR OTHER PROPERTY RECEIVED FROM THE FEDERAL
 SAVINGS AND LOAN INSURANCE CORPORATION PURSUANT TO PARAGRAPH  ONE,  TWO,
 THREE  OR  FOUR  OF  SUBSECTION  (F)  OF SECTION FOUR HUNDRED SIX OF THE
 FEDERAL NATIONAL HOUSING ACT, AS AMENDED, REGARDLESS OF WHETHER ANY NOTE
 OR OTHER INSTRUMENT IS ISSUED IN EXCHANGE THEREFOR,
   (11) (I) SEVENTEEN PERCENT OF INTEREST INCOME FROM SUBSIDIARY CAPITAL,
 AND
   (II) SIXTY PERCENT OF DIVIDEND INCOME FROM SUBSIDIARY  CAPITAL  EXCEPT
 AS PROVIDED IN PARAGRAPH EIGHTEEN OF THIS SUBSECTION, AND
   (III) SIXTY PERCENT OF THE AMOUNT BY WHICH GAINS FROM SUBSIDIARY CAPI-
 TAL  EXCEED LOSSES FROM SUBSIDIARY CAPITAL, TO THE EXTENT SUCH GAINS AND
 LOSSES WERE TAKEN INTO ACCOUNT IN DETERMINING THE ENTIRE TAXABLE  INCOME
 REFERRED TO IN SUBSECTION (A) OF THIS SECTION,
   (12) TWENTY-TWO AND ONE-HALF PERCENT OF INTEREST INCOME ON OBLIGATIONS
 OF  NEW  YORK  STATE, OR OF ANY POLITICAL SUBDIVISION THEREOF, OR OF THE
 UNITED STATES, OTHER THAN OBLIGATIONS HELD FOR RESALE IN CONNECTION WITH
 REGULAR TRADING ACTIVITIES,
   (13) FOR TAXABLE YEARS BEGINNING BEFORE JANUARY  FIRST,  TWO  THOUSAND
 TEN,  IN  THE  CASE  OF  A  TAXPAYER WHICH RECAPTURES ITS BALANCE OF THE

 S. 1680                            22
 
 RESERVE FOR LOSSES ON LOANS FOR FEDERAL INCOME TAX PURPOSES PURSUANT  TO
 SECTION  585(C)  OF  THE  INTERNAL  REVENUE  CODE,  ANY  AMOUNT WHICH IS
 INCLUDED IN FEDERAL TAXABLE INCOME PURSUANT TO SECTION  585(C)  OF  SUCH
 CODE,
   (14)  FOR  TAXABLE  YEARS BEGINNING BEFORE JANUARY FIRST, TWO THOUSAND
 TEN, IN THE CASE OF A TAXPAYER SUBJECT  TO  THE  PROVISIONS  OF  SECTION
 585(C)  OF  THE  INTERNAL  REVENUE CODE, ANY AMOUNT WHICH IS INCLUDED IN
 FEDERAL TAXABLE INCOME AS A RESULT OF A RECOVERY OF A LOAN.
   (15) FOR TAXABLE YEARS BEGINNING BEFORE JANUARY  FIRST,  TWO  THOUSAND
 TEN, IN THE CASE OF A TAXPAYER WHICH IS CURRENTLY OR HAS PREVIOUSLY BEEN
 SUBJECT  TO SUBSECTION (H) OF THIS SECTION, ANY AMOUNT WHICH IS INCLUDED
 IN FEDERAL TAXABLE INCOME PURSUANT TO SECTION 593(E)(2) OF THE  INTERNAL
 REVENUE CODE, AND ANY OTHER AMOUNT SO INCLUDED AS A RESULT OF A RECOVERY
 OF  OR  TERMINATION  FROM  THE  USE  OF A BAD DEBT RESERVE AS DEFINED IN
 SECTION 593 OF SUCH CODE AS IN EXISTENCE ON DECEMBER THIRTY-FIRST, NINE-
 TEEN HUNDRED NINETY-FIVE AS A  RESULT  OF  FEDERAL  LEGISLATION  ENACTED
 AFTER DECEMBER THIRTY-FIRST, NINETEEN HUNDRED NINETY-FIVE.
   (16) THE AMOUNT DEDUCTIBLE PURSUANT TO SUBSECTION (P) OF THIS SECTION.
   (17)  ONE  HUNDRED  PERCENT OF DIVIDEND INCOME FROM SUBSIDIARY CAPITAL
 RECEIVED DURING THE TAXABLE YEAR IF THAT  DIVIDEND  INCOME  IS  DIRECTLY
 ATTRIBUTABLE  TO A DIVIDEND FROM A CAPTIVE REIT OR CAPTIVE RIC FOR WHICH
 THE CAPTIVE REIT  OR  CAPTIVE  RIC  CLAIMED  A  FEDERAL  DIVIDENDS  PAID
 DEDUCTION AND THAT CAPTIVE REIT OR CAPTIVE RIC IS INCLUDED IN A COMBINED
 REPORT  OR  RETURN UNDER ARTICLE NINE-A, THIS ARTICLE OR ARTICLE THIRTY-
 THREE OF THIS CHAPTER.
   (F) PROVIDED THE TAXPAYER HAS NOT MADE AN ELECTION PURSUANT  TO  PARA-
 GRAPH  TWO  OF  SUBSECTION (B) OF SECTION FOURTEEN HUNDRED FIFTY-FOUR OF
 THIS ARTICLE, THERE SHALL BE  ALLOWED  AS  A  DEDUCTION  IN  DETERMINING
 ENTIRE  NET  INCOME, TO THE EXTENT NOT DEDUCTIBLE IN DETERMINING FEDERAL
 TAXABLE INCOME, THE ADJUSTED ELIGIBLE NET  INCOME  OF  AN  INTERNATIONAL
 BANKING FACILITY DETERMINED AS FOLLOWS:
   (1) THE ELIGIBLE NET INCOME OF AN INTERNATIONAL BANKING FACILITY SHALL
 BE THE AMOUNT REMAINING AFTER SUBTRACTING FROM THE ELIGIBLE GROSS INCOME
 THE APPLICABLE EXPENSES.
   (2)  ELIGIBLE  GROSS  INCOME  SHALL  BE THE GROSS INCOME DERIVED BY AN
 INTERNATIONAL BANKING FACILITY FROM:
   (A) MAKING, ARRANGING FOR,  PLACING  OR  SERVICING  LOANS  TO  FOREIGN
 PERSONS,  PROVIDED,  HOWEVER, THAT IN THE CASE OF A FOREIGN PERSON WHICH
 IS AN INDIVIDUAL, OR WHICH IS A FOREIGN BRANCH OF A DOMESTIC CORPORATION
 (OTHER THAN A BANK), OR WHICH IS A FOREIGN CORPORATION OR FOREIGN  PART-
 NERSHIP  WHICH  IS EIGHTY PER CENTUM OR MORE OWNED OR CONTROLLED, EITHER
 DIRECTLY OR INDIRECTLY, BY ONE OR MORE DOMESTIC CORPORATIONS (OTHER THAN
 BANKS), DOMESTIC PARTNERSHIPS OR RESIDENT INDIVIDUALS, SUBSTANTIALLY ALL
 THE PROCEEDS OF THE LOAN ARE FOR USE OUTSIDE OF THE UNITED STATES;
   (B) MAKING OR PLACING DEPOSITS WITH FOREIGN PERSONS WHICH ARE BANKS OR
 FOREIGN BRANCHES OF BANKS (INCLUDING  FOREIGN  SUBSIDIARIES  OR  FOREIGN
 BRANCHES  OF  THE  TAXPAYER) OR WITH OTHER INTERNATIONAL BANKING FACILI-
 TIES; OR
   (C) ENTERING INTO FOREIGN EXCHANGE  TRADING  OR  HEDGING  TRANSACTIONS
 RELATED TO ANY OF THE TRANSACTIONS DESCRIBED IN THIS PARAGRAPH.
   (3)  APPLICABLE  EXPENSES  SHALL  BE  ANY EXPENSES OR OTHER DEDUCTIONS
 ATTRIBUTABLE, DIRECTLY OR  INDIRECTLY,  TO  THE  ELIGIBLE  GROSS  INCOME
 DESCRIBED IN PARAGRAPH TWO OF THIS SUBSECTION.
   (4)  ADJUSTED  ELIGIBLE  NET INCOME SHALL BE DETERMINED BY SUBTRACTING
 FROM ELIGIBLE NET INCOME THE INELIGIBLE FUNDING AMOUNT, AND BY SUBTRACT-
 ING FROM THE AMOUNT THEN REMAINING THE FLOOR AMOUNT.

 S. 1680                            23
 
   (5) THE INELIGIBLE FUNDING AMOUNT SHALL BE THE AMOUNT, IF ANY,  DETER-
 MINED BY MULTIPLYING ELIGIBLE NET INCOME BY A FRACTION, THE NUMERATOR OF
 WHICH  IS  THE  AVERAGE  AGGREGATE  AMOUNT  FOR  THE TAXABLE YEAR OF ALL
 LIABILITIES, INCLUDING DEPOSITS, AND  OTHER  SOURCES  OF  FUNDS  OF  THE
 INTERNATIONAL  BANKING  FACILITY WHICH WERE NOT OWED TO OR RECEIVED FROM
 FOREIGN PERSONS, AND THE DENOMINATOR OF WHICH IS THE  AVERAGE  AGGREGATE
 AMOUNT  FOR  THE TAXABLE YEAR OF ALL LIABILITIES, INCLUDING DEPOSITS AND
 OTHER SOURCES OF FUNDS OF THE INTERNATIONAL BANKING FACILITY.
   (6) THE FLOOR AMOUNT SHALL BE THE AMOUNT, IF ANY, DETERMINED BY MULTI-
 PLYING THE AMOUNT REMAINING AFTER  SUBTRACTING  THE  INELIGIBLE  FUNDING
 AMOUNT FROM THE ELIGIBLE NET INCOME BY A FRACTION, NOT GREATER THAN ONE,
 WHICH IS DETERMINED AS FOLLOWS:
   (A) THE NUMERATOR SHALL BE
   (I)  THE  PERCENTAGE,  AS  SET FORTH IN SUBPARAGRAPH (C) OF THIS PARA-
 GRAPH, OF THE AVERAGE  AGGREGATE  AMOUNT  OF  THE  TAXPAYER'S  LOANS  TO
 FOREIGN  PERSONS  AND  DEPOSITS  WITH FOREIGN PERSONS WHICH ARE BANKS OR
 FOREIGN BRANCHES OF BANKS (INCLUDING  FOREIGN  SUBSIDIARIES  OR  FOREIGN
 BRANCHES OF THE TAXPAYER), WHICH LOANS AND DEPOSITS WERE RECORDED IN THE
 FINANCIAL  ACCOUNTS  OF  THE  TAXPAYER  FOR  ITS  BRANCHES, AGENCIES AND
 OFFICES WITHIN THE STATE FOR TAXABLE  YEARS  NINETEEN  HUNDRED  SEVENTY-
 FIVE,  NINETEEN  HUNDRED SEVENTY-SIX AND NINETEEN HUNDRED SEVENTY-SEVEN,
 MINUS
   (II) THE AVERAGE AGGREGATE AMOUNT OF SUCH LOANS AND SUCH DEPOSITS  FOR
 THE  TAXABLE YEAR OF THE TAXPAYER (OTHER THAN SUCH LOANS AND DEPOSITS OF
 AN INTERNATIONAL BANKING FACILITY), PROVIDED, HOWEVER, THAT IN  NO  CASE
 SHALL  THE AMOUNT DETERMINED IN THIS CLAUSE EXCEED THE AMOUNT DETERMINED
 IN CLAUSE (I) OF THIS SUBPARAGRAPH; AND
   (B) THE DENOMINATOR SHALL BE THE AVERAGE AGGREGATE AMOUNT OF THE LOANS
 TO FOREIGN PERSONS AND DEPOSITS WITH FOREIGN PERSONS WHICH ARE BANKS  OR
 FOREIGN  BRANCHES  OF  BANKS  (INCLUDING FOREIGN SUBSIDIARIES OR FOREIGN
 BRANCHES OF THE TAXPAYER), WHICH LOANS AND DEPOSITS WERE RECORDED IN THE
 FINANCIAL ACCOUNTS OF THE TAXPAYER'S INTERNATIONAL BANKING FACILITY  FOR
 THE TAXABLE YEAR.
   (C)  THE PERCENTAGE SHALL BE ONE HUNDRED PERCENT FOR THE FIRST TAXABLE
 YEAR IN WHICH THE TAXPAYER ESTABLISHES AN INTERNATIONAL BANKING FACILITY
 AND FOR THE NEXT SUCCEEDING FOUR TAXABLE YEARS. THE PERCENTAGE SHALL  BE
 EIGHTY PERCENT FOR THE FIFTH, SIXTY PERCENT FOR THE SIXTH, FORTY PERCENT
 FOR  THE  SEVENTH,  AND  TWENTY PERCENT FOR THE EIGHTH TAXABLE YEAR NEXT
 SUCCEEDING THE YEAR SUCH TAXPAYER ESTABLISHES SUCH INTERNATIONAL BANKING
 FACILITY, AND ZERO IN THE NINTH SUCCEEDING YEAR AND THEREAFTER.
   (7) IN THE EVENT ADJUSTED ELIGIBLE NET INCOME IS A LOSS, THE AMOUNT OF
 SUCH LOSS SHALL BE ADDED TO ENTIRE NET INCOME.
   (8) FOR THE PURPOSES OF THIS  SUBSECTION  THE  TERM  "FOREIGN  PERSON"
 MEANS
   (A) AN INDIVIDUAL WHO IS NOT A RESIDENT OF THE UNITED STATES,
   (B)  A  FOREIGN CORPORATION, A FOREIGN PARTNERSHIP OR A FOREIGN TRUST,
 AS DEFINED IN SECTION SEVENTY-SEVEN HUNDRED ONE OF THE INTERNAL  REVENUE
 CODE, OTHER THAN A DOMESTIC BRANCH THEREOF,
   (C)  A FOREIGN BRANCH OF A DOMESTIC CORPORATION (INCLUDING THE TAXPAY-
 ER),
   (D) A FOREIGN GOVERNMENT OR AN INTERNATIONAL ORGANIZATION OR AN AGENCY
 OF EITHER, OR
   (E) AN INTERNATIONAL BANKING FACILITY.
   FOR PURPOSES OF THIS PARAGRAPH, THE  TERMS  "FOREIGN"  AND  "DOMESTIC"
 SHALL  HAVE  THE  SAME  MEANING  AS  SET  FORTH IN SECTION SEVENTY-SEVEN
 HUNDRED ONE OF THE INTERNAL REVENUE CODE.

 S. 1680                            24
 
   (G) ENTIRE  NET  INCOME  SHALL  BE  COMPUTED  WITHOUT  REGARD  TO  THE
 REDUCTION  IN  THE  BASIS  OF PROPERTY THAT IS REQUIRED BY SECTION THREE
 HUNDRED SIXTY-TWO OF THE INTERNAL REVENUE CODE, BECAUSE OF ANY AMOUNT OF
 MONEY OR OTHER PROPERTY RECEIVED  FROM  THE  FEDERAL  DEPOSIT  INSURANCE
 CORPORATION PURSUANT TO SUBSECTION (C) OF SECTION THIRTEEN OF THE FEDER-
 AL  DEPOSIT  INSURANCE  ACT, AS AMENDED, OR FROM THE FEDERAL SAVINGS AND
 LOAN INSURANCE CORPORATION PURSUANT TO PARAGRAPH ONE, TWO, THREE OR FOUR
 OF SUBSECTION (F) OF SECTION FOUR HUNDRED SIX OF  THE  FEDERAL  NATIONAL
 HOUSING ACT, AS AMENDED.
   (H)  (1)  FOR PURPOSES OF THIS SUBSECTION, A "THRIFT INSTITUTION" IS A
 BANKING CORPORATION WHICH SATISFIES THE  REQUIREMENTS  OF  SUBPARAGRAPHS
 (A) AND (B) OF THIS PARAGRAPH.
   (A)  SUCH  BANKING  CORPORATION  MUST  BE (I) A BANKING CORPORATION AS
 DEFINED IN PARAGRAPH ONE OF SUBSECTION (A) OF SECTION  FOURTEEN  HUNDRED
 FIFTY-TWO  OF  THIS  ARTICLE  CREATED OR AUTHORIZED TO DO BUSINESS UNDER
 ARTICLE SIX OR TEN OF THE BANKING LAW, (II)  A  BANKING  CORPORATION  AS
 DEFINED  IN PARAGRAPH TWO OR SEVEN OF SUBSECTION (A) OF SECTION FOURTEEN
 HUNDRED FIFTY-TWO OF THIS ARTICLE WHICH IS DOING A BUSINESS SUBSTANTIAL-
 LY SIMILAR TO THE BUSINESS WHICH A CORPORATION  OR  ASSOCIATION  MAY  BE
 CREATED  TO  DO UNDER ARTICLE SIX OR TEN OF THE BANKING LAW OR ANY BUSI-
 NESS WHICH A CORPORATION OR ASSOCIATION IS AUTHORIZED BY SUCH ARTICLE TO
 DO, OR (III) A BANKING CORPORATION AS DEFINED IN PARAGRAPH FOUR OR  FIVE
 OF SUBSECTION (A) OF SECTION FOURTEEN HUNDRED FIFTY-TWO OF THIS ARTICLE.
   (B)  AT  LEAST SIXTY PERCENT OF THE AMOUNT OF THE TOTAL ASSETS (AT THE
 CLOSE OF THE TAXABLE YEAR) OF SUCH BANKING CORPORATION MUST  CONSIST  OF
 (I)  CASH;  (II) OBLIGATIONS OF THE UNITED STATES OR OF A STATE OR POLI-
 TICAL SUBDIVISION THEREOF, AND STOCK OR  OBLIGATIONS  OF  A  CORPORATION
 WHICH  IS AN INSTRUMENTALITY OF THE UNITED STATES OR OF A STATE OR POLI-
 TICAL SUBDIVISION THEREOF, BUT NOT INCLUDING OBLIGATIONS THE INTEREST ON
 WHICH IS EXCLUDABLE FROM GROSS INCOME UNDER SECTION 103 OF THE  INTERNAL
 REVENUE  CODE;  (III)  LOANS  SECURED BY A DEPOSIT OR SHARE OF A MEMBER;
 (IV) LOANS SECURED BY AN INTEREST IN REAL PROPERTY WHICH IS (OR FROM THE
 PROCEEDS OF THE LOAN, WILL BECOME) RESIDENTIAL  REAL  PROPERTY  OR  REAL
 PROPERTY USED PRIMARILY FOR CHURCH PURPOSES, LOANS MADE FOR THE IMPROVE-
 MENT  OF  RESIDENTIAL  REAL PROPERTY OR REAL PROPERTY USED PRIMARILY FOR
 CHURCH PURPOSES, PROVIDED THAT FOR PURPOSES OF THIS CLAUSE,  RESIDENTIAL
 REAL  PROPERTY SHALL INCLUDE SINGLE OR MULTIFAMILY DWELLINGS, FACILITIES
 IN RESIDENTIAL DEVELOPMENTS DEDICATED TO PUBLIC USE OR PROPERTY USED  ON
 A  NONPROFIT  BASIS  FOR RESIDENTS, AND MOBILE HOMES NOT USED ON A TRAN-
 SIENT BASIS; (V) PROPERTY ACQUIRED THROUGH THE LIQUIDATION OF  DEFAULTED
 LOANS DESCRIBED IN CLAUSE (IV) OF THIS SUBPARAGRAPH; (VI) ANY REGULAR OR
 RESIDUAL INTEREST IN A REMIC, AS SUCH TERM IS DEFINED IN SECTION 860D OF
 THE  INTERNAL  REVENUE CODE AND ANY REGULAR INTEREST IN A FASIT, AS SUCH
 TERM IS DEFINED IN SECTION 860L OF THE INTERNAL REVENUE CODE,  BUT  ONLY
 IN  THE  PROPORTION  WHICH  THE ASSETS OF SUCH REMIC OR FASIT CONSIST OF
 PROPERTY DESCRIBED IN ANY OF THE PRECEDING CLAUSES OF THIS SUBPARAGRAPH,
 EXCEPT THAT IF NINETY-FIVE PERCENT OR MORE OF THE ASSETS OF  SUCH  REMIC
 OR FASIT ARE ASSETS DESCRIBED IN CLAUSES (I) THROUGH (V) OF THIS SUBPAR-
 AGRAPH,  THE  ENTIRE INTEREST IN THE REMIC OR FASIT SHALL QUALIFY; (VII)
 ANY MORTGAGE-BACKED SECURITY WHICH REPRESENTS OWNERSHIP OF A  FRACTIONAL
 UNDIVIDED  INTEREST IN A TRUST, THE ASSETS OF WHICH CONSIST PRIMARILY OF
 MORTGAGE LOANS, PROVIDED THAT THE REAL PROPERTY WHICH SERVES AS SECURITY
 FOR THE LOANS IS (OR FROM THE PROCEEDS OF THE  LOAN,  WILL  BECOME)  THE
 TYPE  OF  PROPERTY DESCRIBED IN CLAUSE (IV) OF THIS SUBPARAGRAPH AND ANY
 COLLATERALIZED MORTGAGE OBLIGATION,  THE  SECURITY  FOR  WHICH  CONSISTS
 PRIMARILY  OF  MORTGAGE  LOANS,  PROVIDED  THAT  THE REAL PROPERTY WHICH

 S. 1680                            25
 
 SERVES AS SECURITY FOR THE LOANS IS (OR FROM THE PROCEEDS OF  THE  LOAN,
 WILL  BECOME)  THE  TYPE  OF  PROPERTY  DESCRIBED IN CLAUSE (IV) OF THIS
 SUBPARAGRAPH; (VIII) CERTIFICATES OF DEPOSIT IN, OR  OBLIGATIONS  OF,  A
 CORPORATION  ORGANIZED  UNDER  A STATE LAW WHICH SPECIFICALLY AUTHORIZES
 SUCH CORPORATION TO INSURE THE DEPOSITS  OR  SHARE  ACCOUNTS  OF  MEMBER
 ASSOCIATIONS; (IX) LOANS SECURED BY AN INTEREST IN REAL PROPERTY LOCATED
 WITHIN ANY URBAN RENEWAL AREA TO BE DEVELOPED FOR PREDOMINANTLY RESIDEN-
 TIAL  USE UNDER AN URBAN RENEWAL PLAN APPROVED BY THE SECRETARY OF HOUS-
 ING AND URBAN DEVELOPMENT UNDER PART A OR PART B OF TITLE I OF THE HOUS-
 ING ACT OF 1949, AS AMENDED, OR LOCATED WITHIN ANY  AREA  COVERED  BY  A
 PROGRAM  ELIGIBLE  FOR ASSISTANCE UNDER SECTION 103 OF THE DEMONSTRATION
 CITIES AND METROPOLITAN DEVELOPMENT ACT OF 1966, AS AMENDED,  AND  LOANS
 MADE FOR THE IMPROVEMENT OF ANY SUCH REAL PROPERTY; (X) LOANS SECURED BY
 AN  INTEREST  IN EDUCATIONAL, HEALTH, OR WELFARE INSTITUTIONS OR FACILI-
 TIES, INCLUDING STRUCTURES DESIGNED OR USED  PRIMARILY  FOR  RESIDENTIAL
 PURPOSES  FOR STUDENTS, RESIDENTS, AND PERSONS UNDER CARE, EMPLOYEES, OR
 MEMBERS OF THE STAFF OF SUCH INSTITUTIONS OR FACILITIES; (XI) LOANS MADE
 FOR THE PAYMENT OF EXPENSES OF COLLEGE OR UNIVERSITY EDUCATION OR  VOCA-
 TIONAL  TRAINING;  (XII) PROPERTY USED BY THE TAXPAYER IN THE CONDUCT OF
 BUSINESS WHICH CONSISTS PRINCIPALLY OF  ACQUIRING  THE  SAVINGS  OF  THE
 PUBLIC  AND  INVESTING  IN LOANS; (XIII) LOANS FOR WHICH THE TAXPAYER IS
 THE CREDITOR AND WHICH ARE WHOLLY SECURED BY LOANS DESCRIBED  IN  CLAUSE
 (IV) OF THIS SUBPARAGRAPH, BUT EXCLUDING LOANS FOR WHICH THE TAXPAYER IS
 THE  CREDITOR  TO  ANY  BANKING  CORPORATION DESCRIBED IN PARAGRAPHS ONE
 THROUGH SEVEN OF SUBSECTION (A) OF SECTION FOURTEEN HUNDRED FIFTY-TWO OF
 THIS ARTICLE OR A REAL ESTATE INVESTMENT TRUST, AS SUCH TERM IS  DEFINED
 IN  SECTION  856 OF THE INTERNAL REVENUE CODE, AND EXCLUDING LOANS WHICH
 ARE TREATED BY THE TAXPAYER AS SUBSIDIARY CAPITAL FOR  PURPOSES  OF  THE
 DEDUCTIONS  PROVIDED  BY  PARAGRAPH  ELEVEN  OF  SUBSECTION  (E) OF THIS
 SECTION; (XIV) SMALL BUSINESS LOANS OR SMALL FARM LOANS LOCATED IN  LOW-
 INCOME OR MODERATE-INCOME CENSUS TRACTS OR BLOCK NUMBERING AREAS DELINE-
 ATED BY THE UNITED STATES BUREAU OF THE CENSUS IN THE MOST RECENT DECEN-
 NIAL   CENSUS;   AND  (XV)  COMMUNITY  DEVELOPMENT  LOANS  OR  COMMUNITY
 DEVELOPMENT INVESTMENTS. FOR PURPOSES OF CLAUSE (XV)  OF  THIS  SUBPARA-
 GRAPH,  A  "COMMUNITY  DEVELOPMENT  LOAN"  IS A LOAN THAT (I) HAS AS ITS
 PRIMARY PURPOSE COMMUNITY DEVELOPMENT, (II) HAS  NOT  BEEN  REPORTED  OR
 COLLECTED  BY THE TAXPAYER FOR CONSIDERATION IN THE TAXPAYER'S COMMUNITY
 REINVESTMENT ACT EVALUATION PURSUANT TO THE FEDERAL COMMUNITY  REINVEST-
 MENT  ACT  OF 1977, AS AMENDED, OR SECTION TWENTY-EIGHT-B OF THE BANKING
 LAW AS A MORTGAGE LOAN DESCRIBED IN CLAUSE (IV) OF THIS SUBPARAGRAPH  OR
 A SMALL BUSINESS LOAN, SMALL FARM LOAN, OR CONSUMER LOAN, (III) BENEFITS
 THE  TAXPAYER'S  ASSESSMENT  AREA  OR  AREAS FOR PURPOSES OF THE FEDERAL
 COMMUNITY REINVESTMENT ACT OF 1977, AS AMENDED OR SECTION TWENTY-EIGHT-B
 OF THE BANKING LAW OR A BROADER STATEWIDE OR REGIONAL AREA THAT INCLUDES
 THE TAXPAYER'S ASSESSMENT AREA, AND (IV) IS IDENTIFIED IN THE TAXPAYER'S
 BOOKS AND RECORDS AS A COMMUNITY DEVELOPMENT LOAN FOR  PURPOSES  OF  ITS
 COMMUNITY  REINVESTMENT ACT EVALUATION PURSUANT TO THE FEDERAL COMMUNITY
 REINVESTMENT ACT OF 1977, AS AMENDED OR SECTION  TWENTY-EIGHT-B  OF  THE
 BANKING LAW. FOR PURPOSES OF CLAUSE (XV) OF THIS SUBPARAGRAPH, A "COMMU-
 NITY DEVELOPMENT INVESTMENT" IS AN INVESTMENT IN A SECURITY WHICH HAS AS
 ITS PRIMARY PURPOSE COMMUNITY DEVELOPMENT AND WHICH IS IDENTIFIED IN THE
 TAXPAYER'S  BOOKS  AND RECORDS AS A QUALIFIED INVESTMENT FOR PURPOSES OF
 ITS COMMUNITY REINVESTMENT ACT EVALUATION PURSUANT TO THE FEDERAL COMMU-
 NITY REINVESTMENT ACT OF 1977, AS AMENDED OR SECTION  TWENTY-EIGHT-B  OF
 THE BANKING LAW. FOR PURPOSES OF THE TWO PRECEDING SENTENCES, "COMMUNITY
 DEVELOPMENT"  MEANS (I) AFFORDABLE HOUSING (INCLUDING MULTIFAMILY RENTAL

 S. 1680                            26

 HOUSING FOR LOW-INCOME OR MODERATE-INCOME INDIVIDUALS);  (II)  COMMUNITY
 SERVICES  TARGETED  TO  LOW-INCOME OR MODERATE-INCOME INDIVIDUALS; (III)
 ACTIVITIES THAT PROMOTE ECONOMIC DEVELOPMENT BY FINANCING BUSINESSES  OR
 FARMS  THAT  MEET  THE  SIZE ELIGIBILITY STANDARDS OF THE SMALL BUSINESS
 ADMINISTRATION'S DEVELOPMENT COMPANY OR SMALL BUSINESS INVESTMENT COMPA-
 NY PROGRAMS OR HAVE GROSS ANNUAL REVENUES  OF  ONE  MILLION  DOLLARS  OR
 LESS;  (IV) ACTIVITIES THAT REVITALIZE OR STABILIZE LOW-INCOME OR MODER-
 ATE-INCOME CENSUS TRACTS OR BLOCK  NUMBERING  AREAS  DELINEATED  BY  THE
 UNITED  STATES BUREAU OF THE CENSUS IN THE MOST RECENT DECENNIAL CENSUS;
 OR (V) ACTIVITIES THAT SEEK TO PREVENT DEFAULTS AND/OR  FORECLOSURES  IN
 LOANS INCLUDED IN ITEMS (I) AND (III) OF THIS SENTENCE.
   (C)  AT  THE  ELECTION  OF  THE  TAXPAYER, THE PERCENTAGE SPECIFIED IN
 SUBPARAGRAPH (B) OF THIS PARAGRAPH SHALL BE APPLIED ON THE BASIS OF  THE
 AVERAGE ASSETS OUTSTANDING DURING THE TAXABLE YEAR, IN LIEU OF THE CLOSE
 OF  THE TAXABLE YEAR. FOR PURPOSES OF CLAUSE (IV) OF SUBPARAGRAPH (B) OF
 THIS PARAGRAPH, IF A MULTIFAMILY STRUCTURE SECURING A LOAN  IS  USED  IN
 PART  FOR NONRESIDENTIAL USE PURPOSES, THE ENTIRE LOAN IS DEEMED A RESI-
 DENTIAL REAL PROPERTY LOAN IF THE PLANNED RESIDENTIAL USE EXCEEDS EIGHTY
 PERCENT OF THE PROPERTY'S PLANNED USE (DETERMINED AS  OF  THE  TIME  THE
 LOAN  IS MADE). ALSO, FOR PURPOSES OF CLAUSE (IV) OF SUBPARAGRAPH (B) OF
 THIS PARAGRAPH, LOANS MADE TO FINANCE THE ACQUISITION OR DEVELOPMENT  OF
 LAND  SHALL  BE DEEMED TO BE LOANS SECURED BY AN INTEREST IN RESIDENTIAL
 REAL PROPERTY IF THERE IS A REASONABLE ASSURANCE THAT THE PROPERTY  WILL
 BECOME RESIDENTIAL REAL PROPERTY WITHIN A PERIOD OF THREE YEARS FROM THE
 DATE  OF ACQUISITION OF SUCH LAND; BUT THIS SENTENCE SHALL NOT APPLY FOR
 ANY TAXABLE YEAR UNLESS,  WITHIN  SUCH  THREE  YEAR  PERIOD,  SUCH  LAND
 BECOMES  RESIDENTIAL  REAL PROPERTY. FOR PURPOSES OF DETERMINING WHETHER
 ANY INTEREST IN A REMIC QUALIFIES UNDER CLAUSE (VI) OF SUBPARAGRAPH  (B)
 OF  THIS  PARAGRAPH,  ANY REGULAR INTEREST IN ANOTHER REMIC HELD BY SUCH
 REMIC SHALL BE TREATED AS A LOAN DESCRIBED IN A PRECEDING  CLAUSE  UNDER
 PRINCIPLES  SIMILAR TO THE PRINCIPLE OF SUCH CLAUSE (VI); EXCEPT THAT IF
 SUCH REMICS ARE PART OF A TIERED STRUCTURE, THEY SHALL BE TREATED AS ONE
 REMIC FOR PURPOSES OF SUCH CLAUSE (VI).
   (2) FOR TAXABLE YEARS BEGINNING BEFORE  JANUARY  FIRST,  TWO  THOUSAND
 TEN,  A  THRIFT  INSTITUTION  MUST  EXCLUDE  FROM THE COMPUTATION OF ITS
 ENTIRE NET INCOME ANY AMOUNT ALLOWED AS A DEDUCTION FOR  FEDERAL  INCOME
 TAX PURPOSES PURSUANT TO SECTIONS 166, 585 OR 593 OF THE INTERNAL REVEN-
 UE CODE.
   (3)  FOR  TAXABLE  YEARS  BEGINNING BEFORE JANUARY FIRST, TWO THOUSAND
 TEN, A THRIFT INSTITUTION SHALL BE ALLOWED AS A DEDUCTION  IN  COMPUTING
 ENTIRE NET INCOME THE AMOUNT OF A REASONABLE ADDITION TO ITS RESERVE FOR
 BAD DEBTS. THIS AMOUNT SHALL BE EQUAL TO THE SUM OF
   (A)  THE  AMOUNT DETERMINED TO BE A REASONABLE ADDITION TO THE RESERVE
 FOR LOSSES ON NONQUALIFYING LOANS, COMPUTED IN THE  SAME  MANNER  AS  IS
 PROVIDED  WITH  RESPECT TO ADDITIONS TO THE RESERVES FOR LOSSES ON LOANS
 OF BANKS UNDER PARAGRAPH ONE OF SUBSECTION (I) OF THIS SECTION, PLUS
   (B) THE AMOUNT DETERMINED BY THE TAXPAYER TO BE A REASONABLE  ADDITION
 TO  THE  RESERVE  FOR LOSSES ON QUALIFYING REAL PROPERTY LOANS, BUT SUCH
 AMOUNT SHALL NOT EXCEED THE AMOUNT DETERMINED UNDER  PARAGRAPH  FOUR  OR
 FIVE  OF THIS SUBSECTION, WHICHEVER IS THE LARGER, BUT THE AMOUNT DETER-
 MINED UNDER THIS SUBPARAGRAPH SHALL IN NO CASE BE GREATER THAN THE LARG-
 ER OF
   (I) THE AMOUNT DETERMINED UNDER SUCH PARAGRAPH FIVE, OR
   (II) THE AMOUNT WHICH, WHEN  ADDED  TO  THE  AMOUNT  DETERMINED  UNDER
 SUBPARAGRAPH  (A)  OF  THIS PARAGRAPH, EQUALS THE AMOUNT BY WHICH TWELVE
 PERCENT OF THE TOTAL DEPOSITS OR WITHDRAWABLE ACCOUNTS OF DEPOSITORS  OF

 S. 1680                            27
 
 THE  TAXPAYER  AT THE CLOSE OF SUCH YEAR EXCEEDS THE SUM OF ITS SURPLUS,
 UNDIVIDED PROFITS AND RESERVES AT THE BEGINNING  OF  SUCH  YEAR  (TAKING
 INTO  ACCOUNT  ANY PORTION THEREOF ATTRIBUTABLE TO THE PERIOD BEFORE THE
 FIRST  TAXABLE  YEAR  BEGINNING  AFTER  DECEMBER  THIRTY-FIRST, NINETEEN
 HUNDRED FIFTY-ONE).
   THE TAXPAYER MUST INCLUDE IN ITS TAX RETURN FOR EACH YEAR  A  COMPUTA-
 TION  OF  THE  AMOUNT OF THE ADDITION TO THE BAD DEBT RESERVE DETERMINED
 UNDER THIS SUBSECTION. THE USE OF A PARTICULAR METHOD IN THE RETURN  FOR
 A TAXABLE YEAR IS NOT A BINDING ELECTION BY THE TAXPAYER.
   (4)  (A)  SUBJECT  TO SUBPARAGRAPHS (B) AND (C) OF THIS PARAGRAPH, THE
 AMOUNT DETERMINED UNDER THIS PARAGRAPH FOR THE TAXABLE YEAR SHALL BE  AN
 AMOUNT  EQUAL  TO  THIRTY-TWO  PERCENT OF THE ENTIRE NET INCOME FOR SUCH
 YEAR.
   (B) THE AMOUNT DETERMINED UNDER SUBPARAGRAPH  (A)  OF  THIS  PARAGRAPH
 SHALL  BE  REDUCED  (BUT  NOT  BELOW  0)  BY THE AMOUNT DETERMINED UNDER
 SUBPARAGRAPH (A) OF PARAGRAPH THREE OF THIS SUBSECTION.
   (C) THE AMOUNT DETERMINED UNDER THIS PARAGRAPH SHALL  NOT  EXCEED  THE
 AMOUNT  NECESSARY  TO  INCREASE  THE BALANCE AT THE CLOSE OF THE TAXABLE
 YEAR OF THE RESERVE FOR LOSSES ON QUALIFYING REAL PROPERTY LOANS TO  SIX
 PERCENT OF SUCH LOANS OUTSTANDING AT SUCH TIME.
   (D)  FOR  PURPOSES  OF  THIS  PARAGRAPH,  ENTIRE  NET  INCOME SHALL BE
 COMPUTED
   (I) BY EXCLUDING FROM INCOME ANY AMOUNT INCLUDED THEREIN BY REASON  OF
 SUBPARAGRAPH (B) OF PARAGRAPH EIGHT OF THIS SUBSECTION,
   (II) WITHOUT REGARD TO ANY DEDUCTION ALLOWABLE FOR ANY ADDITION TO THE
 RESERVE FOR BAD DEBTS, AND
   (III) BY EXCLUDING FROM INCOME AN AMOUNT EQUAL TO THE NET GAIN FOR THE
 TAXABLE YEAR ARISING FROM THE SALE OR EXCHANGE OF STOCK OF A CORPORATION
 OR  OF OBLIGATIONS THE INTEREST ON WHICH IS EXCLUDABLE FROM GROSS INCOME
 UNDER SECTION 103 OF THE INTERNAL REVENUE CODE.
   (IV) WHENEVER  A  THRIFT  INSTITUTION  IS  PROPERLY  INCLUDABLE  IN  A
 COMBINED  RETURN,  ENTIRE  NET  INCOME,  FOR PURPOSES OF THIS PARAGRAPH,
 SHALL NOT EXCEED THE  LESSER  OF  THE  THRIFT  INSTITUTION'S  SEPARATELY
 COMPUTED  ENTIRE  NET INCOME AS ADJUSTED PURSUANT TO CLAUSES (I) THROUGH
 (III) OF THIS SUBPARAGRAPH OR THE COMBINED GROUP'S ENTIRE NET INCOME  AS
 ADJUSTED PURSUANT TO CLAUSES (I) THROUGH (III) OF THIS SUBPARAGRAPH.
   (5)  THE  AMOUNT  DETERMINED UNDER THIS PARAGRAPH FOR THE TAXABLE YEAR
 SHALL BE COMPUTED IN THE SAME MANNER AS IS PROVIDED UNDER PARAGRAPH  ONE
 OF  SUBSECTION (I) OF THIS SECTION WITH RESPECT TO ADDITIONS TO RESERVES
 FOR LOSSES ON LOANS OF BANKS. PROVIDED, HOWEVER, THAT  FOR  ANY  TAXABLE
 YEAR  BEGINNING AFTER NINETEEN HUNDRED NINETY-FIVE, FOR PURPOSES OF SUCH
 COMPUTATION, THE BASE YEAR SHALL BE THE LATER OF (A)  THE  LAST  TAXABLE
 YEAR  BEGINNING  IN NINETEEN HUNDRED NINETY-FIVE OR (B) THE LAST TAXABLE
 YEAR BEFORE THE CURRENT YEAR IN WHICH THE AMOUNT  DETERMINED  UNDER  THE
 PROVISIONS  OF  SUBPARAGRAPH  (B)  OF PARAGRAPH THREE OF THIS SUBSECTION
 EXCEEDED THE AMOUNT ALLOWABLE UNDER THIS SUBPARAGRAPH.
   (6)  (A)  (I)  EACH  TAXPAYER  DESCRIBED  IN  PARAGRAPH  ONE  OF  THIS
 SUBSECTION SHALL ESTABLISH AND MAINTAIN A NEW YORK RESERVE FOR LOSSES ON
 QUALIFYING  REAL  PROPERTY  LOANS,  A  NEW  YORK  RESERVE  FOR LOSSES ON
 NONQUALIFYING LOANS AND A SUPPLEMENTAL RESERVE FOR LOSSES ON LOANS. SUCH
 RESERVES SHALL BE MAINTAINED FOR ALL SUBSEQUENT TAXABLE YEARS THAT  THIS
 SUBSECTION   APPLIES   TO   THE  TAXPAYER. (II)  FOR  PURPOSES  OF  THIS
 SUBSECTION, SUCH RESERVES SHALL BE TREATED AS RESERVES  FOR  BAD  DEBTS,
 BUT  NO  DEDUCTION SHALL BE ALLOWED FOR ANY ADDITION TO THE SUPPLEMENTAL
 RESERVE FOR LOSSES ON LOANS. (III) EXCEPT AS NOTED BELOW,  THE  BALANCES
 OF  EACH  SUCH  RESERVE  AT  THE BEGINNING OF THE FIRST DAY OF THE FIRST

 S. 1680                            28
 
 TAXABLE YEAR BEGINNING AFTER  DECEMBER  THIRTY-FIRST,  NINETEEN  HUNDRED
 NINETY-FIVE  SHALL  BE  THE  SAME AS THE BALANCES MAINTAINED FOR FEDERAL
 INCOME TAX PURPOSES IN ACCORDANCE WITH SECTION 593(C)(1) OF THE INTERNAL
 REVENUE  CODE AS IN EXISTENCE ON DECEMBER THIRTY-FIRST, NINETEEN HUNDRED
 NINETY-FIVE FOR THE LAST DAY OF THE LAST TAX YEAR BEGINNING BEFORE JANU-
 ARY FIRST, NINETEEN HUNDRED NINETY-SIX. A TAXPAYER  WHICH  MAINTAINED  A
 NEW  YORK  RESERVE  FOR LOAN LOSSES ON QUALIFYING REAL PROPERTY LOANS IN
 THE LAST TAX YEAR BEGINNING BEFORE JANUARY FIRST, NINETEEN HUNDRED NINE-
 TY-SIX SHALL HAVE A CONTINUATION OF SUCH NEW  YORK  RESERVE  BALANCE  IN
 LIEU  OF  THE  AMOUNT  DETERMINED  UNDER  THE  PRECEDING  SENTENCE. (IV)
 NOTWITHSTANDING CLAUSE (II) OF THIS SUBPARAGRAPH, ANY  AMOUNT  ALLOCATED
 TO  THE RESERVE FOR LOSSES ON QUALIFYING REAL PROPERTY LOANS PURSUANT TO
 SECTION 593 (C) (5) OF THE INTERNAL REVENUE CODE AS IN EFFECT IMMEDIATE-
 LY PRIOR TO THE ENACTMENT OF THE TAX REFORM ACT OF  1976  SHALL  NOT  BE
 TREATED  AS A RESERVE FOR BAD DEBTS FOR ANY PURPOSE OTHER THAN DETERMIN-
 ING THE AMOUNT REFERRED TO IN SUBPARAGRAPH (B)  OF  PARAGRAPH  THREE  OF
 THIS  SUBSECTION,  AND  FOR SUCH PURPOSE SUCH AMOUNT SHALL BE TREATED AS
 REMAINING IN SUCH RESERVE.
   (B) ANY DEBT BECOMING WORTHLESS OR PARTIALLY WORTHLESS IN RESPECT OF A
 QUALIFYING REAL PROPERTY LOAN SHALL BE CHARGED TO THE RESERVE FOR LOSSES
 ON SUCH LOANS AND ANY DEBT BECOMING WORTHLESS OR PARTIALLY WORTHLESS  IN
 RESPECT  OF  A  NONQUALIFYING  LOAN  SHALL BE CHARGED TO THE RESERVE FOR
 LOSSES ON NONQUALIFYING LOANS, EXCEPT THAT ANY SUCH  DEBT  MAY,  AT  THE
 ELECTION  OF THE TAXPAYER, BE CHARGED IN WHOLE OR IN PART TO THE SUPPLE-
 MENTAL RESERVE FOR LOSSES ON LOANS.
   (C) THE NEW YORK RESERVE FOR LOSSES ON QUALIFYING REAL PROPERTY  LOANS
 SHALL  BE  INCREASED  BY THE AMOUNT DETERMINED UNDER SUBPARAGRAPH (B) OF
 PARAGRAPH THREE OF THIS SUBSECTION AND THE NEW YORK RESERVE  FOR  LOSSES
 ON NONQUALIFYING LOANS SHALL BE INCREASED BY THE AMOUNT DETERMINED UNDER
 SUBPARAGRAPH (A) OF PARAGRAPH THREE OF THIS SUBSECTION.
   (7)  (A)  FOR  PURPOSES  OF THIS SUBSECTION, THE TERM "QUALIFYING REAL
 PROPERTY LOAN" SHALL MEAN ANY LOAN SECURED BY AN  INTEREST  IN  IMPROVED
 REAL  PROPERTY OR SECURED BY AN INTEREST IN REAL PROPERTY WHICH IS TO BE
 IMPROVED OUT OF THE PROCEEDS OF THE LOAN. SUCH TERM  SHALL  INCLUDE  ANY
 MORTGAGE-BACKED  SECURITY  WHICH  REPRESENTS  OWNERSHIP  OF A FRACTIONAL
 UNDIVIDED INTEREST IN A TRUST, THE ASSETS OF WHICH CONSIST PRIMARILY  OF
 MORTGAGE LOANS, PROVIDED THAT THE REAL PROPERTY WHICH SERVES AS SECURITY
 FOR  THE  LOANS  IS  (OR FROM THE PROCEEDS OF THE LOAN, WILL BECOME) THE
 TYPE OF PROPERTY DESCRIBED IN CLAUSES (I) THROUGH  (V)  OF  SUBPARAGRAPH
 (B)  OF  PARAGRAPH ONE OF THIS SUBDIVISION. HOWEVER, SUCH TERM SHALL NOT
 INCLUDE: (I) ANY LOAN EVIDENCED BY A SECURITY  (AS  DEFINED  IN  SECTION
 165(G)  (2) (C) OF THE INTERNAL REVENUE CODE); (II) ANY LOAN, WHETHER OR
 NOT EVIDENCED BY A SECURITY (AS DEFINED IN SUCH SECTION 165(G) (2) (C)),
 THE PRIMARY OBLIGOR OF WHICH IS (I) A GOVERNMENT OR  POLITICAL  SUBDIVI-
 SION  OR  INSTRUMENTALITY  THEREOF, (II) A BANKING CORPORATION, OR (III)
 ANY CORPORATION SIXTY-FIVE PERCENT OR MORE  OF  WHOSE  VOTING  STOCK  IS
 OWNED  OR  CONTROLLED,  DIRECTLY  OR INDIRECTLY, BY THE TAXPAYER OR BY A
 BANKING CORPORATION OR BANK  HOLDING  COMPANY  THAT  OWNS  OR  CONTROLS,
 DIRECTLY  OR  INDIRECTLY, SIXTY-FIVE PERCENT OR MORE OF THE VOTING STOCK
 OF THE TAXPAYER; (III) ANY LOAN, TO THE EXTENT SECURED BY A  DEPOSIT  IN
 OR  SHARE  OF  THE  TAXPAYER; OR (IV) ANY LOAN WHICH, WITHIN A SIXTY-DAY
 PERIOD BEGINNING IN ONE TAXABLE YEAR OF THE CREDITOR AND ENDING  IN  ITS
 NEXT  TAXABLE  YEAR, IS MADE OR ACQUIRED AND THEN REPAID OR DISPOSED OF,
 UNLESS THE TRANSACTIONS BY WHICH SUCH LOAN WAS MADE OR ACQUIRED AND THEN
 REPAID OR DISPOSED OF ARE ESTABLISHED  TO  BE  FOR  BONA  FIDE  BUSINESS
 PURPOSES.

 S. 1680                            29
 
   (B)  FOR  PURPOSES  OF  THIS SUBSECTION, THE TERM "NONQUALIFYING LOAN"
 SHALL MEAN ANY LOAN WHICH IS NOT A QUALIFYING REAL PROPERTY LOAN.
   (C)  FOR PURPOSES OF THIS SUBSECTION, THE TERM "LOAN" SHALL MEAN DEBT,
 AS THE TERM "DEBT" IS USED IN SECTION 166 OF THE INTERNAL REVENUE CODE.
   (D) A REGULAR OR RESIDUAL INTEREST IN A REMIC, AS SUCH TERM IS DEFINED
 IN SECTION 860D OF THE INTERNAL REVENUE CODE,  SHALL  BE  TREATED  AS  A
 QUALIFYING  REAL  PROPERTY  LOAN,  EXCEPT THAT, IF LESS THAN NINETY-FIVE
 PERCENT OF THE ASSETS OF SUCH REMIC ARE QUALIFYING REAL  PROPERTY  LOANS
 (DETERMINED  AS  IF  THE  TAXPAYER  HELD  THE ASSETS OF THE REMIC), SUCH
 INTEREST SHALL BE SO TREATED ONLY IN THE PROPORTION WHICH THE ASSETS  OF
 SUCH  REMIC  CONSIST  OF SUCH LOANS. FOR PURPOSES OF DETERMINING WHETHER
 ANY INTEREST IN A REMIC QUALIFIES  UNDER  THE  PRECEDING  SENTENCE,  ANY
 INTEREST IN ANOTHER REMIC HELD BY SUCH REMIC SHALL BE TREATED AS A QUAL-
 IFYING  REAL PROPERTY LOAN UNDER PRINCIPLES SIMILAR TO THE PRINCIPLES OF
 THE PRECEDING SENTENCE, EXCEPT THAT IF SUCH REMICS ARE PART OF A  TIERED
 STRUCTURE, THEY SHALL BE TREATED AS ONE REMIC FOR PURPOSES OF THIS PARA-
 GRAPH.
   (8)(A)  ANY  DISTRIBUTION OF PROPERTY (AS DEFINED IN SECTION 317(A) OF
 THE INTERNAL REVENUE CODE) BY A THRIFT INSTITUTION TO A SHAREHOLDER WITH
 RESPECT TO ITS STOCK,  IF  SUCH  DISTRIBUTION  IS  NOT  ALLOWABLE  AS  A
 DEDUCTION UNDER SECTION 591 OF SUCH CODE, SHALL BE TREATED AS MADE
   (I)  FIRST  OUT  OF  ITS  NEW YORK EARNINGS AND PROFITS ACCUMULATED IN
 TAXABLE YEARS BEGINNING AFTER DECEMBER  THIRTY-FIRST,  NINETEEN  HUNDRED
 FIFTY-ONE, TO THE EXTENT THEREOF,
   (II)  THEN  OUT  OF THE NEW YORK RESERVE FOR LOSSES ON QUALIFYING REAL
 PROPERTY LOANS, TO THE EXTENT ADDITIONS TO SUCH RESERVE EXCEED THE ADDI-
 TIONS WHICH WOULD  HAVE  BEEN  ALLOWED  UNDER  PARAGRAPH  FIVE  OF  THIS
 SUBSECTION,
   (III) THEN OUT OF THE SUPPLEMENTAL RESERVE FOR LOSSES ON LOANS, TO THE
 EXTENT THEREOF,
   (IV) THEN OUT OF SUCH OTHER ACCOUNTS AS MAY BE PROPER.
 THIS SUBPARAGRAPH SHALL APPLY IN THE CASE OF ANY DISTRIBUTION IN REDEMP-
 TION OF STOCK OR IN PARTIAL OR COMPLETE LIQUIDATION OF A THRIFT INSTITU-
 TION,  EXCEPT  THAT ANY SUCH DISTRIBUTION SHALL BE TREATED AS MADE FIRST
 OUT OF THE AMOUNT REFERRED TO  IN  CLAUSE  (II)  OF  THIS  SUBPARAGRAPH,
 SECOND  OUT  OF  THE AMOUNT REFERRED TO IN CLAUSE (III) OF THIS SUBPARA-
 GRAPH, THIRD OUT OF THE AMOUNT REFERRED TO IN CLAUSE (I) OF THIS SUBPAR-
 AGRAPH AND THEN OUT OF SUCH  OTHER  ACCOUNTS  AS  MAY  BE  PROPER.  THIS
 SUBPARAGRAPH  SHALL NOT APPLY TO ANY TRANSACTION TO WHICH SECTION 381 OF
 SUCH CODE (RELATING TO CARRYOVERS AND  CERTAIN  CORPORATE  ACQUISITIONS)
 APPLIES,  OR  TO ANY DISTRIBUTION TO THE FEDERAL SAVINGS AND LOAN INSUR-
 ANCE CORPORATION OR THE FEDERAL DEPOSIT INSURANCE CORPORATION IN REDEMP-
 TION OF AN INTEREST IN AN ASSOCIATION OR INSTITUTION, IF  SUCH  INTEREST
 WAS ORIGINALLY RECEIVED BY THE FEDERAL SAVINGS AND LOAN INSURANCE CORPO-
 RATION  OR  THE  FEDERAL  DEPOSIT  INSURANCE CORPORATION IN EXCHANGE FOR
 FINANCIAL ASSISTANCE PURSUANT TO SECTION 406(F) OF THE FEDERAL  NATIONAL
 HOUSING  ACT  OR  PURSUANT  TO SUBSECTION (C) OF SECTION THIRTEEN OF THE
 FEDERAL DEPOSIT INSURANCE ACT.
   (B) IF ANY DISTRIBUTION IS TREATED  UNDER  SUBPARAGRAPH  (A)  OF  THIS
 PARAGRAPH  AS  HAVING BEEN MADE OUT OF THE RESERVES DESCRIBED IN CLAUSES
 (II) AND (III) OF SUCH SUBPARAGRAPH, THE  AMOUNT  CHARGED  AGAINST  SUCH
 RESERVE  SHALL  BE  THE  AMOUNT WHICH, WHEN REDUCED BY THE AMOUNT OF TAX
 IMPOSED UNDER THE INTERNAL REVENUE CODE AND ATTRIBUTABLE TO  THE  INCLU-
 SION  OF  SUCH  AMOUNT  IN  GROSS INCOME, IS EQUAL TO THE AMOUNT OF SUCH
 DISTRIBUTION; AND THE AMOUNT SO CHARGED AGAINST SUCH  RESERVE  SHALL  BE
 INCLUDED IN THE ENTIRE NET INCOME OF THE TAXPAYER.

 S. 1680                            30
 
   (C)  (I) FOR PURPOSES OF CLAUSE (II) OF SUBPARAGRAPH (A) OF THIS PARA-
 GRAPH, ADDITIONS TO THE NEW YORK RESERVE FOR LOSSES ON  QUALIFYING  REAL
 PROPERTY  LOANS  FOR  THE  TAXABLE YEAR IN WHICH THE DISTRIBUTION OCCURS
 SHALL BE TAKEN INTO ACCOUNT.
   (II)  FOR  PURPOSES OF COMPUTING UNDER THIS SUBSECTION THE AMOUNT OF A
 REASONABLE ADDITION TO THE NEW YORK RESERVE  FOR  LOSSES  ON  QUALIFYING
 REAL  PROPERTY LOANS FOR ANY TAXABLE YEAR, THE AMOUNT CHARGED DURING ANY
 YEAR TO SUCH RESERVE PURSUANT TO THE PROVISIONS OF SUBPARAGRAPH  (B)  OF
 THIS PARAGRAPH SHALL NOT BE TAKEN INTO ACCOUNT.
   (9) A TAXPAYER WHICH MAINTAINS A NEW YORK RESERVE FOR LOSSES ON QUALI-
 FYING  REAL  PROPERTY LOANS AND WHICH CEASES TO MEET THE DEFINITION OF A
 THRIFT INSTITUTION AS DEFINED IN PARAGRAPH ONE OF THIS SUBSECTION,  MUST
 INCLUDE  IN  ITS  ENTIRE NET INCOME FOR THE LAST TAXABLE YEAR SUCH PARA-
 GRAPH APPLIED THE EXCESS OF ITS NEW YORK RESERVE FOR LOSSES ON  QUALIFY-
 ING  REAL  PROPERTY LOANS OVER THE GREATER OF (A) ITS RESERVE FOR LOSSES
 ON QUALIFYING REAL PROPERTY LOANS AS OF THE LAST DAY OF THE LAST TAXABLE
 YEAR SUCH RESERVE IS MAINTAINED FOR FEDERAL INCOME TAX PURPOSES  OR  (B)
 THE  BALANCE OF THE NEW YORK RESERVE FOR LOSSES ON QUALIFYING REAL PROP-
 ERTY LOANS WHICH WOULD BE ALLOWABLE TO THE TAXPAYER FOR THE LAST TAXABLE
 YEAR SUCH TAXPAYER MET SUCH DEFINITION OF A THRIFT  INSTITUTION  IF  THE
 TAXPAYER  HAD  COMPUTED  ITS  RESERVE  BALANCE  PURSUANT  TO  THE METHOD
 DESCRIBED IN SUBPARAGRAPH (A) OF PARAGRAPH ONE OF SUBSECTION (I) OF THIS
 SECTION.
   (I) (1) FOR TAXABLE YEARS BEGINNING BEFORE JANUARY FIRST, TWO THOUSAND
 TEN, A TAXPAYER SUBJECT TO THE  PROVISIONS  OF  SECTION  585(C)  OF  THE
 INTERNAL  REVENUE CODE AND NOT SUBJECT TO SUBSECTION (H) OF THIS SECTION
 MAY, IN COMPUTING ENTIRE NET INCOME, DEDUCT AN AMOUNT EQUAL TO  OR  LESS
 THAN  THE  AMOUNT  DETERMINED PURSUANT TO SUBPARAGRAPH (A) OF THIS PARA-
 GRAPH OR SUBPARAGRAPH (B)  OF  THIS  PARAGRAPH,  WHICHEVER  IS  GREATER.
 PROVIDED,  HOWEVER,  IN  NO  EVENT  SHALL THE DEDUCTION BE LESS THAN THE
 AMOUNT DETERMINED PURSUANT TO SUCH SUBPARAGRAPH (A).
   (A) THE AMOUNT DETERMINED PURSUANT TO THIS SUBPARAGRAPH SHALL  BE  THE
 AMOUNT  NECESSARY  TO  INCREASE  THE BALANCE OF ITS NEW YORK RESERVE FOR
 LOSSES ON LOANS (AT THE CLOSE OF THE TAXABLE YEAR) TO THE  AMOUNT  WHICH
 BEARS  THE  SAME  RATIO TO LOANS OUTSTANDING AT THE CLOSE OF THE TAXABLE
 YEAR AS (I) THE TOTAL BAD DEBTS SUSTAINED DURING THE  TAXABLE  YEAR  AND
 THE  FIVE  PRECEDING TAXABLE YEARS (OR, WITH THE APPROVAL OF THE COMMIS-
 SIONER OF TAXATION AND FINANCE, A SHORTER PERIOD), ADJUSTED  FOR  RECOV-
 ERIES  OF  BAD  DEBTS  DURING  SUCH PERIOD, BEARS TO (II) THE SUM OF THE
 LOANS OUTSTANDING AT THE CLOSE OF SUCH SIX OR FEWER TAXABLE YEARS.
   (B) (I) THE AMOUNT DETERMINED PURSUANT TO THIS SUBPARAGRAPH  SHALL  BE
 THE AMOUNT NECESSARY TO INCREASE THE BALANCE OF ITS NEW YORK RESERVE FOR
 LOSSES ON LOANS (AT THE CLOSE OF THE TAXABLE YEAR) TO THE LOWER OF --
   (I) THE BALANCE OF THE RESERVE AT THE CLOSE OF THE BASE YEAR, OR
   (II)  IF  THE  AMOUNT OF LOANS OUTSTANDING AT THE CLOSE OF THE TAXABLE
 YEAR IS LESS THAN THE AMOUNT OF LOANS OUTSTANDING AT THE  CLOSE  OF  THE
 BASE YEAR, THE AMOUNT WHICH BEARS THE SAME RATIO TO LOANS OUTSTANDING AT
 THE CLOSE OF THE TAXABLE YEAR AS THE BALANCE OF THE RESERVE AT THE CLOSE
 OF  THE  BASE YEAR BEARS TO THE AMOUNT OF LOANS OUTSTANDING AT THE CLOSE
 OF THE BASE YEAR.
   (II) FOR PURPOSES OF THIS PARAGRAPH, THE BASE YEAR SHALL  BE  (I)  FOR
 TAXABLE YEARS BEGINNING IN NINETEEN HUNDRED EIGHTY-SEVEN, THE LAST TAXA-
 BLE  YEAR  BEFORE  THE MOST RECENT ADOPTION OF THE EXPERIENCE METHOD FOR
 FEDERAL INCOME TAX PURPOSES OR FOR PURPOSES OF THIS  ARTICLE,  WHICHEVER
 IS  EARLIER, AND (II) FOR TAXABLE YEARS BEGINNING AFTER NINETEEN HUNDRED

 S. 1680                            31
 
 EIGHTY-SEVEN, THE LAST TAXABLE YEAR BEGINNING  BEFORE  NINETEEN  HUNDRED
 EIGHTY-EIGHT.
   (2) (A) FOR TAXABLE YEARS BEGINNING BEFORE JANUARY FIRST, TWO THOUSAND
 TEN,  EACH  TAXPAYER DESCRIBED IN PARAGRAPH ONE OF THIS SUBSECTION SHALL
 ESTABLISH AND MAINTAIN A NEW YORK RESERVE  FOR  LOSSES  ON  LOANS.  SUCH
 RESERVE  SHALL  BE  MAINTAINED  FOR  ALL  SUBSEQUENT  TAXABLE YEARS. THE
 BALANCE OF THE NEW YORK RESERVE FOR LOSSES ON LOANS AT THE BEGINNING  OF
 THE  FIRST DAY OF THE FIRST TAXABLE YEAR THE TAXPAYER BECOMES SUBJECT TO
 THIS SUBSECTION SHALL BE THE SAME AS THE BALANCE  AT  THE  BEGINNING  OF
 SUCH  DAY  OF  THE  RESERVE  FOR  LOSSES ON LOANS MAINTAINED FOR FEDERAL
 INCOME TAX PURPOSES. THE NEW YORK RESERVE FOR LOSSES ON LOANS  SHALL  BE
 REDUCED  BY  AN AMOUNT EQUAL TO THE DEDUCTION ALLOWED, BUT NOT MORE THAN
 THE AMOUNT  ALLOWABLE,  FOR  WORTHLESS  DEBTS  FOR  FEDERAL  INCOME  TAX
 PURPOSES  PURSUANT  TO SECTION 166 OF THE INTERNAL REVENUE CODE PLUS THE
 AMOUNT, IF ANY, CHARGED AGAINST ITS RESERVE FOR LOSSES ON LOANS PURSUANT
 TO SECTION 585(C)(4) OF SUCH CODE.
   (B) FOR PURPOSES OF SUBPARAGRAPH (A) OF  THIS  PARAGRAPH,  A  TAXPAYER
 WHICH HAD PREVIOUSLY BEEN SUBJECT TO THE PROVISIONS OF SUBSECTION (H) OF
 THIS  SECTION  SHALL  ESTABLISH  A  NEW YORK RESERVE FOR LOSSES ON LOANS
 EQUAL TO THE SUM OF (I) THE GREATER OF (I) THE BALANCE  OF  ITS  FEDERAL
 RESERVE FOR LOSSES ON QUALIFYING REAL PROPERTY LOANS AS OF THE FIRST DAY
 OF THE FIRST TAXABLE YEAR THE TAXPAYER BECOMES SUBJECT TO THE PROVISIONS
 OF  THIS  SUBSECTION OR (II) THE GREATER OF THE AMOUNTS DETERMINED UNDER
 SUBPARAGRAPHS (A) AND (B) OF PARAGRAPH NINE OF SUBSECTION  (H)  OF  THIS
 SECTION  IN  THE  YEAR  SUCH PARAGRAPH APPLIED TO THE TAXPAYER, (II) THE
 GREATER OF (I) THE BALANCE IN ITS FEDERAL RESERVE FOR LOSSES ON NONQUAL-
 IFYING LOANS AS OF THE FIRST DAY OF THE FIRST TAXABLE YEAR THE  TAXPAYER
 BECOMES  SUBJECT  TO THIS SUBSECTION OR (II) THE BALANCE IN ITS NEW YORK
 RESERVE FOR LOSSES ON NONQUALIFYING  LOANS  AS  OF  THE  LAST  DATE  THE
 TAXPAYER WAS SUBJECT TO THE PROVISIONS OF SUBSECTION (H) OF THIS SECTION
 AND (III) THE BALANCE IN ITS SUPPLEMENTAL RESERVE FOR LOSSES ON LOANS AS
 OF  THE  LAST  DATE  THE  TAXPAYER  WAS  SUBJECT  TO  THE  PROVISIONS OF
 SUBSECTION (H) OF THIS SECTION.
   (3) THE DETERMINATION AND TREATMENT OF THE NEW YORK  RESERVE  BALANCE,
 INCLUDING  ANY  ADDITIONS  THERETO, SUBTRACTIONS THEREFROM, OR RECAPTURE
 THEREOF, FOR
   (A) ANY BANKING CORPORATION WHICH  WAS  SUBJECT  TO  TAX  FOR  FEDERAL
 INCOME  TAX PURPOSES BUT NOT SUBJECT TO TAX UNDER THIS ARTICLE FOR PRIOR
 TAXABLE YEARS,
   (B) ANY TAXPAYER WHICH CEASES TO BE SUBJECT TO TAX UNDER THIS ARTICLE,
 OR
   (C) ANY OTHER UNUSUAL CIRCUMSTANCES
 SHALL BE  DETERMINED  BY  THE  COMMISSIONER  OF  TAXATION  AND  FINANCE.
 PROVIDED,  HOWEVER, ANY BANKING CORPORATION WHICH WAS SUBJECT TO TAX FOR
 FEDERAL INCOME TAX PURPOSES BUT NOT SUBJECT TO TAX  UNDER  THIS  ARTICLE
 FOR  PRIOR  TAXABLE YEARS SHALL HAVE AS ITS OPENING NEW YORK RESERVE FOR
 LOSSES ON LOANS THE AMOUNT DETERMINED  BY  APPLYING  THE  PROVISIONS  OF
 SUBPARAGRAPH  (A) OF PARAGRAPH ONE OF THIS SUBSECTION TO LOANS OUTSTAND-
 ING AT THE CLOSE OF  ITS  LAST  TAXABLE  YEAR  FOR  FEDERAL  INCOME  TAX
 PURPOSES  ENDING  PRIOR TO THE FIRST TAXABLE YEAR FOR WHICH THE TAXPAYER
 IS SUBJECT TO TAX UNDER THIS ARTICLE AND  PROVIDED,  FURTHER,  THAT  THE
 PROVISIONS OF SUBPARAGRAPH (B) OF PARAGRAPH ONE OF THIS SUBSECTION SHALL
 NOT APPLY.
   (J)  (1)  IN  THE  CASE OF PROPERTY PLACED IN SERVICE PRIOR TO JANUARY
 FIRST, NINETEEN HUNDRED SEVENTY-THREE, FOR WHICH THE  TAXPAYER  PROPERLY
 ADOPTED  A  DIFFERENT METHOD OF COMPUTING DEPRECIATION UNDER SECTION TWO

 S. 1680                            32
 
 HUNDRED NINETEEN-Z OR SECTION TWO HUNDRED NINETEEN-XX  OF  THIS  CHAPTER
 (AS  SUCH  SECTIONS  WERE  IN EFFECT ON OR BEFORE DECEMBER THIRTY-FIRST,
 NINETEEN HUNDRED SEVENTY-TWO) THAN WAS ADOPTED FOR  FEDERAL  INCOME  TAX
 PURPOSES  WITH  RESPECT  TO  SUCH PROPERTY, ENTIRE NET INCOME UNDER THIS
 ARTICLE SHALL BE COMPUTED WITHOUT REGARD TO THE AMOUNT  ALLOWABLE  AS  A
 DEDUCTION FOR DEPRECIATION OF SUCH PROPERTY IN COMPUTING FEDERAL TAXABLE
 INCOME  FOR  THE TAXABLE YEAR BUT, IN LIEU THEREOF, SHALL BE COMPUTED AS
 IF SUCH DEDUCTION WERE DETERMINED BY THE METHOD OF DEPRECIATION  ADOPTED
 WITH  RESPECT  TO SUCH PROPERTY UNDER SECTIONS TWO HUNDRED NINETEEN-Z OR
 TWO HUNDRED NINETEEN-XX OF THIS CHAPTER (AS SUCH SECTIONS WERE IN EFFECT
 ON OR BEFORE DECEMBER THIRTY-FIRST, NINETEEN HUNDRED SEVENTY-TWO).
   (2) IN  COMPUTING  ENTIRE  NET  INCOME,  THE  AMOUNT  ALLOWABLE  AS  A
 DEDUCTION  FOR  CHARITABLE CONTRIBUTIONS FOR FEDERAL INCOME TAX PURPOSES
 SHALL BE DECREASED BY ANY AMOUNT ALLOWED  AS  A  DEDUCTION  FOR  FEDERAL
 INCOME  TAX  PURPOSES  FOR  THE  TAXABLE  YEAR UNDER SECTION ONE HUNDRED
 SEVENTY OF THE INTERNAL REVENUE CODE AS A CARRYOVER OF  EXCESS  CONTRIB-
 UTIONS WHICH ARE NOT MADE IN SUCH TAXABLE YEAR AND WHICH WERE DEDUCTIBLE
 IN  COMPUTING THE TAX DUE UNDER ARTICLE NINE-B OR NINE-C OF THIS CHAPTER
 (AS SUCH ARTICLES WERE IN EFFECT ON  OR  BEFORE  DECEMBER  THIRTY-FIRST,
 NINETEEN HUNDRED SEVENTY-TWO).
   (3)  THERE SHALL BE EXCLUDED FROM THE COMPUTATION OF ENTIRE NET INCOME
 ANY AMOUNT ALLOWED AS A DEDUCTION FOR FEDERAL INCOME  TAX  PURPOSES  FOR
 THE  TAXABLE  YEAR  UNDER  SECTION TWELVE HUNDRED TWELVE OF THE INTERNAL
 REVENUE CODE AS A CAPITAL LOSS CARRYFORWARD TO THE TAXABLE  YEAR,  WHICH
 WAS  DEDUCTIBLE  AS A LOSS IN COMPUTING THE TAX DUE UNDER ARTICLE NINE-B
 OR NINE-C OF THIS CHAPTER (AS SUCH ARTICLES WERE IN EFFECT  ON  DECEMBER
 THIRTY-FIRST, NINETEEN HUNDRED SEVENTY-TWO).
   (4)  THERE SHALL BE EXCLUDED FROM THE COMPUTATION OF ENTIRE NET INCOME
 THE AMOUNT OF ANY INCOME OR GAIN FROM THE SALE OF REAL OR PERSONAL PROP-
 ERTY WHICH IS INCLUDIBLE IN DETERMINING FEDERAL TAXABLE INCOME  FOR  THE
 TAXABLE  YEAR  PURSUANT  TO  THE  INSTALLMENT  METHOD UNDER SECTION FOUR
 HUNDRED FIFTY-THREE OF THE INTERNAL REVENUE CODE,  TO  THE  EXTENT  THAT
 SUCH  INCOME  OR  GAIN  WAS INCLUDIBLE IN THE COMPUTATION OF THE TAX DUE
 UNDER ARTICLE NINE-B OR NINE-C OF THIS CHAPTER (AS SUCH ARTICLES WERE IN
 EFFECT ON DECEMBER THIRTY-FIRST, NINETEEN HUNDRED SEVENTY-TWO).
   (5) TO THE EXTENT NOT OTHERWISE PROVIDED IN THIS ARTICLE, THERE  SHALL
 BE  EXCLUDED  FROM ENTIRE NET INCOME THE AMOUNT NECESSARY TO PREVENT THE
 TAXATION UNDER THIS ARTICLE OF ANY OTHER AMOUNT OF INCOME OR GAIN  WHICH
 WAS  PROPERLY  INCLUDED  IN INCOME OR GAIN AND WAS TAXABLE UNDER ARTICLE
 NINE-B OR NINE-C OF THIS CHAPTER (AS SUCH ARTICLES WERE IN EFFECT ON  OR
 BEFORE  DECEMBER  THIRTY-FIRST,  NINETEEN HUNDRED SEVENTY-TWO) AND THERE
 SHALL BE DISALLOWED AS A DEDUCTION IN COMPUTING ENTIRE  NET  INCOME  ANY
 AMOUNT WHICH WAS ALLOWABLE AS A DEDUCTION IN COMPUTING THE TAX DUE UNDER
 SUCH  ARTICLES  (AS  THEY  WERE  IN EFFECT ON OR BEFORE DECEMBER THIRTY-
 FIRST, NINETEEN HUNDRED SEVENTY-TWO).
   (K) (1) AT THE ELECTION OF THE TAXPAYER, THERE SHALL BE DEDUCTED  FROM
 THE  PORTION OF ITS ENTIRE NET INCOME ALLOCATED WITHIN THE STATE, DEPRE-
 CIATION WITH RESPECT TO ANY PROPERTY SUCH AS DESCRIBED IN PARAGRAPH  TWO
 OF  THIS  SUBSECTION,  NOT EXCEEDING TWICE THE DEPRECIATION ALLOWED WITH
 RESPECT TO THE SAME PROPERTY  FOR  FEDERAL  INCOME  TAX  PURPOSES.  SUCH
 DEDUCTION SHALL BE ALLOWED ONLY UPON CONDITION THAT ENTIRE NET INCOME BE
 COMPUTED  WITHOUT  ANY DEDUCTION FOR DEPRECIATION OR AMORTIZATION OF THE
 SAME PROPERTY, AND THE TOTAL OF ALL  DEDUCTIONS  ALLOWED  UNDER  ARTICLE
 NINE-B  OR NINE-C OF THIS CHAPTER (AS SUCH ARTICLES WERE IN EFFECT ON OR
 BEFORE DECEMBER THIRTY-FIRST, NINETEEN  HUNDRED  SEVENTY-TWO)  AND  THIS

 S. 1680                            33
 
 ARTICLE IN ANY TAXABLE YEAR OR YEARS WITH RESPECT TO THE DEPRECIATION OF
 ANY SUCH PROPERTY SHALL NOT EXCEED ITS COST OR OTHER BASIS.
   (2)  SUCH  DEDUCTION  SHALL  BE  ALLOWED ONLY WITH RESPECT TO TANGIBLE
 PROPERTY WHICH IS DEPRECIABLE PURSUANT TO SECTION ONE HUNDRED SIXTY-SEV-
 EN OF THE INTERNAL REVENUE CODE, HAVING A SITUS IN THIS STATE  AND  USED
 IN  THE  TAXPAYER'S  BUSINESS, (I) CONSTRUCTED, RECONSTRUCTED OR ERECTED
 AFTER DECEMBER THIRTY-FIRST, NINETEEN HUNDRED SIXTY-THREE, PURSUANT TO A
 CONTRACT WHICH WAS, ON OR BEFORE DECEMBER THIRTY-FIRST, NINETEEN HUNDRED
 SIXTY-SEVEN, AND AT ALL TIMES THEREAFTER, BINDING ON  THE  TAXPAYER  OR,
 PROPERTY, THE PHYSICAL CONSTRUCTION, RECONSTRUCTION OR ERECTION OF WHICH
 BEGAN  ON  OR BEFORE DECEMBER THIRTY-FIRST, NINETEEN HUNDRED SIXTY-SEVEN
 OR WHICH BEGAN AFTER SUCH DATE PURSUANT TO AN ORDER PLACED ON OR  BEFORE
 DECEMBER  THIRTY-FIRST, NINETEEN HUNDRED SIXTY-SEVEN, AND THEN ONLY WITH
 RESPECT TO THAT PORTION OF THE BASIS THEREOF WHICH IS PROPERLY ATTRIBUT-
 ABLE TO SUCH CONSTRUCTION, RECONSTRUCTION  OR  ERECTION  AFTER  DECEMBER
 THIRTY-FIRST,  NINETEEN  HUNDRED  SIXTY-THREE,  OR  (II)  ACQUIRED AFTER
 DECEMBER THIRTY-FIRST,  NINETEEN  HUNDRED  SIXTY-THREE,  PURSUANT  TO  A
 CONTRACT WHICH WAS, ON OR BEFORE DECEMBER THIRTY-FIRST, NINETEEN HUNDRED
 SIXTY-SEVEN,  AND  AT  ALL  TIMES THEREAFTER, BINDING ON THE TAXPAYER OR
 PURSUANT TO AN ORDER PLACED ON OR BEFORE DECEMBER THIRTY-FIRST, NINETEEN
 HUNDRED SIXTY-SEVEN, BY PURCHASE  AS  DEFINED  IN  SECTION  ONE  HUNDRED
 SEVENTY-NINE  (D)  OF  THE INTERNAL REVENUE CODE, IF THE ORIGINAL USE OF
 SUCH PROPERTY COMMENCED WITH THE TAXPAYER, COMMENCED IN THIS  STATE  AND
 COMMENCED  AFTER DECEMBER THIRTY-FIRST, NINETEEN HUNDRED SIXTY-THREE, OR
 (III) ACQUIRED, CONSTRUCTED, RECONSTRUCTED,  OR  ERECTED  SUBSEQUENT  TO
 DECEMBER THIRTY-FIRST NINETEEN HUNDRED SIXTY-SEVEN, IF SUCH ACQUISITION,
 CONSTRUCTION,  RECONSTRUCTION  OR  ERECTION IS PURSUANT TO A PLAN OF THE
 TAXPAYER WHICH WAS IN EXISTENCE DECEMBER THIRTY-FIRST, NINETEEN  HUNDRED
 SIXTY-SEVEN AND NOT THEREAFTER SUBSTANTIALLY MODIFIED, AND SUCH ACQUISI-
 TION,  CONSTRUCTION,  RECONSTRUCTION OR ERECTION WOULD QUALIFY UNDER THE
 RULES IN PARAGRAPHS FOUR, FIVE OR  SIX  OF  SUBSECTION  (H)  OF  SECTION
 FORTY-EIGHT OF THE INTERNAL REVENUE CODE PROVIDED ALL REFERENCES IN SUCH
 PARAGRAPHS  FOUR,  FIVE  AND  SIX  TO  THE  DATES OCTOBER NINE, NINETEEN
 HUNDRED SIXTY-SIX, AND OCTOBER TEN, NINETEEN HUNDRED SIXTY-SIX, SHALL BE
 READ AS DECEMBER THIRTY-FIRST, NINETEEN HUNDRED SIXTY-SEVEN. A  TAXPAYER
 SHALL  BE  ALLOWED  A DEDUCTION UNDER CLAUSES (I), (II) OR (III) OF THIS
 PARAGRAPH ONLY IF THE  TANGIBLE  PROPERTY  SHALL  BE  DELIVERED  OR  THE
 CONSTRUCTION, RECONSTRUCTION OR ERECTION SHALL BE COMPLETED ON OR BEFORE
 DECEMBER  THIRTY-FIRST,  NINETEEN HUNDRED SIXTY-NINE, EXCEPT IN THE CASE
 OF TANGIBLE PROPERTY WHICH IS ACQUIRED,  CONSTRUCTED,  RECONSTRUCTED  OR
 ERECTED  PURSUANT TO A CONTRACT WHICH WAS, ON OR BEFORE DECEMBER THIRTY-
 FIRST, NINETEEN HUNDRED SIXTY-SEVEN, AND AT ALL TIMES THEREAFTER,  BIND-
 ING  ON  THE TAXPAYER. PROVIDED, HOWEVER, FOR ANY TAXABLE YEAR BEGINNING
 ON OR AFTER JANUARY FIRST,  NINETEEN  HUNDRED  SIXTY-EIGHT,  A  TAXPAYER
 SHALL  NOT BE ALLOWED A DEDUCTION UNDER PARAGRAPH ONE OF THIS SUBSECTION
 WITH RESPECT TO TANGIBLE PERSONAL PROPERTY LEASED BY  IT  TO  ANY  OTHER
 PERSON  OR  CORPORATION.  FOR  PURPOSES  OF  THE PRECEDING SENTENCE, ANY
 CONTRACT OR AGREEMENT TO LEASE OR RENT OR FOR  A  LICENSE  TO  USE  SUCH
 PROPERTY SHALL BE CONSIDERED A LEASE. WITH RESPECT TO PROPERTY WHICH THE
 TAXPAYER USES ITSELF FOR PURPOSES OTHER THAN LEASING FOR PART OF A TAXA-
 BLE  YEAR AND LEASES FOR A PART OF A TAXABLE YEAR, THE TAXPAYER SHALL BE
 ALLOWED A DEDUCTION UNDER PARAGRAPH ONE OF THIS SUBSECTION IN PROPORTION
 TO THE PART OF THE YEAR IT USES SUCH PROPERTY.
   (3) IF THE DEDUCTION ALLOWABLE FOR ANY TAXABLE YEAR PURSUANT  TO  THIS
 SUBSECTION EXCEEDS THE PORTION OF THE TAXPAYER'S ENTIRE NET INCOME ALLO-
 CATED TO THIS STATE FOR SUCH YEAR, THE EXCESS MAY BE CARRIED OVER TO THE

 S. 1680                            34
 
 FOLLOWING  TAXABLE YEAR OR YEARS AND MAY BE DEDUCTED FROM THE PORTION OF
 THE TAXPAYER'S ENTIRE NET INCOME ALLOCATED TO THIS STATE FOR  SUCH  YEAR
 OR YEARS.
   (4)  IN  ANY  TAXABLE YEAR WHEN PROPERTY IS SOLD OR OTHERWISE DISPOSED
 OF, WITH RESPECT TO WHICH A DEDUCTION HAS BEEN ALLOWED PURSUANT TO  THIS
 SUBSECTION,  SUBDIVISION  TWELVE  OF  SECTION  TWO HUNDRED NINETEEN-Z OR
 SUBDIVISION TEN OF SECTION TWO HUNDRED NINETEEN-XX OF THIS  CHAPTER  (AS
 SUCH  SUBDIVISIONS  WERE  IN  EFFECT ON OR BEFORE DECEMBER THIRTY-FIRST,
 NINETEEN HUNDRED SEVENTY-TWO), THE GAIN OR LOSS ENTERING INTO THE COMPU-
 TATION OF FEDERAL TAXABLE  INCOME  SHALL  BE  DISREGARDED  IN  COMPUTING
 ENTIRE  NET  INCOME,  AND  THERE  SHALL  BE ADDED OR SUBTRACTED FROM THE
 PORTION OF ENTIRE NET INCOME ALLOCATED WITHIN THE STATE THE GAIN OR LOSS
 UPON SUCH SALE OR OTHER DISPOSITION. IN COMPUTING SUCH GAIN OR LOSS  THE
 BASIS  OF  THE PROPERTY SOLD OR DISPOSED OF SHALL BE ADJUSTED TO REFLECT
 THE DEDUCTION ALLOWED WITH RESPECT TO SUCH PROPERTY  PURSUANT  TO  PARA-
 GRAPH  ONE  OF  THIS SUBSECTION. PROVIDED HOWEVER, THAT NO LOSS SHALL BE
 RECOGNIZED FOR THE PURPOSES OF THIS PARAGRAPH WITH RESPECT TO A SALE  OR
 OTHER  DISPOSITION  OF PROPERTY TO A PERSON WHOSE ACQUISITION THEREOF IS
 NOT A PURCHASE AS DEFINED IN SECTION ONE HUNDRED SEVENTY-NINE (D) OF THE
 INTERNAL REVENUE CODE.
   (K-1) A NET OPERATING LOSS DEDUCTION SHALL BE ALLOWED WHICH  SHALL  BE
 PRESUMABLY  THE  SAME  AS THE NET OPERATING LOSS DEDUCTION ALLOWED UNDER
 SECTION ONE HUNDRED SEVENTY-TWO OF THE  INTERNAL  REVENUE  CODE,  EXCEPT
 THAT  IN EVERY INSTANCE WHERE SUCH DEDUCTION IS ALLOWED UNDER THIS ARTI-
 CLE:
   (1) ANY NET OPERATING LOSS  INCLUDED  IN  DETERMINING  SUCH  DEDUCTION
 SHALL  BE  ADJUSTED TO REFLECT THE INCLUSIONS AND EXCLUSIONS FROM ENTIRE
 NET INCOME REQUIRED BY THE OTHER PROVISIONS OF THIS SECTION,
   (2) SUCH DEDUCTION SHALL NOT INCLUDE ANY NET OPERATING LOSS  SUSTAINED
 DURING  ANY  TAXABLE YEAR BEGINNING PRIOR TO JANUARY FIRST, TWO THOUSAND
 ONE, OR DURING ANY TAXABLE YEAR IN WHICH THE TAXPAYER WAS NOT SUBJECT TO
 THE TAX IMPOSED BY THIS ARTICLE,
   (3) SUCH DEDUCTION SHALL NOT EXCEED THE DEDUCTION FOR THE TAXABLE YEAR
 ALLOWED UNDER SECTION ONE HUNDRED SEVENTY-TWO OF  THE  INTERNAL  REVENUE
 CODE AUGMENTED BY THE EXCESS OF THE AMOUNT ALLOWED AS A DEDUCTION PURSU-
 ANT  TO  SUBSECTION (H) OR (I) OF THIS SECTION, WHICHEVER IS APPLICABLE,
 OVER THE AMOUNT ALLOWED AS A DEDUCTION PURSUANT TO SECTION 166 OR 585 OF
 THE INTERNAL REVENUE CODE, FOR EACH TAXABLE YEAR IN WHICH  THE  TAXPAYER
 HAD  A  NET  OPERATING  LOSS WHICH IS CARRIED TO THE TAXABLE YEAR OF THE
 DEDUCTION UNDER THIS PROVISION, IN THE AGGREGATE, (EXCEPT TO THE  EXTENT
 SUCH EXCESS WAS PREVIOUSLY DEDUCTED IN COMPUTING ENTIRE NET INCOME), AND
   (4) THE NET OPERATING LOSS DEDUCTION ALLOWED UNDER SECTION ONE HUNDRED
 SEVENTY-TWO  OF  THE  INTERNAL  REVENUE  CODE SHALL FOR PURPOSES OF THIS
 SUBSECTION BE DETERMINED AS IF  THE  TAXPAYER  HAD  ELECTED  UNDER  SUCH
 SECTION  TO  RELINQUISH  THE ENTIRE CARRYBACK PERIOD WITH RESPECT TO NET
 OPERATING LOSSES.
   (L) IN THE CASE OF A SAVINGS AND INSURANCE BANK WHICH CONDUCTS A  LIFE
 INSURANCE BUSINESS THROUGH A LIFE INSURANCE DEPARTMENT UNDER THE AUTHOR-
 ITY  OF FORMER ARTICLE SIX-A OF THE BANKING LAW, ENTIRE NET INCOME MEANS
 THE FEDERAL TAXABLE INCOME WHICH SUCH BANK IS REQUIRED TO REPORT TO  THE
 UNITED  STATES TREASURY DEPARTMENT UNDER PARAGRAPH ONE OF SUBSECTION (A)
 OF SECTION FIVE HUNDRED NINETY-FOUR OF THE INTERNAL REVENUE CODE AND THE
 MODIFICATIONS REQUIRED BY THIS SECTION IN COMPUTING  ENTIRE  NET  INCOME
 SHALL ONLY BE MADE WITH RESPECT TO SUCH FEDERAL TAXABLE INCOME.

 S. 1680                            35
 
   (M) IF THE PERIOD COVERED BY A RETURN UNDER THIS ARTICLE IS OTHER THAN
 THE  PERIOD  COVERED BY THE RETURN TO THE UNITED STATES TREASURY DEPART-
 MENT,
   (1) EXCEPT AS PROVIDED IN PARAGRAPH TWO OF THIS SUBSECTION, ENTIRE NET
 INCOME  AND  ALTERNATIVE ENTIRE NET INCOME SHALL BE DETERMINED BY MULTI-
 PLYING THE TAXABLE INCOME  REPORTED  TO  SUCH  DEPARTMENT  (AS  ADJUSTED
 PURSUANT  TO  THE  PROVISIONS OF THIS ARTICLE) BY THE NUMBER OF CALENDAR
 MONTHS OR MAJOR PARTS THEREOF COVERED BY THE RETURN UNDER  THIS  ARTICLE
 AND  DIVIDING  BY  THE  NUMBER OF CALENDAR MONTHS OR MAJOR PARTS THEREOF
 COVERED BY THE RETURN TO SUCH DEPARTMENT. IF IT SHALL APPEAR  THAT  SUCH
 METHOD OF DETERMINING ENTIRE NET INCOME OR ALTERNATIVE ENTIRE NET INCOME
 DOES  NOT  PROPERLY  REFLECT  THE  TAXPAYER'S  INCOME  DURING THE PERIOD
 COVERED BY THE RETURN UNDER THIS  ARTICLE,  THE  COMMISSIONER  SHALL  BE
 AUTHORIZED  IN HIS OR HER DISCRETION TO DETERMINE SUCH ENTIRE NET INCOME
 OR ALTERNATIVE ENTIRE NET INCOME SOLELY ON THE BASIS OF  THE  TAXPAYER'S
 INCOME DURING THE PERIOD COVERED BY ITS RETURN UNDER THIS ARTICLE.
   (2)  IN THE CASE OF A NEW YORK S TERMINATION YEAR, AN EQUAL PORTION OF
 ENTIRE NET INCOME SHALL BE ASSIGNED  TO  EACH  DAY  OF  SUCH  YEAR.  THE
 PORTION  OF  SUCH ENTIRE NET INCOME THEREBY ASSIGNED TO THE S SHORT YEAR
 AND THE C SHORT YEAR SHALL BE INCLUDED IN THE RESPECTIVE RETURNS FOR THE
 S SHORT YEAR AND THE C SHORT YEAR UNDER  THIS  ARTICLE.  HOWEVER,  WHERE
 PARAGRAPH  THREE OF SUBSECTION (S) OF SECTION SIX HUNDRED TWELVE OF THIS
 CHAPTER APPLIES, THE PORTION OF SUCH ENTIRE NET INCOME ASSIGNED TO THE S
 SHORT YEAR AND THE  C  SHORT  YEAR  SHALL  BE  DETERMINED  UNDER  NORMAL
 ACCOUNTING RULES.
   (N)  THE  TAX  COMMISSION MAY, WHENEVER NECESSARY IN ORDER PROPERLY TO
 REFLECT THE ENTIRE NET INCOME OF ANY TAXPAYER,  DETERMINE  THE  YEAR  OR
 PERIOD IN WHICH ANY ITEM OF INCOME OR DEDUCTION SHALL BE INCLUDED, WITH-
 OUT REGARD TO THE METHOD OF ACCOUNTING EMPLOYED BY THE TAXPAYER.
   (O)  QSSS.  (1)  NEW  YORK  S CORPORATION. IN THE CASE OF A NEW YORK S
 CORPORATION WHICH IS THE PARENT OF A QUALIFIED SUBCHAPTER  S  SUBSIDIARY
 (QSSS) WITH RESPECT TO A TAXABLE YEAR:
   (A) WHERE THE QSSS IS NOT AN EXCLUDED CORPORATION,
   (I)  IN  DETERMINING THE ENTIRE NET INCOME OF SUCH PARENT CORPORATION,
 ALL ASSETS, LIABILITIES, INCOME AND DEDUCTIONS  OF  THE  QSSS  SHALL  BE
 TREATED  AS  ASSETS,  LIABILITIES,  INCOME  AND DEDUCTIONS OF THE PARENT
 CORPORATION, AND
   (II) THE QSSS SHALL BE EXEMPT FROM ALL TAXES IMPOSED BY THIS  ARTICLE,
 AND
   (B)  WHERE  THE QSSS IS AN EXCLUDED CORPORATION, THE ENTIRE NET INCOME
 OF THE PARENT CORPORATION SHALL BE DETERMINED AS  IF  THE  FEDERAL  QSSS
 ELECTION HAD NOT BEEN MADE.
   (2)  NEW  YORK  C CORPORATION. IN THE CASE OF A NEW YORK C CORPORATION
 WHICH IS THE PARENT OF A QSSS WITH RESPECT TO A TAXABLE YEAR:
   (A) WHERE THE QSSS IS A TAXPAYER,
   (I) IN DETERMINING THE ENTIRE NET INCOME OF SUCH  PARENT  CORPORATION,
 ALL  ASSETS,  LIABILITIES,  INCOME  AND  DEDUCTIONS OF THE QSSS SHALL BE
 TREATED AS ASSETS, LIABILITIES, INCOME  AND  DEDUCTIONS  OF  THE  PARENT
 CORPORATION, AND
   (II)  THE QSSS SHALL BE EXEMPT FROM ALL TAXES IMPOSED BY THIS ARTICLE,
 AND
   (B) WHERE THE QSSS IS NOT A TAXPAYER,
   (I) IF THE QSSS IS NOT AN EXCLUDED CORPORATION, THE PARENT CORPORATION
 MAY MAKE A QSSS INCLUSION ELECTION TO INCLUDE ALL  ASSETS,  LIABILITIES,
 INCOME  AND  DEDUCTIONS  OF  THE QSSS AS ASSETS, LIABILITIES, INCOME AND
 DEDUCTIONS OF THE PARENT CORPORATION, AND

 S. 1680                            36
 
   (II) IN THE ABSENCE OF SUCH ELECTION, OR WHERE THE QSSS IS AN EXCLUDED
 CORPORATION, THE ENTIRE NET INCOME OF THE PARENT  CORPORATION  SHALL  BE
 DETERMINED AS IF THE FEDERAL QSSS ELECTION HAD NOT BEEN MADE.
   (3)  NON-NEW  YORK  S  CORPORATION  NOT  EXCLUDED. IN THE CASE OF AN S
 CORPORATION WHICH IS NOT A TAXPAYER AND NOT AN EXCLUDED CORPORATION, AND
 WHICH IS THE PARENT OF A QSSS WHICH IS A TAXPAYER, THE  SHAREHOLDERS  OF
 THE PARENT CORPORATION SHALL BE ENTITLED TO MAKE THE NEW YORK S ELECTION
 UNDER SUBSECTION (A) OF SECTION SIX HUNDRED SIXTY OF THIS CHAPTER.
   (A)  FOR  ANY  TAXABLE  YEAR FOR WHICH SUCH ELECTION IS IN EFFECT, THE
 PARENT CORPORATION SHALL BE SUBJECT TO TAX UNDER THIS ARTICLE AS  A  NEW
 YORK  S CORPORATION, AND THE PROVISIONS OF SUBPARAGRAPH (A) OF PARAGRAPH
 ONE OF THIS SUBSECTION SHALL APPLY.
   (B) FOR ANY TAXABLE YEAR FOR WHICH SUCH ELECTION IS NOT IN EFFECT, THE
 QSSS SHALL BE A NEW YORK C CORPORATION, AND THE ENTIRE NET INCOME OF THE
 QSSS SHALL BE DETERMINED AS IF THE FEDERAL QSSS ELECTION  HAD  NOT  BEEN
 MADE. FOR PURPOSES OF SUCH DETERMINATION, THE TAXABLE YEAR OF THE PARENT
 CORPORATION  SHALL  CONSTITUTE  THE TAXABLE YEAR OF THE QSSS, EXCLUDING,
 HOWEVER, ANY PORTION OF SUCH YEAR DURING WHICH THE QSSS IS NOT A TAXPAY-
 ER.
   (4) S CORPORATION EXCLUDED. IN THE CASE OF AN S CORPORATION  WHICH  IS
 AN  EXCLUDED  CORPORATION  AND  WHICH IS THE PARENT OF A QSSS WHICH IS A
 TAXPAYER, THE QSSS SHALL BE A NEW YORK C CORPORATION AND THE  PROVISIONS
 OF SUBPARAGRAPH (B) OF PARAGRAPH THREE OF THIS SUBSECTION SHALL APPLY.
   (5)  EXCLUDED  CORPORATION.  THE  TERM  "EXCLUDED CORPORATION" MEANS A
 CORPORATION SUBJECT TO  TAX  UNDER  SECTIONS  ONE  HUNDRED  EIGHTY-THREE
 THROUGH  ONE  HUNDRED EIGHTY-FIVE OF THIS CHAPTER, INCLUSIVE, OR ARTICLE
 NINE-A OR THIRTY-THREE OF THIS CHAPTER, OR  A  FOREIGN  CORPORATION  NOT
 TAXABLE BY THIS STATE WHICH, IF IT WERE TAXABLE, WOULD BE SUBJECT TO TAX
 UNDER ANY OF SUCH SECTIONS OR ARTICLES.
   (6)  TAXPAYER.  FOR  PURPOSES  OF  THIS PARAGRAPH, THE TERM "TAXPAYER"
 MEANS A PARENT CORPORATION OR QSSS SUBJECT TO TAX  UNDER  THIS  ARTICLE,
 DETERMINED WITHOUT REGARD TO THE PROVISIONS OF THIS PARAGRAPH.
   (7) QSSS INCLUSION ELECTION. THE ELECTION UNDER CLAUSE (I) OF SUBPARA-
 GRAPH (B) OF PARAGRAPH TWO OF THIS SUBSECTION SHALL BE EFFECTIVE FOR THE
 TAXABLE  YEAR FOR WHICH MADE AND FOR ALL SUCCEEDING TAXABLE YEARS OF THE
 CORPORATION UNTIL SUCH ELECTION IS TERMINATED.  AN  ELECTION  OR  TERMI-
 NATION SHALL BE MADE ON SUCH FORM AND IN SUCH MANNER AS THE COMMISSIONER
 MAY PRESCRIBE BY REGULATION OR INSTRUCTION.
   (P)  EMERGING  TECHNOLOGY INVESTMENT DEFERRAL. IN THE CASE OF ANY SALE
 OF A QUALIFIED EMERGING TECHNOLOGIES INVESTMENT HELD FOR MORE THAN THIR-
 TY-SIX MONTHS AND WITH RESPECT TO WHICH THE TAXPAYER ELECTS THE APPLICA-
 TION OF THIS SUBSECTION, GAIN FROM SUCH SALE SHALL BE RECOGNIZED ONLY TO
 THE EXTENT THAT THE AMOUNT REALIZED ON SUCH SALE EXCEEDS THE COST OF ANY
 QUALIFIED EMERGING TECHNOLOGIES INVESTMENT  PURCHASED  BY  THE  TAXPAYER
 DURING  THE THREE HUNDRED SIXTY-FIVE-DAY PERIOD BEGINNING ON THE DATE OF
 SUCH SALE, REDUCED BY ANY PORTION OF SUCH  COST  PREVIOUSLY  TAKEN  INTO
 ACCOUNT  UNDER  THIS  SUBSECTION.  FOR  PURPOSES  OF THIS SUBSECTION THE
 FOLLOWING SHALL APPLY:
   (1) A QUALIFIED INVESTMENT IS STOCK OF A CORPORATION OR  AN  INTEREST,
 OTHER  THAN AS A CREDITOR, IN A PARTNERSHIP OR LIMITED LIABILITY COMPANY
 THAT WAS ACQUIRED BY THE TAXPAYER AS PROVIDED IN INTERNAL REVENUE CODE §
 1202(C)(1)(B), EXCEPT THAT THE REFERENCE TO THE  TERM  "STOCK"  IN  SUCH
 SECTION  SHALL BE READ AS "INVESTMENT," OR BY THE TAXPAYER FROM A PERSON
 WHO HAD ACQUIRED SUCH STOCK OR INTEREST IN SUCH A MANNER.
   (2) A QUALIFIED EMERGING TECHNOLOGY INVESTMENT IS A QUALIFIED  INVEST-
 MENT, THAT WAS HELD BY THE TAXPAYER FOR AT LEAST THIRTY-SIX MONTHS, IN A

 S. 1680                            37
 
 COMPANY  DEFINED  IN PARAGRAPH (C) OF SUBDIVISION ONE OF SECTION THIRTY-
 ONE HUNDRED TWO-E OF THE PUBLIC AUTHORITIES LAW OR AN  INVESTMENT  IN  A
 PARTNERSHIP  OR LIMITED LIABILITY COMPANY THAT IS TAXED AS A PARTNERSHIP
 TO THE EXTENT THAT SUCH PARTNERSHIP OR LIMITED LIABILITY COMPANY INVESTS
 IN QUALIFIED EMERGING TECHNOLOGY COMPANIES.
   (3)  FOR  PURPOSES  OF  DETERMINING WHETHER THE NONRECOGNITION OF GAIN
 UNDER THIS SUBSECTION  APPLIES  TO  A  QUALIFIED  EMERGING  TECHNOLOGIES
 INVESTMENT  THAT IS SOLD, THE TAXPAYER'S HOLDING PERIOD FOR SUCH INVEST-
 MENT  AND  THE  QUALIFIED  EMERGING  TECHNOLOGIES  INVESTMENT  THAT   IS
 PURCHASED  SHALL BE DETERMINED WITHOUT REGARD TO INTERNAL REVENUE CODE §
 1223.
   (Q) AMOUNTS DEFERRED. THE AMOUNT DEFERRED UNDER SUBSECTION (P) OF THIS
 SECTION SHALL BE ADDED TO ENTIRE NET INCOME WHEN THE REINVESTMENT IN THE
 NEW YORK QUALIFIED EMERGING TECHNOLOGY COMPANY WHICH QUALIFIED A TAXPAY-
 ER FOR SUCH DEFERRAL IS SOLD.
   (R) FOR TAXABLE YEARS BEGINNING AFTER DECEMBER THIRTY-FIRST, TWO THOU-
 SAND TWO, IN THE CASE OF QUALIFIED PROPERTY DESCRIBED IN  PARAGRAPH  TWO
 OF  SUBSECTION K OF SECTION 168 OF THE INTERNAL REVENUE CODE, OTHER THAN
 QUALIFIED RESURGENCE ZONE PROPERTY DESCRIBED IN SUBSECTION (U)  OF  THIS
 SECTION,  AND  OTHER  THAN  QUALIFIED  NEW  YORK  LIBERTY  ZONE PROPERTY
 DESCRIBED IN PARAGRAPH TWO OF SUBSECTION  B  OF  SECTION  1400L  OF  THE
 INTERNAL  REVENUE CODE (WITHOUT REGARD TO CLAUSE (I) OF SUBPARAGRAPH (C)
 OF SUCH PARAGRAPH), WHICH WAS PLACED IN SERVICE ON OR AFTER JUNE  FIRST,
 TWO  THOUSAND  THREE,  A  TAXPAYER SHALL BE ALLOWED WITH RESPECT TO SUCH
 PROPERTY THE DEPRECIATION DEDUCTION ALLOWABLE UNDER SECTION 167  OF  THE
 INTERNAL REVENUE CODE AS SUCH SECTION WOULD HAVE APPLIED TO SUCH PROPER-
 TY HAD IT BEEN ACQUIRED BY THE TAXPAYER ON SEPTEMBER TENTH, TWO THOUSAND
 ONE.
   (S)  RELATED  MEMBERS  EXPENSE  ADD BACK. (1) DEFINITIONS. (A) RELATED
 MEMBER. "RELATED MEMBER" MEANS A RELATED PERSON AS DEFINED  IN  SUBPARA-
 GRAPH  (C)  OF PARAGRAPH THREE OF SUBSECTION (B) OF SECTION FOUR HUNDRED
 SIXTY-FIVE OF THE INTERNAL REVENUE CODE,  EXCEPT  THAT  "FIFTY  PERCENT"
 SHALL BE SUBSTITUTED FOR "TEN PERCENT".
   (B)  EFFECTIVE  RATE  OF TAX. "EFFECTIVE RATE OF TAX" MEANS, AS TO ANY
 STATE OR U.S. POSSESSION, THE MAXIMUM STATUTORY RATE OF TAX  IMPOSED  BY
 THE  STATE OR POSSESSION ON OR MEASURED BY A RELATED MEMBER'S NET INCOME
 MULTIPLIED BY THE APPORTIONMENT PERCENTAGE, IF ANY,  APPLICABLE  TO  THE
 RELATED MEMBER UNDER THE LAWS OF SAID JURISDICTION. FOR PURPOSES OF THIS
 DEFINITION, THE EFFECTIVE RATE OF TAX AS TO ANY STATE OR U.S. POSSESSION
 IS  ZERO  WHERE  THE  RELATED  MEMBER'S NET INCOME TAX LIABILITY IN SAID
 JURISDICTION IS REPORTED ON A COMBINED OR CONSOLIDATED RETURN  INCLUDING
 BOTH THE TAXPAYER AND THE RELATED MEMBER WHERE THE REPORTED TRANSACTIONS
 BETWEEN  THE  TAXPAYER  AND THE RELATED MEMBER ARE ELIMINATED OR OFFSET.
 ALSO, FOR PURPOSES OF THIS DEFINITION, WHEN COMPUTING THE EFFECTIVE RATE
 OF TAX FOR A JURISDICTION IN WHICH A  RELATED  MEMBER'S  NET  INCOME  IS
 ELIMINATED OR OFFSET BY A CREDIT OR SIMILAR ADJUSTMENT THAT IS DEPENDENT
 UPON  THE RELATED MEMBER EITHER MAINTAINING OR MANAGING INTANGIBLE PROP-
 ERTY OR COLLECTING INTEREST INCOME IN  THAT  JURISDICTION,  THE  MAXIMUM
 STATUTORY RATE OF TAX IMPOSED BY SAID JURISDICTION SHALL BE DECREASED TO
 REFLECT  THE STATUTORY RATE OF TAX THAT APPLIES TO THE RELATED MEMBER AS
 EFFECTIVELY REDUCED BY SUCH CREDIT OR SIMILAR ADJUSTMENT.
   (C) ROYALTY PAYMENTS. ROYALTY PAYMENTS ARE PAYMENTS DIRECTLY CONNECTED
 TO THE ACQUISITION, USE, MAINTENANCE  OR  MANAGEMENT,  OWNERSHIP,  SALE,
 EXCHANGE,  OR ANY OTHER DISPOSITION OF LICENSES, TRADEMARKS, COPYRIGHTS,
 TRADE NAMES, TRADE DRESS, SERVICE  MARKS,  MASK  WORKS,  TRADE  SECRETS,
 PATENTS  AND  ANY OTHER SIMILAR TYPES OF INTANGIBLE ASSETS AS DETERMINED

 S. 1680                            38
 
 BY  THE  COMMISSIONER,  AND  INCLUDE  AMOUNTS  ALLOWABLE   AS   INTEREST
 DEDUCTIONS UNDER SECTION ONE HUNDRED SIXTY-THREE OF THE INTERNAL REVENUE
 CODE  TO THE EXTENT SUCH AMOUNTS ARE DIRECTLY OR INDIRECTLY FOR, RELATED
 TO  OR  IN  CONNECTION WITH THE ACQUISITION, USE, MAINTENANCE OR MANAGE-
 MENT, OWNERSHIP,  SALE,  EXCHANGE  OR  DISPOSITION  OF  SUCH  INTANGIBLE
 ASSETS.
   (D)  VALID  BUSINESS  PURPOSE. A VALID BUSINESS PURPOSE IS ONE OR MORE
 BUSINESS PURPOSES, OTHER THAN THE AVOIDANCE OR  REDUCTION  OF  TAXATION,
 WHICH ALONE OR IN COMBINATION CONSTITUTE THE PRIMARY MOTIVATION FOR SOME
 BUSINESS  ACTIVITY OR TRANSACTION, WHICH ACTIVITY OR TRANSACTION CHANGES
 IN A MEANINGFUL WAY, APART FROM TAX EFFECTS, THE  ECONOMIC  POSITION  OF
 THE TAXPAYER. THE ECONOMIC POSITION OF THE TAXPAYER INCLUDES AN INCREASE
 IN  THE  MARKET SHARE OF THE TAXPAYER, OR THE ENTRY BY THE TAXPAYER INTO
 NEW BUSINESS MARKETS.
   (2) ROYALTY EXPENSE ADD BACKS. (A) EXCEPT WHERE A TAXPAYER IS INCLUDED
 IN A COMBINED RETURN WITH A RELATED MEMBER PURSUANT TO SUBSECTION (F) OF
 SECTION FOURTEEN HUNDRED SIXTY-TWO OF THIS ARTICLE, FOR THE  PURPOSE  OF
 COMPUTING  ENTIRE  NET INCOME, A TAXPAYER MUST ADD BACK ROYALTY PAYMENTS
 DIRECTLY OR INDIRECTLY PAID, ACCRUED, OR INCURRED IN CONNECTION WITH ONE
 OR MORE DIRECT OR INDIRECT TRANSACTIONS WITH ONE OR MORE RELATED MEMBERS
 DURING THE TAXABLE YEAR TO THE EXTENT DEDUCTIBLE IN CALCULATING  FEDERAL
 TAXABLE INCOME.
   (B)  EXCEPTIONS.  (I) THE ADJUSTMENT REQUIRED IN THIS SUBSECTION SHALL
 NOT APPLY TO THE PORTION OF THE ROYALTY PAYMENT THAT THE TAXPAYER ESTAB-
 LISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE TYPE  AND  IN  THE  FORM
 SPECIFIED  BY THE COMMISSIONER, MEETS ALL OF THE FOLLOWING REQUIREMENTS:
 (I) THE RELATED MEMBER WAS SUBJECT TO TAX IN THIS STATE OR ANOTHER STATE
 OR POSSESSION OF THE UNITED STATES OR A FOREIGN NATION OR SOME  COMBINA-
 TION  THEREOF  ON  A  TAX  BASE  THAT INCLUDED THE ROYALTY PAYMENT PAID,
 ACCRUED OR INCURRED BY THE TAXPAYER; (II) THE RELATED MEMBER DURING  THE
 SAME  TAXABLE YEAR DIRECTLY OR INDIRECTLY PAID, ACCRUED OR INCURRED SUCH
 PORTION TO A PERSON THAT IS NOT A RELATED MEMBER; AND (III)  THE  TRANS-
 ACTION  GIVING  RISE TO THE ROYALTY PAYMENT BETWEEN THE TAXPAYER AND THE
 RELATED MEMBER WAS UNDERTAKEN FOR A VALID BUSINESS PURPOSE.
   (II) THE ADJUSTMENT REQUIRED IN THIS SUBSECTION SHALL NOT APPLY IF THE
 TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF THE  TYPE  AND
 IN  THE FORM SPECIFIED BY THE COMMISSIONER, THAT: (I) THE RELATED MEMBER
 WAS SUBJECT TO TAX ON OR MEASURED BY ITS NET INCOME  IN  THIS  STATE  OR
 ANOTHER  STATE  OR  POSSESSION  OF THE UNITED STATES OR SOME COMBINATION
 THEREOF; (II) THE TAX BASE FOR SAID TAX  INCLUDED  THE  ROYALTY  PAYMENT
 PAID,  ACCRUED  OR  INCURRED  BY  THE  TAXPAYER; AND (III) THE AGGREGATE
 EFFECTIVE RATE OF TAX APPLIED TO THE RELATED MEMBER IN  THOSE  JURISDIC-
 TIONS  IS  NO LESS THAN EIGHTY PERCENT OF THE STATUTORY RATE OF TAX THAT
 APPLIED TO THE TAXPAYER UNDER SECTION  FOURTEEN  HUNDRED  FIFTY-FIVE  OF
 THIS ARTICLE FOR THE TAXABLE YEAR.
   (III)  THE  ADJUSTMENT  REQUIRED IN THIS SUBSECTION SHALL NOT APPLY IF
 THE TAXPAYER ESTABLISHES, BY CLEAR AND CONVINCING EVIDENCE OF  THE  TYPE
 AND  IN  THE  FORM  SPECIFIED BY THE COMMISSIONER, THAT: (I) THE ROYALTY
 PAYMENT WAS PAID, ACCRUED OR INCURRED  TO  A  RELATED  MEMBER  ORGANIZED
 UNDER  THE  LAWS  OF  A  COUNTRY  OTHER THAN THE UNITED STATES; (II) THE
 RELATED MEMBER'S INCOME FROM THE TRANSACTION WAS SUBJECT TO A COMPREHEN-
 SIVE INCOME TAX TREATY BETWEEN SUCH COUNTRY AND THE UNITED STATES; (III)
 THE RELATED MEMBER WAS SUBJECT TO TAX IN A FOREIGN NATION ON A TAX  BASE
 THAT  INCLUDED  THE  ROYALTY  PAYMENT  PAID,  ACCRUED OR INCURRED BY THE
 TAXPAYER; (IV) THE RELATED MEMBER'S  INCOME  FROM  THE  TRANSACTION  WAS
 TAXED IN SUCH COUNTRY AT AN EFFECTIVE RATE OF TAX AT LEAST EQUAL TO THAT

 S. 1680                            39
 
 IMPOSED  BY THIS STATE; AND (V) THE ROYALTY PAYMENT WAS PAID, ACCRUED OR
 INCURRED PURSUANT TO A TRANSACTION THAT WAS UNDERTAKEN FOR A VALID BUSI-
 NESS PURPOSE AND USING TERMS THAT REFLECT AN ARM'S LENGTH RELATIONSHIP.
   (IV) THE ADJUSTMENT REQUIRED IN THIS SUBSECTION SHALL NOT APPLY IF THE
 TAXPAYER AND THE COMMISSIONER AGREE IN WRITING TO THE APPLICATION OR USE
 OF ALTERNATIVE ADJUSTMENTS OR COMPUTATIONS. THE COMMISSIONER MAY, IN HIS
 OR  HER  DISCRETION,  AGREE  TO  THE  APPLICATION  OR USE OF ALTERNATIVE
 ADJUSTMENTS OR COMPUTATIONS WHEN HE OR SHE CONCLUDES THAT IN THE ABSENCE
 OF SUCH AGREEMENT THE INCOME OF  THE  TAXPAYER  WOULD  NOT  BE  PROPERLY
 REFLECTED.
   (T) FOR TAXABLE YEARS BEGINNING AFTER DECEMBER THIRTY-FIRST, TWO THOU-
 SAND  TWO,  UPON  THE DISPOSITION OF PROPERTY TO WHICH SUBSECTION (R) OF
 THIS SECTION APPLIES, THE AMOUNT OF  ANY  GAIN  OR  LOSS  INCLUDIBLE  IN
 ENTIRE NET INCOME SHALL BE ADJUSTED TO REFLECT THE INCLUSIONS AND EXCLU-
 SIONS   FROM  ENTIRE  NET  INCOME  PURSUANT  TO  PARAGRAPH  THIRTEEN  OF
 SUBSECTION (B) OF THIS SECTION ATTRIBUTABLE TO SUCH PROPERTY.
   (U) FOR PURPOSES OF SUBSECTIONS (R) AND (T) OF THIS SECTION, QUALIFIED
 RESURGENCE ZONE PROPERTY SHALL  MEAN  QUALIFIED  PROPERTY  DESCRIBED  IN
 PARAGRAPH  TWO  OF  SUBSECTION  K OF SECTION 168 OF THE INTERNAL REVENUE
 CODE SUBSTANTIALLY ALL OF THE USE OF WHICH IS IN THE RESURGENCE ZONE, AS
 DEFINED BELOW, AND IS IN THE ACTIVE CONDUCT OF A TRADE  OR  BUSINESS  BY
 THE  TAXPAYER  IN SUCH ZONE, AND THE ORIGINAL USE OF WHICH IN THE RESUR-
 GENCE ZONE COMMENCES WITH THE TAXPAYER AFTER DECEMBER THIRTY-FIRST,  TWO
 THOUSAND TWO. THE RESURGENCE ZONE SHALL MEAN THE AREA OF NEW YORK COUNTY
 BOUNDED  ON  THE  SOUTH  BY  A LINE RUNNING FROM THE INTERSECTION OF THE
 HUDSON RIVER WITH THE HOLLAND TUNNEL, AND RUNNING THENCE EAST  TO  CANAL
 STREET,  THEN RUNNING ALONG THE CENTERLINE OF CANAL STREET TO THE INTER-
 SECTION OF THE BOWERY AND CANAL STREET, RUNNING THENCE IN A SOUTHEASTER-
 LY DIRECTION DIAGONALLY ACROSS MANHATTAN BRIDGE PLAZA, TO THE  MANHATTAN
 BRIDGE  AND  THENCE  ALONG THE CENTERLINE OF THE MANHATTAN BRIDGE TO THE
 POINT WHERE THE CENTERLINE OF THE MANHATTAN BRIDGE WOULD INTERSECT  WITH
 THE  EASTERLY BANK OF THE EAST RIVER, AND BOUNDED ON THE NORTH BY A LINE
 RUNNING FROM THE INTERSECTION OF  THE  HUDSON  RIVER  WITH  THE  HOLLAND
 TUNNEL AND RUNNING THENCE NORTH ALONG WEST AVENUE TO THE INTERSECTION OF
 CLARKSON  STREET  THEN  RUNNING  EAST  ALONG  THE CENTERLINE OF CLARKSON
 STREET TO THE INTERSECTION OF  WASHINGTON  AVENUE,  THEN  RUNNING  SOUTH
 ALONG  THE  CENTERLINE  OF WASHINGTON AVENUE TO THE INTERSECTION OF WEST
 HOUSTON STREET, THEN EAST ALONG THE CENTERLINE OF WEST  HOUSTON  STREET,
 THEN  AT  THE INTERSECTION OF THE AVENUE OF THE AMERICAS CONTINUING EAST
 ALONG THE CENTERLINE OF EAST HOUSTON STREET TO THE EASTERLY BANK OF  THE
 EAST RIVER.
   (V)  DISALLOWED INVESTMENT PROCEEDS FROM A REIT OR RIC. (1)(A) AS USED
 IN THIS SUBSECTION, THE TERM "REIT" MEANS A REAL ESTATE INVESTMENT TRUST
 AS DEFINED IN SECTION EIGHT HUNDRED FIFTY-SIX OF  THE  INTERNAL  REVENUE
 CODE.
   (B)  AS  USED  IN  THIS  SUBSECTION,  THE TERM "RIC" MEANS A REGULATED
 INVESTMENT COMPANY AS DEFINED IN SECTION EIGHT HUNDRED FIFTY-ONE OF  THE
 INTERNAL REVENUE CODE.
   (C)  AS USED IN THIS SUBSECTION, THE TERM "REIT HOLDING COMPANY" MEANS
 A CORPORATION THAT (I) OWNS, DIRECTLY OR INDIRECTLY, OVER FIFTY  PERCENT
 OF  THE  CAPITAL STOCK OF A REIT, OR (II) IN CONNECTION WITH ONE OR MORE
 OTHER CORPORATIONS IN ITS AFFILIATED GROUP (AS SUCH TERM IS  DEFINED  IN
 SECTION FIFTEEN HUNDRED FOUR OF THE INTERNAL REVENUE CODE WITHOUT REGARD
 TO THE EXCLUSIONS PROVIDED FOR IN SUBSECTION (B) OF SUCH SECTION FIFTEEN
 HUNDRED FOUR), OWNS OVER FIFTY PERCENT OF THE CAPITAL STOCK OF A REIT.

 S. 1680                            40

   (D) AS USED IN THIS SUBSECTION, THE TERM "RIC HOLDING COMPANY" MEANS A
 CORPORATION THAT (I) OWNS, DIRECTLY OR INDIRECTLY, OVER FIFTY PERCENT OF
 THE CAPITAL STOCK OF A RIC, OR (II) IN CONNECTION WITH ONE OR MORE OTHER
 CORPORATIONS IN ITS AFFILIATED GROUP (AS SUCH TERM IS DEFINED IN SECTION
 FIFTEEN  HUNDRED FOUR OF THE INTERNAL REVENUE CODE WITHOUT REGARD TO THE
 EXCLUSIONS PROVIDED FOR  IN  SUBSECTION  (B)  OF  SUCH  SECTION  FIFTEEN
 HUNDRED FOUR), OWNS OVER FIFTY PERCENT OF THE CAPITAL STOCK OF A RIC.
   (2)  FOR  PURPOSES  OF COMPUTING ENTIRE NET INCOME OR OTHER APPLICABLE
 TAXABLE BASE, THERE SHALL BE  NO  DEDUCTION  FOR  DISALLOWED  INVESTMENT
 PROCEEDS AS DEFINED IN PARAGRAPHS THREE AND FOUR OF THIS SUBSECTION.
   (3)  FOR  PURPOSES OF THE DEDUCTION OF GAINS IN EXCESS OF LOSSES UNDER
 SUBPARAGRAPH (III)  OF  PARAGRAPH  ELEVEN  OF  SUBSECTION  (E)  OF  THIS
 SECTION,  DISALLOWED INVESTMENT PROCEEDS MEANS (A) GAIN OR LOSS FROM THE
 DISPOSITION OF AN OWNERSHIP INTEREST IN A REIT, (B) GAIN  OR  LOSS  FROM
 THE  DISPOSITION OF AN OWNERSHIP INTEREST IN A RIC, AND (C) GAIN OR LOSS
 FROM THE DISPOSITION OF AN OWNERSHIP INTEREST IN A REIT HOLDING  COMPANY
 OR  A RIC HOLDING COMPANY TO THE EXTENT THE GAIN OR LOSS IS ATTRIBUTABLE
 TO SUCH HOLDING COMPANY'S OWNERSHIP INTEREST IN A REIT OR A RIC.
   (4) FOR PURPOSES OF THE DEDUCTION OF DIVIDEND INCOME  FROM  SUBSIDIARY
 CAPITAL UNDER SUBPARAGRAPH (II) OF PARAGRAPH ELEVEN OF SUBSECTION (E) OF
 THIS  SECTION, DISALLOWED INVESTMENT PROCEEDS MEANS (A) DIVIDENDS FROM A
 REIT, AND (B) DIVIDENDS FROM A RIC, (C) DIVIDENDS FROM  A  REIT  HOLDING
 COMPANY OR A RIC HOLDING COMPANY TO THE EXTENT THE DIVIDENDS ARE ATTRIB-
 UTABLE TO SUCH HOLDING COMPANY'S OWNERSHIP INTEREST IN A REIT OR A RIC.
   (5) NOTWITHSTANDING PARAGRAPHS THREE AND FOUR OF THIS SUBSECTION,
   (A)  DISALLOWED  INVESTMENT  PROCEEDS  SHALL NOT INCLUDE ANY DIVIDENDS
 FROM, OR ATTRIBUTABLE TO, A REIT OR A RIC REQUIRED TO BE INCLUDED  IN  A
 COMBINED  REPORT  PURSUANT  TO SUBDIVISIONS FIVE OR SEVEN OF SECTION TWO
 HUNDRED NINE OF THIS CHAPTER TO THE EXTENT SUCH DIVIDENDS WERE  INCLUDED
 IN THE COMPUTATION OF COMBINED ENTIRE NET INCOME; AND
   (B) A BANKING CORPORATION, OR A GROUP OF BANKING CORPORATIONS PROPERLY
 INCLUDED  IN A COMBINED RETURN, WITH TAXABLE ASSETS (OR COMBINED TAXABLE
 ASSETS IN THE CASE OF A COMBINED RETURN) FOR THE TAXABLE YEAR  OF  EIGHT
 BILLION  DOLLARS  OR  LESS  SHALL  NOT  HAVE  ANY  DISALLOWED INVESTMENT
 PROCEEDS.
   § 1453-A. COMPUTATION OF ALTERNATIVE ENTIRE NET INCOME.  (A)  ALTERNA-
 TIVE ENTIRE NET INCOME MEANS ENTIRE NET INCOME AS DETERMINED PURSUANT TO
 SECTION  FOURTEEN  HUNDRED  FIFTY-THREE OF THIS ARTICLE, EXCEPT THAT THE
 DEDUCTIONS DESCRIBED IN PARAGRAPHS ELEVEN AND TWELVE OF  SUBSECTION  (E)
 OF  SECTION  FOURTEEN  HUNDRED  FIFTY-THREE OF THIS ARTICLE SHALL NOT BE
 ALLOWED.
   (B) ANY ELECTION MADE PURSUANT TO PARAGRAPH TWO OF SUBSECTION  (B)  OF
 SECTION  FOURTEEN HUNDRED FIFTY-FOUR OF THIS ARTICLE WITH RESPECT TO THE
 MODIFICATION PROVIDED FOR IN SUBSECTION (F) OF SECTION FOURTEEN  HUNDRED
 FIFTY-THREE  OF  THIS  ARTICLE  SHALL  BE  DEEMED  TO HAVE BEEN MADE FOR
 PURPOSES OF COMPUTING ALTERNATIVE ENTIRE NET INCOME.
   § 1454. ALLOCATION. (A) IN GENERAL. IF A TAXPAYER'S ENTIRE NET INCOME,
 ALTERNATIVE ENTIRE NET INCOME, OR TAXABLE ASSETS ARE DERIVED FROM  BUSI-
 NESS  CARRIED  ON  WITHIN AND WITHOUT THE STATE, THE TAXPAYER SHALL, FOR
 PURPOSES OF COMPUTING ALLOCATION PERCENTAGES, COMPUTE PAYROLL, RECEIPTS,
 AND DEPOSITS PERCENTAGES IN ACCORDANCE WITH THE FOLLOWING RULES:
   (1) THE TAXPAYER SHALL ASCERTAIN THE PERCENTAGE WHICH  EIGHTY  PERCENT
 OF  THE  TOTAL  WAGES,  SALARIES AND OTHER PERSONAL SERVICE COMPENSATION
 DURING THE TAXABLE YEAR OF EMPLOYEES WITHIN  THE  STATE,  EXCEPT  WAGES,
 SALARIES  AND  OTHER  PERSONAL SERVICE COMPENSATION OF GENERAL EXECUTIVE
 OFFICERS, BEARS TO THE TOTAL WAGES, SALARIES AND OTHER PERSONAL  SERVICE

 S. 1680                            41
 
 COMPENSATION  DURING  THE  TAXABLE  YEAR OF ALL THE TAXPAYER'S EMPLOYEES
 WITHIN AND WITHOUT THE STATE, EXCEPT WAGES, SALARIES AND OTHER  PERSONAL
 SERVICE COMPENSATION OF GENERAL EXECUTIVE OFFICERS.
   (2) (A) THE TAXPAYER SHALL ASCERTAIN THE PERCENTAGE WHICH THE RECEIPTS
 OF THE TAXPAYER ARISING DURING THE TAXABLE YEAR FROM:
   (I)  LOANS  (INCLUDING  A  TAXPAYER'S  PORTION OF A PARTICIPATION IN A
 LOAN) AND FINANCING LEASES WITHIN THE  STATE,  AND  ALL  OTHER  BUSINESS
 RECEIPTS EARNED WITHIN THE STATE, BEAR TO
   (II) THE TOTAL AMOUNT OF THE TAXPAYER'S RECEIPTS FROM LOANS (INCLUDING
 A  TAXPAYER'S PORTION OF A PARTICIPATION IN A LOAN) AND FINANCING LEASES
 AND ALL OTHER BUSINESS RECEIPTS WITHIN AND WITHOUT THE STATE.
   (B) ALL INTEREST FROM LOANS AND FINANCING LEASES IS LOCATED WHERE  THE
 GREATER  PORTION  OF  INCOME  PRODUCING  ACTIVITY RELATED TO THE LOAN OR
 FINANCING LEASE OCCURRED; PROVIDED, HOWEVER:
   (I) IN THE CASE OF A TAXPAYER DESCRIBED IN PARAGRAPH ONE, TWO,  THREE,
 FOUR,  FIVE  OR  SEVEN  OF  SUBSECTION  (A)  OF SECTION FOURTEEN HUNDRED
 FIFTY-TWO OF THIS ARTICLE, A LOAN OR FINANCING LEASE ATTRIBUTED BY  SUCH
 TAXPAYER  TO A BRANCH WITHOUT THE STATE SHALL BE PRESUMED TO BE PROPERLY
 SO ATTRIBUTED PROVIDED THAT SUCH PRESUMPTION MAY BE REBUTTED IF THE  TAX
 COMMISSION  DEMONSTRATES  THAT  THE  GREATER PORTION OF INCOME PRODUCING
 ACTIVITY RELATED TO THE LOAN OR FINANCING LEASE DID NOT  OCCUR  AT  SUCH
 BRANCH.  WHERE SUCH PRESUMPTION HAS BEEN REBUTTED, THE LOAN OR FINANCING
 LEASE SHALL BE PRESUMED TO BE WITHIN THIS STATE IF THE  TAXPAYER  HAD  A
 BRANCH  WITHIN  THIS  STATE  AT THE TIME THE LOAN OR FINANCING LEASE WAS
 MADE. THE TAXPAYER MAY REBUT SUCH PRESUMPTION BY DEMONSTRATING THAT  THE
 GREATER  PORTION  OF  INCOME  PRODUCING  ACTIVITY RELATED TO THE LOAN OR
 FINANCING LEASE DID NOT OCCUR WITHIN THE STATE. IN THE CASE OF A LOAN OR
 FINANCING LEASE WHICH IS RECORDED ON THE BOOKS OF A  PLACE  WITHOUT  THE
 STATE  WHICH  IS  NOT  A  BRANCH,  IT SHALL BE PRESUMED THAT THE GREATER
 PORTION OF INCOME PRODUCING ACTIVITY RELATED TO SUCH LOAN  OR  FINANCING
 LEASE  OCCURRED  WITHIN  THIS  STATE IF THE TAXPAYER HAD A BRANCH WITHIN
 THIS STATE AT THE TIME THE LOAN OR FINANCING LEASE WAS MADE. THE TAXPAY-
 ER MAY REBUT SUCH PRESUMPTION BY DEMONSTRATING THAT THE GREATER  PORTION
 OF  INCOME PRODUCING ACTIVITY RELATED TO THE LOAN OR FINANCING LEASE DID
 NOT OCCUR WITHIN THIS STATE.
   (II) IN THE CASE OF A TAXPAYER DESCRIBED IN PARAGRAPH SIX OR  NINE  OF
 SUBSECTION  (A) OF SECTION FOURTEEN HUNDRED FIFTY-TWO OF THIS ARTICLE, A
 LOAN OR FINANCING LEASE ATTRIBUTED BY  SUCH  TAXPAYER  TO  A  BONA  FIDE
 OFFICE  WITHOUT THE STATE SHALL BE PRESUMED TO BE PROPERLY SO ATTRIBUTED
 PROVIDED THAT SUCH PRESUMPTION MAY BE REBUTTED  IF  THE  TAX  COMMISSION
 DEMONSTRATES  THAT  THE  GREATER  PORTION  OF  INCOME PRODUCING ACTIVITY
 RELATED TO THE LOAN OR FINANCING LEASE DID NOT OCCUR WITHOUT THIS STATE.
   (C) RECEIPTS FROM  LEASE  TRANSACTIONS  OTHER  THAN  FINANCING  LEASES
 REFERRED  TO  IN SUBPARAGRAPH (B) ARE LOCATED WHERE THE PROPERTY SUBJECT
 TO THE LEASE IS LOCATED.
   (D) (I) INTEREST, AND FEES AND PENALTIES IN THE  NATURE  OF  INTEREST,
 FROM  BANK, CREDIT, TRAVEL AND ENTERTAINMENT CARD RECEIVABLES ARE EARNED
 WITHIN THE STATE IF THE MAILING  ADDRESS  OF  THE  CARD  HOLDER  IN  THE
 RECORDS OF THE TAXPAYER IS IN THE STATE;
   (II)  SERVICE  CHARGES  AND FEES FROM SUCH CARDS ARE EARNED WITHIN THE
 STATE IF THE MAILING ADDRESS OF THE CARD HOLDER IN THE  RECORDS  OF  THE
 TAXPAYER IS IN THE STATE; AND
   (III)  RECEIPTS FROM MERCHANT DISCOUNTS ARE EARNED WITHIN THE STATE IF
 THE MERCHANT IS LOCATED WITHIN THE STATE.
   (E) THE PORTION OF TOTAL NET  GAINS  AND  OTHER  INCOME  FROM  TRADING
 ACTIVITIES  (INCLUDING  BUT NOT LIMITED TO FOREIGN EXCHANGE, OPTIONS AND

 S. 1680                            42
 
 FINANCIAL FUTURES), AND FROM INVESTMENT ACTIVITIES WHICH  IS  ATTRIBUTED
 WITHIN  THE  STATE  SHALL  BE  ASCERTAINED BY MULTIPLYING SUCH TOTAL NET
 GAINS AND OTHER INCOME BY A FRACTION THE NUMERATOR OF WHICH IS THE AVER-
 AGE  VALUE  OF TRADING ASSETS AND INVESTMENT ASSETS ATTRIBUTABLE TO THIS
 STATE AND THE DENOMINATOR OF WHICH IS THE AVERAGE VALUE OF  ALL  TRADING
 AND  INVESTMENT ASSETS. A TRADING ASSET OR INVESTMENT ASSET IS ATTRIBUT-
 ABLE TO THIS STATE IF THE GREATER PORTION OF INCOME  PRODUCING  ACTIVITY
 RELATED  TO  THE  TRADING  ASSET OR INVESTMENT ASSET OCCURRED WITHIN THE
 STATE.
   (F) FEES OR CHARGES FROM THE ISSUANCE OF LETTERS OF CREDIT,  TRAVELERS
 CHECKS  AND  MONEY ORDERS ARE EARNED WITHIN THE STATE IF SUCH LETTERS OF
 CREDIT, TRAVELERS CHECKS OR MONEY ORDERS ARE ISSUED WITHIN THE STATE.
   (G) RULES FOR RECEIPTS FROM CERTAIN SERVICES TO INVESTMENT  COMPANIES.
 (1)  FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND
 ONE, THE PORTION OF RECEIPTS RECEIVED FROM AN INVESTMENT COMPANY ARISING
 FROM THE SALE OF MANAGEMENT, ADMINISTRATION OR DISTRIBUTION SERVICES  TO
 SUCH INVESTMENT COMPANY DETERMINED IN ACCORDANCE WITH CLAUSE TWO OF THIS
 SUBPARAGRAPH SHALL BE DEEMED TO ARISE FROM SERVICES PERFORMED WITHIN THE
 STATE (SUCH PORTION REFERRED TO HEREIN AS THE NEW YORK PORTION).
   (2) THE NEW YORK PORTION SHALL BE THE PRODUCT OF (I) THE TOTAL OF SUCH
 RECEIPTS FROM THE SALE OF SUCH SERVICES AND (II) A FRACTION. THE NUMERA-
 TOR  OF  THAT FRACTION IS THE SUM OF THE MONTHLY PERCENTAGES (AS DEFINED
 HEREINAFTER) DETERMINED FOR EACH MONTH OF THE INVESTMENT COMPANY'S TAXA-
 BLE YEAR FOR FEDERAL INCOME TAX PURPOSES WHICH TAXABLE YEAR ENDS  WITHIN
 THE  TAXABLE  YEAR OF THE TAXPAYER (BUT EXCLUDING ANY MONTH DURING WHICH
 THE INVESTMENT COMPANY HAD NO OUTSTANDING SHARES).  THE MONTHLY PERCENT-
 AGE FOR EACH SUCH MONTH IS DETERMINED BY  DIVIDING  (I)  THE  NUMBER  OF
 SHARES  IN THE INVESTMENT COMPANY WHICH ARE OWNED ON THE LAST DAY OF THE
 MONTH BY SHAREHOLDERS WHICH ARE DOMICILED IN THE STATE BY (II) THE TOTAL
 NUMBER OF SHARES IN THE INVESTMENT COMPANY OUTSTANDING ON THAT DATE. THE
 DENOMINATOR OF THE FRACTION IS THE NUMBER OF SUCH MONTHLY PERCENTAGES.
   (3)(I) FOR PURPOSES OF THIS SUBPARAGRAPH THE TERM "DOMICILE",  IN  THE
 CASE  OF AN INDIVIDUAL SHALL HAVE THE MEANING ASCRIBED TO IT UNDER ARTI-
 CLE TWENTY-TWO OF THIS CHAPTER; AN ESTATE OR TRUST IS DOMICILED  IN  THE
 STATE  IF IT IS A RESIDENT ESTATE OR TRUST AS DEFINED IN PARAGRAPH THREE
 OF SUBSECTION (B) OF SECTION SIX HUNDRED FIVE OF THIS CHAPTER;  A  BUSI-
 NESS ENTITY IS DOMICILED IN THE STATE IF THE LOCATION OF THE ACTUAL SEAT
 OF  MANAGEMENT OR CONTROL IS IN THE STATE. IT SHALL BE PRESUMED THAT THE
 DOMICILE OF A SHAREHOLDER, WITH RESPECT TO ANY MONTH, IS HIS, HER OR ITS
 MAILING ADDRESS ON THE RECORDS OF THE INVESTMENT COMPANY AS OF THE  LAST
 DAY OF SUCH MONTH.
   (II)  FOR PURPOSES OF THIS SUBPARAGRAPH, THE TERM "INVESTMENT COMPANY"
 SHALL MEAN A REGULATED INVESTMENT COMPANY, AS DEFINED IN SECTION 851  OF
 THE INTERNAL REVENUE CODE, AND A PARTNERSHIP TO WHICH SECTION 7704(A) OF
 THE  INTERNAL  REVENUE  CODE APPLIES (BY VIRTUE OF SECTION 7704(C)(3) OF
 SUCH CODE) AND WHICH MEETS THE REQUIREMENTS OF SECTION  851(B)  OF  SUCH
 CODE.  THE  PRECEDING  SENTENCE SHALL BE APPLIED TO THE TAXABLE YEAR FOR
 FEDERAL INCOME TAX PURPOSES OF THE BUSINESS ENTITY WHICH IS ASSERTED  TO
 CONSTITUTE  AN  INVESTMENT COMPANY WHICH ENDS WITHIN THE TAXABLE YEAR OF
 THE TAXPAYER.
   (III) FOR PURPOSES OF THIS SUBPARAGRAPH, THE TERM  "RECEIPTS  FROM  AN
 INVESTMENT  COMPANY"  INCLUDES AMOUNTS RECEIVED DIRECTLY FROM AN INVEST-
 MENT COMPANY AS WELL AS AMOUNTS RECEIVED FROM THE SHAREHOLDERS  IN  SUCH
 INVESTMENT COMPANY, IN THEIR CAPACITY AS SUCH.
   (IV) FOR PURPOSES OF THIS SUBPARAGRAPH, THE TERM "MANAGEMENT SERVICES"
 MEANS  THE  RENDERING  OF  INVESTMENT  ADVICE  TO AN INVESTMENT COMPANY,

 S. 1680                            43
 
 MAKING DETERMINATIONS AS TO WHEN SALES AND PURCHASES OF  SECURITIES  ARE
 TO  BE  MADE  ON  BEHALF  OF  AN  INVESTMENT  COMPANY, OR THE SELLING OR
 PURCHASING OF SECURITIES CONSTITUTING ASSETS OF AN  INVESTMENT  COMPANY,
 AND  RELATED  ACTIVITIES, BUT ONLY WHERE SUCH ACTIVITY OR ACTIVITIES ARE
 PERFORMED PURSUANT TO A CONTRACT WITH  THE  INVESTMENT  COMPANY  ENTERED
 INTO  PURSUANT TO SECTION 15(A) OF THE FEDERAL INVESTMENT COMPANY ACT OF
 NINETEEN HUNDRED FORTY, AS AMENDED.
   (V)  FOR  PURPOSES  OF  THIS  SUBPARAGRAPH,  THE  TERM   "DISTRIBUTION
 SERVICES" MEANS THE SERVICES OF ADVERTISING, SERVICING INVESTOR ACCOUNTS
 (INCLUDING  REDEMPTIONS),  MARKETING  SHARES  OR  SELLING  SHARES  OF AN
 INVESTMENT COMPANY, BUT, IN THE CASE OF ADVERTISING, SERVICING  INVESTOR
 ACCOUNTS  (INCLUDING  REDEMPTIONS)  OR MARKETING SHARES, ONLY WHERE SUCH
 SERVICE IS PERFORMED BY A PERSON WHO IS (OR WAS, IN THE CASE OF A CLOSED
 END COMPANY) ALSO ENGAGED IN THE SERVICE OF SELLING SUCH SHARES. IN  THE
 CASE  OF  AN  OPEN  END  COMPANY, SUCH SERVICE OF SELLING SHARES MUST BE
 PERFORMED PURSUANT TO A CONTRACT ENTERED INTO PURSUANT TO SECTION  15(B)
 OF  THE  FEDERAL  INVESTMENT  COMPANY  ACT OF NINETEEN HUNDRED FORTY, AS
 AMENDED.
   (VI) FOR PURPOSES  OF  THIS  SUBPARAGRAPH,  THE  TERM  "ADMINISTRATION
 SERVICES"  INCLUDES  CLERICAL, ACCOUNTING, BOOKKEEPING, DATA PROCESSING,
 INTERNAL AUDITING, LEGAL AND TAX SERVICES PERFORMED  FOR  AN  INVESTMENT
 COMPANY  BUT ONLY IF THE PROVIDER OF SUCH SERVICE OR SERVICES DURING THE
 TAXABLE YEAR IN WHICH SUCH SERVICE  OR  SERVICES  ARE  SOLD  ALSO  SELLS
 MANAGEMENT  OR  DISTRIBUTION  SERVICES,  AS  DEFINED IN ITEM (V) OF THIS
 CLAUSE, TO SUCH INVESTMENT COMPANY.
   (H) ALL RECEIPTS FROM THE PERFORMANCE OF  SERVICES  NOT  DESCRIBED  IN
 THIS CLAUSE ARE EARNED WITHIN THE STATE IF THE SERVICES ARE PERFORMED IN
 THE  STATE.    WHEN  A  SERVICE IS PERFORMED BOTH WITHIN AND WITHOUT THE
 STATE, THE RECEIPTS SHALL BE ALLOCATED WITHIN AND WITHOUT THE  STATE  IN
 ACCORDANCE WITH RULES AND REGULATIONS OF THE TAX COMMISSION.
   (I)  ALL OTHER RECEIPTS NOT DESCRIBED IN SUBPARAGRAPHS (B) THROUGH (H)
 OF THIS PARAGRAPH SHALL BE ATTRIBUTABLE WITHIN AND WITHOUT THE STATE  IN
 ACCORDANCE WITH RULES AND REGULATIONS ISSUED BY THE COMMISSIONER.
   (3)  THE  TAXPAYER  SHALL  ASCERTAIN  THE PERCENTAGE WHICH THE AVERAGE
 VALUE OF DEPOSITS MAINTAINED AT BRANCHES WITHIN  THE  STATE  DURING  THE
 TAXABLE  YEAR, BEARS TO THE AVERAGE VALUE OF ALL THE TAXPAYER'S DEPOSITS
 MAINTAINED AT BRANCHES WITHIN AND WITHOUT THE STATE DURING  THE  TAXABLE
 YEAR.
   (4)  EACH  PERCENTAGE  COMPUTED  PURSUANT  TO THIS SUBSECTION SHALL BE
 COMPUTED ON A CASH OR ACCRUAL BASIS ACCORDING TO THE METHOD OF  ACCOUNT-
 ING  USED  FOR  THE  TAXABLE YEAR. THE RECEIPTS PERCENTAGE SHALL INCLUDE
 ONLY RECEIPTS WHICH ARE INCLUDED IN ALTERNATIVE ENTIRE  NET  INCOME  FOR
 THE  TAXABLE  YEAR.  THE  DEPOSITS AND PAYROLL PERCENTAGES SHALL INCLUDE
 ONLY DEPOSITS AND PAYROLL THE EXPENSES OF  WHICH  ARE  INCLUDED  IN  THE
 COMPUTATION OF ALTERNATIVE ENTIRE NET INCOME FOR THE TAXABLE YEAR.
   (5) FOR PURPOSES OF THIS SECTION:
   (A)  THE TERM "BONA FIDE OFFICE" MEANS AN OFFICE AT WHICH THE TAXPAYER
 CARRIES ON ITS BUSINESS IN A REGULAR AND SYSTEMATIC MANNER AND WHICH  IS
 CONTINUOUSLY MAINTAINED, OCCUPIED AND USED BY EMPLOYEES OF THE TAXPAYER.
   (B)  THE  TERM  "BRANCH" MEANS A BONA FIDE OFFICE WHICH IS USED BY THE
 TAXPAYER ON A REGULAR AND SYSTEMATIC BASIS TO (I) APPROVE LOANS (REGARD-
 LESS OF WHETHER THE APPROVAL OF CERTAIN CLASSES OF LOANS REQUIRES REVIEW
 OR FINAL APPROVAL BY ANOTHER OFFICE OF THE TAXPAYER), (II)  ACCEPT  LOAN
 REPAYMENTS,  (III)  DISBURSE  FUNDS,  AND (IV) CONDUCT ONE OR MORE OTHER
 FUNCTIONS OF A BANKING BUSINESS.

 S. 1680                            44
 
   (6) IF IT SHALL APPEAR TO  THE  TAX  COMMISSION  THAT  THE  ALLOCATION
 PERCENTAGE  DETERMINED  IN  SUBSECTION  (B), (C), OR (D) OF THIS SECTION
 DOES NOT PROPERLY REFLECT THE ACTIVITY, BUSINESS, INCOME OR ASSETS OF  A
 TAXPAYER WITHIN THE STATE, THE TAX COMMISSION SHALL BE AUTHORIZED IN ITS
 DISCRETION  TO  ADJUST  IT  BY  (1) EXCLUDING ONE OR MORE OF THE FACTORS
 THEREIN, (2) INCLUDING ONE OR MORE OTHER FACTORS, OR (3) ANY OTHER SIMI-
 LAR OR DIFFERENT METHOD CALCULATED TO EFFECT A  FAIR  AND  PROPER  ALLO-
 CATION OF THE INCOME OR ASSETS REASONABLY ATTRIBUTABLE TO THE STATE.
   (7)  THE TAX COMMISSION FROM TIME TO TIME SHALL PUBLISH ALL RULINGS OF
 GENERAL  PUBLIC  INTEREST  WITH  RESPECT  TO  ANY  APPLICATION  OF   THE
 PROVISIONS OF PARAGRAPH SIX OF THIS SUBSECTION.
   (B) ALLOCATION OF ENTIRE NET INCOME.
   (1) IF A TAXPAYER'S ENTIRE NET INCOME IS DERIVED FROM BUSINESS CARRIED
 ON  BOTH  WITHIN  AND  WITHOUT  THE  STATE, THE PORTION THEREOF WHICH IS
 DERIVED FROM BUSINESS CARRIED ON WITHIN THE STATE SHALL BE DETERMINED BY
 MULTIPLYING ITS ENTIRE NET INCOME BY THE  INCOME  ALLOCATION  PERCENTAGE
 DETERMINED  AS FOLLOWS: ADD THE PERCENTAGES ASCERTAINED UNDER PARAGRAPHS
 ONE, TWO AND THREE OF SUBSECTION (A) OF THIS SECTION, PLUS, IN THE  CASE
 OF  A  TAXPAYER  OTHER  THAN  A  NEW  YORK  S CORPORATION, AN ADDITIONAL
 PERCENTAGE EQUAL TO THE RECEIPTS PERCENTAGE ASCERTAINED UNDER  PARAGRAPH
 TWO  OF SUCH SUBSECTION AND AN ADDITIONAL PERCENTAGE EQUAL TO THE DEPOS-
 ITS PERCENTAGE ASCERTAINED UNDER PARAGRAPH THREE OF SUCH SUBSECTION, AND
 DIVIDE THE RESULT BY THE NUMBER OF PERCENTAGES SO ADDED TOGETHER.
   (1-A)  NOTWITHSTANDING  THE  PROVISIONS  OF  PARAGRAPH  ONE  OF   THIS
 SUBSECTION,  EACH  BANKING  CORPORATION  DESCRIBED  IN PARAGRAPH NINE OF
 SUBSECTION (A) OF SECTION FOURTEEN HUNDRED  FIFTY-TWO  OF  THIS  ARTICLE
 SUBJECT  TO  THE TAX IMPOSED BY THIS ARTICLE THAT SUBSTANTIALLY PROVIDES
 MANAGEMENT, ADMINISTRATIVE OR DISTRIBUTION  SERVICES  TO  AN  INVESTMENT
 COMPANY,  AS SUCH TERMS ARE DEFINED IN SUBPARAGRAPH (G) OF PARAGRAPH TWO
 OF SUBSECTION (A) OF THIS SECTION, SHALL DETERMINE THE  PORTION  OF  ITS
 ENTIRE  NET  INCOME DERIVED FROM BUSINESS CARRIED ON WITHIN THE STATE BY
 MULTIPLYING SUCH INCOME BY AN INCOME ALLOCATION PERCENTAGE  OBTAINED  AS
 FOLLOWS:
   (A)  FOR  TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
 SAND SIX AND BEFORE THE FIRST DAY OF JANUARY,  TWO  THOUSAND  SEVEN,  BY
 ADDING THE FOLLOWING PERCENTAGES:
   (I)  THE  PRODUCT  OF  SEVENTEEN PERCENT AND THE PERCENTAGE DETERMINED
 UNDER PARAGRAPH ONE OF SUBSECTION (A) OF THIS SECTION,
   (II) THE PRODUCT OF FIFTY PERCENT AND THE PERCENTAGE DETERMINED  UNDER
 PARAGRAPH TWO OF SUBSECTION (A) OF THIS SECTION, AND
   (III)  THE  PRODUCT  OF THIRTY-THREE PERCENT AND THE PERCENTAGE DETER-
 MINED UNDER PARAGRAPH THREE OF SUBSECTION (A) OF THIS SECTION.
   (B) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST,  TWO  THOU-
 SAND  SEVEN  AND BEFORE THE FIRST DAY OF JANUARY, TWO THOUSAND EIGHT, BY
 ADDING THE FOLLOWING PERCENTAGES:
   (I) THE PRODUCT OF TEN PERCENT AND  THE  PERCENTAGE  DETERMINED  UNDER
 PARAGRAPH ONE OF SUBSECTION (A) OF THIS SECTION,
   (II)  THE  PRODUCT  OF  SEVENTY  PERCENT AND THE PERCENTAGE DETERMINED
 UNDER PARAGRAPH TWO OF SUBSECTION (A) OF THIS SECTION, AND
   (III) THE PRODUCT OF TWENTY  PERCENT  AND  THE  PERCENTAGE  DETERMINED
 UNDER PARAGRAPH THREE OF SUBSECTION (A) OF THIS SECTION.
   (C)  FOR  TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
 SAND EIGHT,  BY  THE  PERCENTAGE  ASCERTAINED  UNDER  PARAGRAPH  TWO  OF
 SUBSECTION (A) OF THIS SECTION.
   (2)  (A) IN LIEU OF THE MODIFICATION PROVIDED FOR IN SUBSECTION (F) OF
 SECTION FOURTEEN HUNDRED FIFTY-THREE OF THIS  ARTICLE,  (RELATING  TO  A

 S. 1680                            45
 
 MODIFICATION  FOR  THE  ADJUSTED ELIGIBLE NET INCOME OF AN INTERNATIONAL
 BANKING FACILITY), A TAXPAYER MAY, IN THE MANNER PRESCRIBED BY  THE  TAX
 COMMISSION,  ELECT  TO  MODIFY  ON AN ANNUAL BASIS ITS INCOME ALLOCATION
 PERCENTAGE  IN  THE  MANNER  DESCRIBED IN CLAUSES (I), (II) AND (III) OF
 THIS SUBPARAGRAPH:
   (I) WAGES, SALARIES AND OTHER PERSONAL SERVICE  COMPENSATION  PROPERLY
 ATTRIBUTABLE  TO  THE  PRODUCTION  OF  ELIGIBLE GROSS INCOME OF THE TAX-
 PAYER'S INTERNATIONAL BANKING FACILITY SHALL  NOT  BE  INCLUDED  IN  THE
 COMPUTATION  OF  WAGES, SALARIES AND OTHER PERSONAL SERVICE COMPENSATION
 OF EMPLOYEES WITHIN THE STATE,
   (II) RECEIPTS PROPERLY ATTRIBUTABLE  TO  THE  PRODUCTION  OF  ELIGIBLE
 GROSS  INCOME OF THE TAXPAYER'S INTERNATIONAL BANKING FACILITY SHALL NOT
 BE INCLUDED IN THE COMPUTATION OF RECEIPTS WITHIN THE STATE, AND
   (III) DEPOSITS FROM FOREIGN PERSONS WHICH ARE PROPERLY ATTRIBUTABLE TO
 THE PRODUCTION OF ELIGIBLE GROSS INCOME OF THE TAXPAYER'S  INTERNATIONAL
 BANKING  FACILITY  SHALL  NOT BE INCLUDED IN THE COMPUTATION OF DEPOSITS
 MAINTAINED AT BRANCHES WITHIN THE STATE.
   (B) FOR PURPOSES OF THIS PARAGRAPH, THE TERM "ELIGIBLE  GROSS  INCOME"
 REFERS  TO  SUCH  TERM  AS SET OUT IN SUBSECTION (F) OF SECTION FOURTEEN
 HUNDRED FIFTY-THREE OF  THIS  ARTICLE  EXCEPT  THAT  THE  TERM  "FOREIGN
 PERSON"  AS  DEFINED IN PARAGRAPH EIGHT OF SUCH SUBSECTION (F) SHALL NOT
 INCLUDE A FOREIGN BRANCH OF THE TAXPAYER AND IN NO  EVENT  SHALL  TRANS-
 ACTIONS  BETWEEN  THE  TAXPAYER'S INTERNATIONAL BANKING FACILITY AND ITS
 FOREIGN BRANCHES BE CONSIDERED.
   (C) ALLOCATION OF ALTERNATIVE  ENTIRE  NET  INCOME.  IF  A  TAXPAYER'S
 ALTERNATIVE  ENTIRE  NET INCOME IS DERIVED FROM BUSINESS CARRIED ON BOTH
 WITHIN AND WITHOUT THE STATE, THE PORTION THEREOF WHICH IS DERIVED  FROM
 BUSINESS  CARRIED ON WITHIN THE STATE SHALL BE DETERMINED BY MULTIPLYING
 ITS ALTERNATIVE ENTIRE NET INCOME BY THE ALTERNATIVE ENTIRE  NET  INCOME
 ALLOCATION PERCENTAGE DETERMINED AS FOLLOWS:
   (1) RECOMPUTE THE PAYROLL PERCENTAGE UNDER PARAGRAPH ONE OF SUBSECTION
 (A)  OF  THIS SECTION WITHOUT GIVING CONSIDERATION TO THE PHRASE "EIGHTY
 PERCENT OF," ADD TO THE RESULTING PERCENTAGE THE PERCENTAGES ASCERTAINED
 UNDER PARAGRAPHS TWO AND THREE OF SUCH SUBSECTION, AND DIVIDE THE RESULT
 BY THE NUMBER OF PERCENTAGES SO ADDED TOGETHER.
   (2) WHEN AN ELECTION HAS  BEEN  MADE  PURSUANT  TO  PARAGRAPH  TWO  OF
 SUBSECTION (B) OF THIS SECTION (RELATING TO INTERNATIONAL BANKING FACIL-
 ITIES) THE TAXPAYER SHALL MAKE THE MODIFICATIONS DESCRIBED IN SUCH PARA-
 GRAPH  FOR  PURPOSES  OF  ITS  ALTERNATIVE  ENTIRE NET INCOME ALLOCATION
 PERCENTAGE.
   (3) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST,  TWO  THOU-
 SAND  SIX,  EACH  BANKING  CORPORATION  DESCRIBED  IN  PARAGRAPH NINE OF
 SUBSECTION (A) OF SECTION FOURTEEN HUNDRED  FIFTY-TWO  OF  THIS  ARTICLE
 SUBJECT  TO  THE TAX IMPOSED BY THIS ARTICLE THAT SUBSTANTIALLY PROVIDES
 MANAGEMENT, ADMINISTRATIVE OR DISTRIBUTION  SERVICES  TO  AN  INVESTMENT
 COMPANY,  AS SUCH TERMS ARE DEFINED IN SUBPARAGRAPH (G) OF PARAGRAPH TWO
 OF SUBSECTION (A) OF THIS SECTION, SHALL DETERMINE THE  PORTION  OF  ITS
 ALTERNATIVE  ENTIRE  NET  INCOME DERIVED FROM BUSINESS CARRIED ON WITHIN
 THE STATE BY MULTIPLYING SUCH INCOME BY THE PERCENTAGE  ASCERTAINED  FOR
 THE  TAXABLE  YEAR  UNDER  PARAGRAPH  ONE-A  OF  SUBSECTION  (B) OF THIS
 SECTION, EXCEPT THAT IN COMPUTING SUCH PERCENTAGE (A) FOR TAXABLE  YEARS
 BEGINNING  BEFORE  JANUARY  FIRST,  TWO THOUSAND EIGHT, NO CONSIDERATION
 SHALL BE GIVEN TO THE PHRASE "EIGHTY PERCENT OF"  IN  PARAGRAPH  ONE  OF
 SUBSECTION  (A)  OF THIS SECTION, (B) FOR TAXABLE YEARS BEGINNING BEFORE
 JANUARY FIRST, TWO THOUSAND EIGHT, WHEN AN ELECTION HAS BEEN MADE PURSU-
 ANT TO PARAGRAPH TWO OF SUBSECTION (B) OF THIS SECTION (RELATING  TO  AN

 S. 1680                            46
 
 INTERNATIONAL  BANKING  FACILITY)  THE TAXPAYER SHALL MAKE THE MODIFICA-
 TIONS DESCRIBED IN SUCH PARAGRAPH, AND (C) FOR TAXABLE  YEARS  BEGINNING
 ON OR AFTER JANUARY FIRST, TWO THOUSAND EIGHT, WHEN AN ELECTION HAS BEEN
 MADE PURSUANT TO PARAGRAPH TWO OF SUBSECTION (B) OF THIS SECTION (RELAT-
 ING  TO  AN  INTERNATIONAL BANKING FACILITY) THE TAXPAYER SHALL MAKE THE
 MODIFICATIONS DESCRIBED IN CLAUSE (II) OF SUBPARAGRAPH (A) OF SUCH PARA-
 GRAPH.
   (D) ALLOCATION OF TAXABLE ASSETS. IF THE TAXPAYER'S TAXABLE ASSETS ARE
 DERIVED FROM BUSINESS CARRIED ON BOTH WITHIN AND WITHOUT THE STATE,  THE
 PORTION  THEREOF  WHICH  IS  DERIVED FROM BUSINESS CARRIED ON WITHIN THE
 STATE SHALL BE DETERMINED BY MULTIPLYING ITS TAXABLE ASSETS BY AN  ASSET
 ALLOCATION  PERCENTAGE DETERMINED IN THE SAME MANNER AS THE INCOME ALLO-
 CATION PERCENTAGE UNDER SUBSECTION (B) OF THIS SECTION, DETERMINED AS IF
 THE ELECTION PROVIDED FOR IN PARAGRAPH TWO OF SUCH SUBSECTION  HAS  BEEN
 MADE,  EXCEPT  THAT THE MODIFICATIONS DESCRIBED IN CLAUSES (I), (II) AND
 (III) OF SUBPARAGRAPH (A) OF SUCH PARAGRAPH SHALL NOT BE MADE.
   § 1455. COMPUTATION OF  TAX.  THE  TAX  IMPOSED  BY  SECTION  FOURTEEN
 HUNDRED FIFTY-ONE OF THIS ARTICLE SHALL BE, IN THE CASE OF EACH TAXPAYER
 OTHER THAN A NEW YORK S CORPORATION, THE GREATER OF THE FOLLOWING COMPU-
 TATIONS:
   (A)  BASIC  TAX.  FOR  TAXABLE  YEARS BEGINNING BEFORE JULY FIRST, TWO
 THOUSAND, NINE PERCENT OF THE  TAXPAYER'S  ENTIRE  NET  INCOME,  OR  THE
 PORTION  THEREOF  ALLOCATED TO THIS STATE, FOR THE TAXABLE YEAR, OR PART
 THEREOF. FOR TAXABLE YEARS BEGINNING AFTER JUNE THIRTIETH, TWO  THOUSAND
 AND  BEFORE  JULY FIRST, TWO THOUSAND ONE, EIGHT AND ONE-HALF PERCENT OF
 THE TAXPAYER'S ENTIRE NET INCOME, OR PORTION THEREOF ALLOCATED  TO  THIS
 STATE,  FOR  THE TAXABLE YEAR, OR PART THEREOF. FOR TAXABLE YEARS BEGIN-
 NING AFTER JUNE THIRTIETH, TWO THOUSAND ONE AND BEFORE JULY  FIRST,  TWO
 THOUSAND  TWO,  EIGHT  PERCENT  OF  THE TAXPAYER'S ENTIRE NET INCOME, OR
 PORTION THEREOF ALLOCATED TO THIS STATE, FOR THE TAXABLE YEAR,  OR  PART
 THEREOF.  FOR TAXABLE YEARS BEGINNING AFTER JUNE THIRTIETH, TWO THOUSAND
 TWO AND BEFORE JANUARY FIRST, TWO THOUSAND  SEVEN,  SEVEN  AND  ONE-HALF
 PERCENT  OF  THE  TAXPAYER'S ENTIRE NET INCOME, OR PORTION THEREOF ALLO-
 CATED TO THIS STATE, FOR THE TAXABLE YEAR, OR PART THEREOF. FOR  TAXABLE
 YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND SEVEN, SEVEN AND
 ONE-TENTH  PERCENT  OF  THE TAXPAYER'S ENTIRE NET INCOME, OR THE PORTION
 THEREOF ALLOCATED TO THIS STATE, FOR THE TAXABLE YEAR, OR PART THEREOF.
   (B) ALTERNATIVE MINIMUM TAX. IF THE TAX UNDER SUBSECTION (A)  OF  THIS
 SECTION  IS LESS THAN ANY OF THE FOLLOWING AMOUNTS, THE TAX SHALL BE THE
 LARGER OF THE FOLLOWING AMOUNTS:
   (1) (I) EXCEPT IN THE CASE OF A TAXPAYER  DESCRIBED  IN  CLAUSE  (II),
 (III),  OR  (IV) OF THIS PARAGRAPH, ONE-TENTH OF A MILL UPON EACH DOLLAR
 OF TAXABLE ASSETS, OR THE PORTION THEREOF ALLOCATED TO THIS STATE.
   (II) IN THE CASE OF A TAXPAYER WHOSE NET WORTH RATIO IS LESS THAN FIVE
 BUT GREATER THAN OR EQUAL TO FOUR PERCENT AND  WHOSE  TOTAL  ASSETS  ARE
 COMPRISED OF THIRTY-THREE PERCENT OR MORE OF MORTGAGES, ONE-TWENTY-FIFTH
 OF  A  MILL  UPON  EACH DOLLAR OF TAXABLE ASSETS, OR THE PORTION THEREOF
 ALLOCATED TO THIS STATE.
   (III) IN THE CASE OF A TAXPAYER WHOSE NET WORTH  RATIO  IS  LESS  THAN
 FOUR  PERCENT  AND  WHOSE  TOTAL  ASSETS  ARE  COMPRISED OF THIRTY-THREE
 PERCENT OR MORE OF MORTGAGES, ONE-FIFTIETH OF A MILL UPON EACH DOLLAR OF
 TAXABLE ASSETS, OR THE PORTION THEREOF ALLOCATED TO THIS STATE.
   (IV) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY  FIRST,  NINETEEN
 HUNDRED  EIGHTY-FIVE, A TAXPAYER (WHETHER OR NOT A QUALIFIED INSTITUTION
 AS DEFINED IN SUBPARAGRAPH (B) OF PARAGRAPH FIVE OF  SUBSECTION  (F)  OF
 SECTION  FOUR  HUNDRED  SIX  OF  THE  FEDERAL  NATIONAL  HOUSING ACT, AS

 S. 1680                            47
 
 AMENDED, OR AS DEFINED IN PARAGRAPH TWO OF  SUBSECTION  (I)  OF  SECTION
 THIRTEEN  OF THE FEDERAL DEPOSIT INSURANCE ACT, AS AMENDED) SHALL NOT BE
 SUBJECT TO THE PROVISIONS OF THIS PARAGRAPH  FOR  THAT  PORTION  OF  THE
 TAXABLE  YEAR  IN WHICH IT HAD OUTSTANDING NET WORTH CERTIFICATES ISSUED
 IN ACCORDANCE WITH PARAGRAPH FIVE OF  SUBSECTION  (F)  OF  SECTION  FOUR
 HUNDRED  SIX  OF THE FEDERAL NATIONAL HOUSING ACT, AS AMENDED, OR ISSUED
 IN ACCORDANCE WITH SUBSECTION (I) OF SECTION  THIRTEEN  OF  THE  FEDERAL
 DEPOSIT INSURANCE ACT, AS AMENDED.
   (V) FOR THE PURPOSES OF THIS ARTICLE:
   (A)  THE  TERM  "TAXABLE ASSETS" SHALL MEAN THE AVERAGE VALUE OF TOTAL
 ASSETS REDUCED BY ANY AMOUNT OF MONEY OR OTHER PROPERTY RECEIVED FROM OR
 ATTRIBUTABLE TO AMOUNTS RECEIVED  FROM  THE  FEDERAL  DEPOSIT  INSURANCE
 CORPORATION PURSUANT TO SUBSECTION (C) OF SECTION THIRTEEN OF THE FEDER-
 AL  DEPOSIT  INSURANCE  ACT, AS AMENDED, OR THE FEDERAL SAVINGS AND LOAN
 INSURANCE CORPORATION PURSUANT TO PARAGRAPH ONE, TWO, THREE OR  FOUR  OF
 SUBSECTION (F) OF SECTION FOUR HUNDRED SIX OF THE FEDERAL NATIONAL HOUS-
 ING  ACT,  AS  AMENDED. TOTAL ASSETS ARE THOSE ASSETS WHICH ARE PROPERLY
 REFLECTED ON A BALANCE SHEET THE INCOME OR EXPENSES OF WHICH ARE PROPER-
 LY REFLECTED (OR WOULD HAVE BEEN PROPERLY REFLECTED IF NOT FULLY  DEPRE-
 CIATED  OR  EXPENSED  OR DEPRECIATED OR EXPENSED TO A NOMINAL AMOUNT) IN
 THE COMPUTATION OF ALTERNATIVE ENTIRE NET INCOME FOR THE TAXABLE YEAR OR
 IN THE COMPUTATION OF THE ELIGIBLE NET INCOME OF THE TAXPAYER'S INTERNA-
 TIONAL BANKING FACILITY FOR THE TAXABLE YEAR.
   (B) THE TERM "NET WORTH RATIO" SHALL MEAN THE PERCENTAGE OF NET  WORTH
 TO  ASSETS  ON  THE  LAST  DAY OF THE TAXABLE YEAR. THE TERM "NET WORTH"
 MEANS THE  SUM  OF  PREFERRED  STOCK,  COMMON  STOCK,  SURPLUS,  CAPITAL
 RESERVES,  UNDIVIDED  PROFITS,  MUTUAL CAPITAL CERTIFICATES, RESERVE FOR
 CONTINGENCIES, RESERVE FOR LOAN LOSSES AND RESERVE FOR  SECURITY  LOSSES
 MINUS  ASSETS  CLASSIFIED LOSS. THE TERM "ASSETS" MEANS THE SUM OF MORT-
 GAGE LOANS, NONMORTGAGE LOANS, REPOSSESSED ASSETS, REAL ESTATE HELD  FOR
 DEVELOPMENT  OR INVESTMENT OR RESALE, CASH, DEPOSITS, INVESTMENT SECURI-
 TIES, FIXED ASSETS AND OTHER ASSETS (SUCH AS FINANCIAL FUTURES, GOODWILL
 AND OTHER INTANGIBLE ASSETS) MINUS ASSETS CLASSIFIED LOSS. IN  NO  EVENT
 SHALL ASSETS BE REDUCED BY RESERVES FOR LOSSES.
   (C)  THE  TERM  "MORTGAGES"  SHALL MEAN LOANS SECURED BY REAL PROPERTY
 WITHIN OR WITHOUT THE STATE, PARTICIPATIONS IN AND SECURITIES  COLLATER-
 ALIZED BY POOLS OF RESIDENTIAL MORTGAGES, WHETHER OR NOT ISSUED OR GUAR-
 ANTEED  BY A UNITED STATES GOVERNMENT AGENCY, AND LOANS SECURED BY STOCK
 IN A COOPERATIVE HOUSING CORPORATION. THE  PERCENTAGE  OF  TOTAL  ASSETS
 COMPRISED  OF  MORTGAGES  SHALL  BE  AN AMOUNT EQUAL TO THE RATIO OF THE
 AVERAGE OF THE FOUR QUARTERLY BALANCES OF SUCH MORTGAGES  ENDING  WITHIN
 THE  TAXABLE  YEAR, TO THE AVERAGE OF THE FOUR QUARTERLY BALANCES OF ALL
 ASSETS ENDING WITHIN THE TAXABLE YEAR. SUCH QUARTERLY BALANCES SHALL  BE
 COMPUTED  IN  THE  SAME  MANNER  AS THE REPORT OF CONDITION REQUIRED FOR
 FEDERAL DEPOSIT INSURANCE CORPORATION OR FEDERAL SAVINGS AND LOAN INSUR-
 ANCE CORPORATION PURPOSES, WHETHER OR NOT SUCH REPORT IS REQUIRED.   FOR
 TAXABLE  PERIODS  OF LESS THAN ONE YEAR, THE TAXPAYER SHALL COMPUTE SUCH
 RATIO USING THE NUMBER OF SUCH QUARTERLY  BALANCES  ENDING  WITHIN  SUCH
 TAXABLE PERIOD.
   (2)  THREE PERCENT OF THE TAXPAYER'S ALTERNATIVE ENTIRE NET INCOME, OR
 PORTION THEREOF ALLOCATED TO THIS STATE, FOR THE TAXABLE YEAR,  OR  PART
 THEREOF.
   (3) TWO HUNDRED FIFTY DOLLARS.
   (C)  NEW YORK S CORPORATIONS. (1) GENERAL. IN THE CASE OF A NEW YORK S
 CORPORATION, THE TAX IMPOSED BY SECTION FOURTEEN  HUNDRED  FIFTY-ONE  OF
 THIS  ARTICLE  SHALL  BE  THE  HIGHER  OF  (I)  THE AMOUNT PRESCRIBED IN

 S. 1680                            48
 
 SUBSECTION (A) OF THIS SECTION REDUCED BY  THE  ARTICLE  TWENTY-TWO  TAX
 EQUIVALENT   OR  (II)  THE  AMOUNT  PRESCRIBED  IN  PARAGRAPH  THREE  OF
 SUBSECTION (B) OF THIS SECTION.
   (2) THE ARTICLE TWENTY-TWO TAX EQUIVALENT IS THE AMOUNT COMPUTED UNDER
 SUBSECTION  (A) OF THIS SECTION BY SUBSTITUTING FOR THE RATE THEREIN THE
 RATE OF 7.875 PERCENT.
   (3) TERMINATION YEAR. IN THE CASE OF A TERMINATION YEAR, THE  TAX  FOR
 THE  S  SHORT  YEAR  SHALL  BE  COMPUTED  UNDER  PARAGRAPH  ONE  OF THIS
 SUBSECTION WITHOUT REGARD TO THE AMOUNT PRESCRIBED IN PARAGRAPH THREE OF
 SUBSECTION (B) OF THIS SECTION, AND THE TAX FOR THE C SHORT  YEAR  SHALL
 BE THE LARGER OF THE TAXES COMPUTED UNDER SUBSECTION (A) OF THIS SECTION
 OR  PARAGRAPH  ONE  OR  TWO OF SUBSECTION (B) OF THIS SECTION, BUT IN NO
 EVENT SHALL THE SUM OF THE TAX FOR THE S SHORT YEAR AND THE TAX FOR  THE
 C  SHORT  YEAR  BE  LESS  THAN  THE TAX PRESCRIBED IN PARAGRAPH THREE OF
 SUBSECTION (B) OF THIS SECTION.
   § 1455-A. TAX SURCHARGE. (A) IN ADDITION  TO  THE  TAX  IMPOSED  UNDER
 SECTION  FOURTEEN  HUNDRED  FIFTY-ONE  OF  THIS ARTICLE, THERE IS HEREBY
 IMPOSED, (1) FOR TAXABLE YEARS ENDING  AFTER  JUNE  THIRTIETH,  NINETEEN
 HUNDRED  EIGHTY-NINE  AND  BEFORE JULY FIRST, NINETEEN HUNDRED NINETY, A
 TAX SURCHARGE AT THE RATE OF TWO AND ONE-HALF PERCENT OF THE TAX IMPOSED
 UNDER  SECTION  FOURTEEN  HUNDRED  FIFTY-ONE  OF  THIS  ARTICLE,  BEFORE
 DEDUCTION  OF  ANY  CREDITS  AGAINST  TAX OTHERWISE ALLOWABLE UNDER THIS
 ARTICLE FOR ALL OR ANY PARTS OF SUCH  TAXABLE  YEARS,  (2)  FOR  TAXABLE
 YEARS  ENDING  AFTER  JUNE THIRTIETH, NINETEEN HUNDRED NINETY AND BEFORE
 JULY FIRST, NINETEEN HUNDRED NINETY-FOUR, AND UNTIL SUCH RATE IS  SUPER-
 SEDED, A TAX SURCHARGE AT THE RATE OF FIFTEEN PERCENT OF THE TAX IMPOSED
 UNDER   SECTION  FOURTEEN  HUNDRED  FIFTY-ONE  OF  THIS  ARTICLE,  AFTER
 DEDUCTION OF ANY CREDITS AGAINST  TAX  OTHERWISE  ALLOWABLE  UNDER  THIS
 ARTICLE,  (3)  FOR  TAXABLE  YEARS ENDING AFTER JUNE THIRTIETH, NINETEEN
 HUNDRED NINETY-FOUR AND BEFORE JULY FIRST, NINETEEN HUNDRED NINETY-FIVE,
 AND UNTIL SUCH RATE IS SUPERSEDED, A TAX SURCHARGE AT THE  RATE  OF  TEN
 PERCENT  OF  THE TAX IMPOSED UNDER SECTION FOURTEEN HUNDRED FIFTY-ONE OF
 THIS ARTICLE, AFTER DEDUCTION OF ANY CREDITS AGAINST THE  TAX  OTHERWISE
 ALLOWABLE  UNDER  THIS  ARTICLE, (4) FOR TAXABLE YEARS ENDING AFTER JUNE
 THIRTIETH, NINETEEN HUNDRED NINETY-FIVE AND BEFORE JULY FIRST,  NINETEEN
 HUNDRED  NINETY-SIX,  AND UNTIL SUCH RATE IS SUPERSEDED, A TAX SURCHARGE
 AT THE RATE OF FIVE PERCENT OF THE TAX IMPOSED  UNDER  SECTION  FOURTEEN
 HUNDRED  FIFTY-ONE  OF  THIS  ARTICLE,  AFTER  DEDUCTION  OF ANY CREDITS
 AGAINST THE TAX OTHERWISE ALLOWABLE UNDER THIS ARTICLE AND (5) FOR TAXA-
 BLE YEARS ENDING AFTER JUNE THIRTIETH, NINETEEN HUNDRED  NINETY-SIX  AND
 BEFORE JULY FIRST, NINETEEN HUNDRED NINETY-SEVEN, A TAX SURCHARGE AT THE
 RATE  OF  ZERO PERCENT OF THE TAX IMPOSED UNDER SECTION FOURTEEN HUNDRED
 FIFTY-ONE OF THIS ARTICLE, AFTER DEDUCTION OF ANY  CREDITS  AGAINST  THE
 TAX  OTHERWISE  ALLOWABLE UNDER THIS ARTICLE. HOWEVER, THE TAX SURCHARGE
 IMPOSED BY THIS SECTION AT THE RATE OF TWO AND  ONE-HALF  PERCENT  SHALL
 NOT  BE  IMPOSED  UPON ANY TAXPAYER FOR MORE THAN TWELVE MONTHS, THE TAX
 SURCHARGE IMPOSED BY THIS SECTION AT THE RATE OF FIFTEEN  PERCENT  SHALL
 NOT  BE  IMPOSED UPON ANY TAXPAYER FOR MORE THAN FORTY-EIGHT MONTHS, AND
 THE TAX SURCHARGES IMPOSED BY THIS SECTION AT THE RATES OF TEN  PERCENT,
 FIVE  PERCENT  AND ZERO PERCENT SHALL NOT, RESPECTIVELY, BE IMPOSED UPON
 ANY TAXPAYER FOR MORE THAN TWELVE MONTHS,  AND  THE  COMMISSIONER  SHALL
 PRESCRIBE  BY  REGULATION OR INSTRUCTIONS A METHOD OF PRORATION DESIGNED
 TO EFFECTUATE SUCH RESULT. THE CREDITS AGAINST TAX  OTHERWISE  ALLOWABLE
 UNDER  SECTION  FOURTEEN  HUNDRED FIFTY-SIX OF THIS ARTICLE SHALL NOT BE
 ALLOWED AS A CREDIT AGAINST THE TAX SURCHARGE IMPOSED BY THIS SECTION.

 S. 1680                            49

   (B) (1) THE  PROVISIONS  CONCERNING  RETURNS  UNDER  SECTION  FOURTEEN
 HUNDRED  SIXTY-TWO  OF THIS ARTICLE SHALL BE APPLICABLE TO THIS SECTION,
 EXCEPT THAT FOR PURPOSES OF AN AUTOMATIC EXTENSION FOR  SIX  MONTHS  FOR
 FILING  A  RETURN COVERING THE TAXES IMPOSED BY THIS ARTICLE, SUCH AUTO-
 MATIC  EXTENSION  SHALL  BE  ALLOWED, FOR TAXABLE YEARS TO WHICH THE TAX
 SURCHARGE IMPOSED BY THIS SECTION APPLY, ONLY IF A TAXPAYER  FILES  WITH
 THE  COMMISSIONER  AN  APPLICATION  FOR  EXTENSION  IN  SUCH FORM AS THE
 COMMISSIONER MAY PRESCRIBE AND PAYS ON OR BEFORE THE DATE OF SUCH FILING
 IN ADDITION TO ANY OTHER AMOUNTS REQUIRED UNDER THIS  ARTICLE,  TWO  AND
 ONE-HALF  PERCENT,  FIFTEEN  PERCENT,  TEN PERCENT, FIVE PERCENT OR ZERO
 PERCENT, WHICHEVER IS THE RATE APPLICABLE TO THE TAXABLE  YEAR  PURSUANT
 TO  SUBSECTION  (A) OF THIS SECTION, OF THE AMOUNT PROPERLY ESTIMATED AS
 PROVIDED IN SUBSECTION (B) OF SECTION FOURTEEN  HUNDRED  SIXTY-THREE  OF
 THIS ARTICLE AS ITS TAX PAYABLE UNDER SECTION FOURTEEN HUNDRED FIFTY-ONE
 OF  THIS  ARTICLE, BEFORE DEDUCTION OF ANY CREDITS AGAINST TAX OTHERWISE
 ALLOWABLE UNDER SECTION FOURTEEN HUNDRED FIFTY-SIX OF  THIS  ARTICLE  IN
 THE  CASE  OF  THE TAX SURCHARGE IMPOSED AT THE RATE OF TWO AND ONE-HALF
 PERCENT, AND AFTER DEDUCTION OF ANY CREDITS AGAINST TAX OTHERWISE ALLOW-
 ABLE UNDER SECTION FOURTEEN HUNDRED FIFTY-SIX OF  THIS  ARTICLE  IN  THE
 CASE  OF  THE TAX SURCHARGE IMPOSED AT THE RATE OF FIFTEEN, TEN, FIVE OR
 ZERO PERCENT.  THE TAX SURCHARGE IMPOSED BY THIS SECTION SHALL BE  PAYA-
 BLE TO THE COMMISSIONER IN FULL AT THE TIME THE RETURN IS REQUIRED TO BE
 FILED.
   (2)  EXCEPT  AS  OTHERWISE  PROVIDED  IN  THIS  SECTION,  ALL  OF  THE
 PROVISIONS OF THIS ARTICLE, EXCEPT FOR SECTION FOURTEEN  HUNDRED  FIFTY-
 FIVE-B  OF  THIS ARTICLE, PRESENTLY APPLICABLE ARE APPLICABLE TO THE TAX
 SURCHARGE IMPOSED BY THIS SECTION WITH  SUCH  MODIFICATIONS  AS  MAY  BE
 NECESSARY  TO  ADAPT  SUCH LANGUAGE TO THE TAX SURCHARGE IMPOSED BY THIS
 SECTION. SUCH PROVISIONS SHALL APPLY WITH THE SAME FORCE AND  EFFECT  AS
 IF THOSE PROVISIONS HAD BEEN SET FORTH IN FULL IN THIS SECTION EXCEPT TO
 THE EXTENT THAT ANY PROVISION IS EITHER INCONSISTENT WITH A PROVISION OF
 THIS  SECTION  OR  NOT  RELEVANT  TO  THE  TAX SURCHARGE IMPOSED BY THIS
 SECTION AND TO THAT END A REFERENCE IN THIS ARTICLE TO THE  TAX  IMPOSED
 BY SECTION FOURTEEN HUNDRED FIFTY-ONE OF THIS ARTICLE SHALL BE READ AS A
 REFERENCE  TO  THE TAX SURCHARGE IMPOSED BY THIS SECTION, AND TO THE SUM
 OF SUCH TAX AND SUCH TAX SURCHARGE IN  THE  CASE  OF  SECTIONS  FOURTEEN
 HUNDRED  SIXTY  AND  FOURTEEN HUNDRED SIXTY-ONE OF THIS ARTICLE AND SUCH
 OTHER PROVISIONS REQUIRING SUCH  READING  IN  ORDER  TO  EFFECTUATE  THE
 PURPOSES  OF  THIS  PROVISION,  UNLESS  A  DIFFERENT  MEANING IS CLEARLY
 REQUIRED.
   (C) COORDINATION WITH SECTION FOURTEEN HUNDRED  FIFTY-FIVE-B  OF  THIS
 ARTICLE.  THE  AMOUNT  OF TAX SURCHARGE IMPOSED PURSUANT TO THIS SECTION
 SHALL NOT BE INCLUDED IN ANY CALCULATION  OF  A  TAX  SURCHARGE  IMPOSED
 PURSUANT TO SECTION FOURTEEN HUNDRED FIFTY-FIVE-B OF THIS ARTICLE.
   (D)  INSOFAR  AS  SUBSECTION (A) OF THIS SECTION ESTABLISHES A RATE OF
 FIFTEEN PERCENT IN THE CASE OF TAXABLE YEARS ENDING AFTER  JUNE  THIRTI-
 ETH,  NINETEEN  HUNDRED  NINETY  AND BEFORE JULY FIRST, NINETEEN HUNDRED
 NINETY-FOUR AND UNTIL SUCH RATE IS SUPERSEDED, A RATE OF TEN PERCENT  IN
 THE  CASE OF TAXABLE YEARS ENDING AFTER JUNE THIRTIETH, NINETEEN HUNDRED
 NINETY-FOUR AND BEFORE JULY  FIRST,  NINETEEN  HUNDRED  NINETY-FIVE  AND
 UNTIL  SUCH  RATE  IS  SUPERSEDED, A RATE OF FIVE PERCENT IN THE CASE OF
 TAXABLE YEARS ENDING AFTER JUNE THIRTIETH, NINETEEN HUNDRED  NINETY-FIVE
 AND  BEFORE  JULY FIRST, NINETEEN HUNDRED NINETY-SIX AND UNTIL SUCH RATE
 IS SUPERSEDED, AND A RATE OF ZERO PERCENT IN THE CASE OF  TAXABLE  YEARS
 ENDING AFTER JUNE THIRTIETH, NINETEEN HUNDRED NINETY-SIX AND BEFORE JULY
 FIRST,  NINETEEN  HUNDRED NINETY-SEVEN, THE TRANSITION FROM SUCH RATE OF

 S. 1680                            50
 
 FIFTEEN PERCENT TO SUCH RATE OF TEN  PERCENT,  FROM  SUCH  RATE  OF  TEN
 PERCENT TO SUCH RATE OF FIVE PERCENT, AND FROM SUCH RATE OF FIVE PERCENT
 TO SUCH RATE OF ZERO PERCENT, SHALL BE DEEMED TO OCCUR, RESPECTIVELY, ON
 THE  FIRST  DAY OF THE SEVENTH MONTH OF EACH OF SUCH TAXABLE YEARS, WITH
 THE RESULT THAT FOR PURPOSES OF IMPLEMENTATION OF SUCH CHANGES IN RATES,
 AND NOTWITHSTANDING SUCH SUBSECTION (A), THERE IS  HEREBY  IMPOSED  WITH
 RESPECT  TO  ALL  TAXABLE  YEARS  ENDING  AFTER JUNE THIRTIETH, NINETEEN
 HUNDRED NINETY-FOUR AND BEFORE JULY FIRST, NINETEEN HUNDRED NINETY-FIVE,
 INCLUDING TAXABLE YEARS OF FEWER THAN TWELVE MONTHS, A TAX SURCHARGE  AT
 THE  RATE  OF  TWELVE AND ONE-HALF PERCENT; THERE IS HEREBY IMPOSED WITH
 RESPECT TO ALL TAXABLE  YEARS  ENDING  AFTER  JUNE  THIRTIETH,  NINETEEN
 HUNDRED  NINETY-FIVE AND BEFORE JULY FIRST, NINETEEN HUNDRED NINETY-SIX,
 INCLUDING TAXABLE YEARS OF FEWER THAN TWELVE MONTHS, A TAX SURCHARGE  AT
 THE RATE OF SEVEN AND ONE-HALF PERCENT; AND THERE IS HEREBY IMPOSED WITH
 RESPECT  TO  ALL  TAXABLE  YEARS  ENDING  AFTER JUNE THIRTIETH, NINETEEN
 HUNDRED NINETY-SIX AND BEFORE JULY FIRST, NINETEEN HUNDRED NINETY-SEVEN,
 INCLUDING TAXABLE YEARS OF FEWER THAN TWELVE MONTHS, A TAX SURCHARGE  AT
 THE  RATE  OF  TWO  AND  ONE-HALF  PERCENT. IN ADDITION, FOR PURPOSES OF
 IMPLEMENTATION OF ALL THE PROVISIONS OF THIS SECTION REFERENCES  TO  TEN
 PERCENT  SHALL  BE  READ  AS  REFERENCES TO TWELVE AND ONE-HALF PERCENT,
 REFERENCES TO FIVE PERCENT SHALL BE READ  AS  REFERENCES  TO  SEVEN  AND
 ONE-HALF  PERCENT AND REFERENCES TO ZERO PERCENT SHALL BE READ AS REFER-
 ENCES TO TWO AND ONE-HALF PERCENT.
   § 1455-B. TEMPORARY METROPOLITAN TRANSPORTATION BUSINESS TAX SURCHARGE
 ON BANKS. (A) FOR THE PRIVILEGE OF EXERCISING  ITS  FRANCHISE  OR  DOING
 BUSINESS  IN  THE  METROPOLITAN  COMMUTER  TRANSPORTATION  DISTRICT IN A
 CORPORATE OR ORGANIZED  CAPACITY,  THERE  IS  HEREBY  IMPOSED  ON  EVERY
 TAXPAYER  SUBJECT  TO  TAX  UNDER  THIS ARTICLE, OTHER THAN A NEW YORK S
 CORPORATION, FOR THE TAXABLE YEARS COMMENCING ON OR AFTER JANUARY FIRST,
 NINETEEN HUNDRED EIGHTY-TWO BUT ENDING BEFORE DECEMBER THIRTY-FIRST, TWO
 THOUSAND NINETEEN, A TAX SURCHARGE, IN ADDITION TO THE TAX IMPOSED UNDER
 SECTION FOURTEEN HUNDRED FIFTY-ONE OF THIS ARTICLE, AT THE RATE OF EIGH-
 TEEN PERCENT OF THE TAX IMPOSED  UNDER  SUCH  SECTION  FOURTEEN  HUNDRED
 FIFTY-ONE  OF  THIS  ARTICLE, FOR SUCH TAXABLE YEARS OR ANY PART OF SUCH
 TAXABLE YEARS ENDING  BEFORE  DECEMBER  THIRTY-FIRST,  NINETEEN  HUNDRED
 EIGHTY-THREE  AFTER  THE  DEDUCTION  OF  ANY CREDITS OTHERWISE ALLOWABLE
 UNDER THIS ARTICLE, AND AT THE RATE OF  SEVENTEEN  PERCENT  OF  THE  TAX
 IMPOSED  UNDER  SUCH  SECTION FOR SUCH TAXABLE YEARS OR ANY PART OF SUCH
 TAXABLE YEARS ENDING ON OR AFTER DECEMBER THIRTY-FIRST, NINETEEN HUNDRED
 EIGHTY-THREE AFTER THE DEDUCTION  OF  ANY  CREDITS  OTHERWISE  ALLOWABLE
 UNDER  THIS  ARTICLE; PROVIDED HOWEVER, THAT SUCH RATES OF TAX SURCHARGE
 SHALL BE APPLIED ONLY TO THAT PORTION OF THE TAX IMPOSED  UNDER  SECTION
 FOURTEEN  HUNDRED  FIFTY-ONE  OF THIS ARTICLE AFTER THE DEDUCTION OF ANY
 CREDITS OTHERWISE ALLOWABLE UNDER THIS ARTICLE WHICH IS ATTRIBUTABLE  TO
 THE  TAXPAYER'S  BUSINESS  ACTIVITY  CARRIED  ON WITHIN THE METROPOLITAN
 COMMUTER TRANSPORTATION DISTRICT; AND PROVIDED, FURTHER,  THAT  THE  TAX
 SURCHARGE IMPOSED BY THIS SECTION SHALL NOT BE IMPOSED UPON ANY TAXPAYER
 FOR MORE THAN FOUR HUNDRED THIRTY-TWO MONTHS. PROVIDED HOWEVER, THAT FOR
 TAXABLE  YEARS  COMMENCING  ON  OR  AFTER JULY FIRST, TWO THOUSAND, SUCH
 SURCHARGE SHALL BE CALCULATED AS IF THE RATE OF THE BASIC  TAX  COMPUTED
 UNDER  SUBSECTION  (A)  OF  SECTION  FOURTEEN HUNDRED FIFTY-FIVE OF THIS
 ARTICLE WAS NINE PERCENT.
   (B) IF THE TAX IMPOSED UNDER SECTION  FOURTEEN  HUNDRED  FIFTY-ONE  OF
 THIS  ARTICLE  IS  DERIVED FROM BUSINESS ACTIVITY CARRIED ON BOTH WITHIN
 AND WITHOUT  THE  METROPOLITAN  COMMUTER  TRANSPORTATION  DISTRICT,  THE
 PORTION  OF  THE TAX ATTRIBUTABLE TO BUSINESS ACTIVITY CARRIED ON IN THE

 S. 1680                            51
 
 METROPOLITAN COMMUTER TRANSPORTATION DISTRICT  SHALL  BE  DETERMINED  IN
 ACCORDANCE WITH RULES AND REGULATIONS PROMULGATED BY THE TAX COMMISSION.
   (C)  THE  PROVISIONS CONCERNING RETURNS UNDER SECTION FOURTEEN HUNDRED
 SIXTY-TWO OF THIS ARTICLE SHALL BE APPLICABLE TO  THIS  SECTION,  EXCEPT
 THAT  FOR PURPOSES OF AN AUTOMATIC EXTENSION FOR SIX MONTHS FOR FILING A
 RETURN COVERING THE TAX SURCHARGE IMPOSED BY THIS SECTION, SUCH AUTOMAT-
 IC EXTENSION SHALL BE ALLOWED ONLY IF A TAXPAYER FILES WITH THE  COMMIS-
 SIONER  AN  APPLICATION  FOR EXTENSION IN SUCH FORM AS SAID COMMISSIONER
 MAY PRESCRIBE BY REGULATION AND PAYS ON  OR  BEFORE  THE  DATE  OF  SUCH
 FILING  IN  ADDITION  TO  ANY OTHER AMOUNTS REQUIRED UNDER THIS ARTICLE,
 EITHER NINETY PERCENT OF THE ENTIRE TAX SURCHARGE REQUIRED  TO  BE  PAID
 UNDER  THIS  SECTION FOR THE APPLICABLE PERIOD, OR NOT LESS THAN THE TAX
 SURCHARGE SHOWN ON THE TAXPAYER'S RETURN FOR THE PRECEDING TAXABLE YEAR,
 IF SUCH PRECEDING TAXABLE YEAR WAS A TAXABLE YEAR OF TWELVE MONTHS.  THE
 TAX  SURCHARGE  IMPOSED  BY THIS SECTION SHALL BE PAYABLE TO THE COMMIS-
 SIONER IN FULL AT THE TIME THE RETURN IS REQUIRED TO BE FILED, AND  SUCH
 TAX  SURCHARGE  OR  THE  BALANCE  THEREOF, IMPOSED ON ANY TAXPAYER WHICH
 CEASES TO EXERCISE ITS FRANCHISE OR BE  SUBJECT  TO  THE  TAX  SURCHARGE
 IMPOSED BY THIS SECTION SHALL BE PAYABLE TO THE COMMISSIONER AT THE TIME
 THE  RETURN  IS  REQUIRED  TO BE FILED, PROVIDED SUCH TAX SURCHARGE OF A
 DOMESTIC CORPORATION WHICH CONTINUES TO POSSESS ITS FRANCHISE  SHALL  BE
 SUBJECT  TO  ADJUSTMENT  AS THE CIRCUMSTANCES MAY REQUIRE; ALL OTHER TAX
 SURCHARGES OF  ANY  SUCH  TAXPAYER,  WHICH  PURSUANT  TO  THE  FOREGOING
 PROVISIONS  OF THIS SECTION WOULD OTHERWISE BE PAYABLE SUBSEQUENT TO THE
 TIME SUCH RETURN IS REQUIRED TO BE FILED, SHALL NEVERTHELESS BE  PAYABLE
 AT SUCH TIME. ALL OF THE PROVISIONS OF THIS ARTICLE PRESENTLY APPLICABLE
 ARE APPLICABLE TO THE TAX SURCHARGE IMPOSED BY THIS SECTION.
   (D) NOTWITHSTANDING ANY CONTRARY PROVISIONS OF STATE OR LOCAL LAW, THE
 TAX  SURCHARGE  IMPOSED  UNDER  THIS  SECTION  SHALL NOT BE ALLOWED AS A
 DEDUCTION IN THE COMPUTATION OF ANY STATE OR  LOCAL  TAX  IMPOSED  UNDER
 THIS  CHAPTER  OR  ANY  CHAPTER  OR  LOCAL LAW. FURTHERMORE, THE CREDITS
 OTHERWISE ALLOWABLE UNDER THIS ARTICLE SHALL NOT BE ALLOWED AGAINST  THE
 TAX SURCHARGE IMPOSED BY THIS SECTION.
   (E)  THE TERM METROPOLITAN COMMUTER TRANSPORTATION DISTRICT AS USED IN
 THIS SECTION SHALL BE DEFINED PURSUANT TO SECTION TWELVE HUNDRED  SIXTY-
 TWO OF THE PUBLIC AUTHORITIES LAW.
   §  1456.  CREDITS.  (A) CREDIT FOR SERVICING CERTAIN MORTGAGES.  EVERY
 BANK, AS DEFINED IN SECTION TWO THOUSAND FOUR HUNDRED TWO OF THE  PUBLIC
 AUTHORITIES LAW, WHICH SHALL HAVE ENTERED INTO A CONTRACT WITH THE STATE
 OF NEW YORK MORTGAGE AGENCY TO SERVICE MORTGAGES ACQUIRED BY SUCH AGENCY
 PURSUANT  TO THE STATE OF NEW YORK MORTGAGE AGENCY ACT, SHALL HAVE CRED-
 ITED TO IT ANNUALLY TO APPLY UPON OR IN LIEU OF THE PAYMENT OF  ANY  TAX
 TO WHICH IT MAY BE SUBJECT UNDER THIS ARTICLE AN AMOUNT EQUAL TO TWO AND
 NINETY-THREE  ONE HUNDREDTHS PERCENTUM OF THE TOTAL PRINCIPAL AND INTER-
 EST COLLECTED BY THE BANK DURING ITS TAXABLE YEAR ON EACH SUCH  MORTGAGE
 SECURED BY A LIEN ON REAL ESTATE IMPROVED BY A ONE-FAMILY TO FOUR-FAMILY
 RESIDENTIAL  STRUCTURE  AND AN AMOUNT EQUAL TO THE INTEREST COLLECTED BY
 THE BANK DURING ITS TAXABLE YEAR ON EACH SUCH MORTGAGE SECURED BY A LIEN
 ON REAL PROPERTY IMPROVED BY A STRUCTURE OCCUPIED AS  THE  RESIDENCE  OF
 FIVE  OR MORE FAMILIES LIVING INDEPENDENTLY OF EACH OTHER, MULTIPLIED BY
 A FRACTION THE DENOMINATOR OF WHICH SHALL BE THE INTEREST  RATE  PAYABLE
 ON  THE  MORTGAGE (COMPUTED TO FIVE DECIMAL PLACES) AND THE NUMERATOR OF
 WHICH SHALL BE .00125 IN THE CASE OF SUCH A MORTGAGE  ACQUIRED  BY  SUCH
 AGENCY FOR LESS THAN ONE MILLION DOLLARS, AND .00100 IN THE CASE OF SUCH
 A  MORTGAGE  ACQUIRED  BY  SUCH  AGENCY FOR ONE MILLION DOLLARS OR MORE;
 PROVIDED, HOWEVER, THAT THERE SHALL IN NO CASE BE CREDITED TO  ANY  SUCH

 S. 1680                            52
 
 BANK  AN  AMOUNT  IN  EXCESS  OF THE AMOUNT DUE FROM SUCH BANK FOR TAXES
 PAYABLE TO THE STATE UNDER THIS ARTICLE FOR THE TAXABLE YEAR  FOR  WHICH
 SUCH  CREDIT IS GIVEN. IN COMPUTING SUCH TAX CREDIT FOR THE SERVICING OF
 MORTGAGES  ON ONE-FAMILY TO FOUR-FAMILY RESIDENTIAL STRUCTURES, THE BANK
 SHALL BE ENTITLED TO NO CREDIT FOR THE  COLLECTION  OF  CURTAILMENTS  OR
 PAYMENTS  IN  DISCHARGE  OF  ANY SUCH MORTGAGE. FOR THE PURPOSES OF THIS
 SECTION, (1) A "CURTAILMENT" SHALL MEAN AMOUNTS PAID BY  MORTGAGORS  (I)
 IN EXCESS OF THE MONTHLY CONSTANT DUE DURING THE MONTH OF COLLECTION AND
 (II)  IN  REDUCTION  OF THE UNPAID PRINCIPAL BALANCE OF THE MORTGAGE; IN
 THE ABSENCE OF CLEAR EVIDENCE TO THE CONTRARY, AMOUNTS PAID IN EXCESS OF
 THE MONTHLY CONSTANT DUE DURING THE MONTH OF COLLECTION SHALL BE  DEEMED
 TO  BE IN REDUCTION OF THE UNPAID PRINCIPAL BALANCE OF THE MORTGAGE; AND
 (2) "MONTHLY CONSTANT" SHALL MEAN THE AMOUNT OF PRINCIPAL  AND  INTEREST
 WHICH  IS  DUE  AND  PAYABLE ACCORDING TO THE MORTGAGE DOCUMENTS ON EACH
 PERIODIC PAYMENT DATE.
   (B) ELIGIBLE BUSINESS FACILITY CREDIT.
   (1) ON OR AFTER APRIL FIRST, NINETEEN HUNDRED EIGHTY-THREE, FOR  TAXA-
 BLE YEARS BEGINNING BEFORE JANUARY FIRST, TWO THOUSAND, A CREDIT AGAINST
 THE  TAX  IMPOSED  BY  THIS  ARTICLE SHALL BE ALLOWED ONLY TO A TAXPAYER
 OWNING OR OPERATING AN ELIGIBLE BUSINESS FACILITY, WHERE  SUCH  TAXPAYER
 HAS  RECEIVED A CERTIFICATE OF ELIGIBILITY FOR TAX CREDITS, OR A RENEWAL
 OR EXTENSION THEREOF, FOR SUCH FACILITY FROM  THE  NEW  YORK  STATE  JOB
 INCENTIVE  BOARD PRIOR TO APRIL FIRST, NINETEEN HUNDRED EIGHTY-THREE, OR
 HAS RECEIVED A CERTIFICATE OF ELIGIBILITY FOR TAX CREDITS, OR A  RENEWAL
 OR  EXTENSION  THEREOF,  FOR SUCH FACILITY FROM THE STATE TAX COMMISSION
 SUBSEQUENT TO SUCH DATE PURSUANT TO PARAGRAPH EIGHT OF THIS  SUBSECTION,
 AND  ONLY  WITH  RESPECT TO SUCH FACILITY, TO BE COMPUTED AS HEREINAFTER
 PROVIDED.
   (2) THE AMOUNT OF THE CREDIT ALLOWABLE IN ANY TAXABLE  YEAR  SHALL  BE
 THE  SUM DETERMINED BY MULTIPLYING THE TAX OTHERWISE DUE BY A PERCENTAGE
 TO BE DETERMINED BY:
   (A) ASCERTAINING THE PERCENTAGE WHICH THE TOTAL OF  ELIGIBLE  PROPERTY
 VALUES  DURING THE PERIOD COVERED BY ITS RETURN, AS DEFINED IN PARAGRAPH
 FOUR OF THIS SUBSECTION, BEARS TO THE AVERAGE VALUE OF ALL  THE  TAXPAY-
 ER'S REAL AND TANGIBLE PERSONAL PROPERTY EXCEPT FOR INVENTORY WITHIN THE
 STATE  DURING  SUCH  PERIOD. FOR THE PURPOSES OF THIS SUBPARAGRAPH ONLY,
 THE TAXPAYER'S REAL AND TANGIBLE PERSONAL  PROPERTY  SHALL  INCLUDE  NOT
 ONLY SUCH PROPERTY OWNED BY THE TAXPAYER BUT ALSO PROPERTY RENTED TO IT,
 AND  THE  VALUE OF RENTED PROPERTY SHALL BE DEEMED TO BE EIGHT TIMES THE
 NET ANNUAL RENTAL RATE, THAT IS, THE ANNUAL  RENTAL  RATE  PAID  BY  THE
 TAXPAYER  LESS  ANY  ANNUAL  RENTAL  RATE  RECEIVED BY THE TAXPAYER FROM
 SUBRENTALS;
   (B) ASCERTAINING THE PERCENTAGE WHICH THE TOTAL  WAGES,  SALARIES  AND
 OTHER  PERSONAL  SERVICE  COMPENSATION DURING SUCH PERIOD, OF EMPLOYEES,
 EXCEPT GENERAL EXECUTIVE OFFICERS AND THAT PORTION OF EMPLOYEE'S  WAGES,
 SALARIES  AND OTHER PERSONAL SERVICE COMPENSATION ATTRIBUTABLE, DIRECTLY
 OR INDIRECTLY, TO THE PRODUCTION OF ADJUSTED ELIGIBLE NET  INCOME  WHICH
 IS  ALLOWED  AS  A  DEDUCTION  FROM  ENTIRE  NET  INCOME AS SET FORTH IN
 SUBSECTION (F) OF SECTION FOURTEEN HUNDRED FIFTY-THREE OF THIS  ARTICLE,
 SERVING  IN  JOBS  CREATED  OR RETAINED IN AN ELIGIBLE AREA (AS THE TERM
 "ELIGIBLE AREA" WAS DEFINED  BY  SECTION  ONE  HUNDRED  FIFTEEN  OF  THE
 COMMERCE  LAW  AS  IT  EXISTED  ON  MARCH THIRTY-FIRST, NINETEEN HUNDRED
 EIGHTY-THREE) BY SUCH BUSINESS FACILITY, BEARS TO THE TOTAL WAGES, SALA-
 RIES AND OTHER PERSONAL SERVICE COMPENSATION, DURING SUCH PERIOD, OF ALL
 THE TAXPAYER'S EMPLOYEES WITHIN  THE  STATE,  EXCEPT  GENERAL  EXECUTIVE
 OFFICERS; AND

 S. 1680                            53

   (C)  ADDING  TOGETHER  THE  PERCENTAGES SO DETERMINED AND DIVIDING THE
 RESULT BY TWO; PROVIDED, HOWEVER, THAT IF NO WAGES,  SALARIES  OR  OTHER
 PERSONAL  SERVICE  COMPENSATION  WERE  PAID  OR INCURRED BY THE TAXPAYER
 DURING SUCH PERIOD TO EMPLOYEES WITHIN  THE  STATE  OTHER  THAN  GENERAL
 EXECUTIVE  OFFICERS,  SUBPARAGRAPH (B) OF THIS PARAGRAPH SHALL BE DISRE-
 GARDED AND THE AMOUNT OF CREDIT ALLOWABLE SHALL BE DETERMINED BY  MULTI-
 PLYING THE TAX OTHERWISE DUE BY THE PERCENTAGE SPECIFIED IN SUBPARAGRAPH
 (A) OF THIS PARAGRAPH.
   (3) IN NO EVENT SHALL THE CREDIT HEREIN PROVIDED FOR BE ALLOWED IN ANY
 AMOUNT  WHICH WILL REDUCE THE TAX PAYABLE TO LESS THAN THE DOLLAR AMOUNT
 FIXED AS A MINIMUM TAX BY SUBSECTION (B)  OF  SECTION  FOURTEEN  HUNDRED
 FIFTY-FIVE.
   (4) (A) ELIGIBLE PROPERTY VALUES, FOR THE PURPOSES OF THIS SUBSECTION,
 SHALL  INCLUDE  SUCH  PART OF THE VALUE OF DEPRECIABLE REAL AND TANGIBLE
 PERSONAL PROPERTY INCLUDED IN AN ELIGIBLE BUSINESS FACILITY  AS  REPRES-
 ENTS:
   (I) EXPENDITURES PAID OR INCURRED BY THE TAXPAYER FOR CAPITAL IMPROVE-
 MENTS  CONSISTING  OF  THE  CONSTRUCTION,  RECONSTRUCTION,  ERECTION  OR
 IMPROVEMENT OF REAL PROPERTY INCLUDED IN  AN  ELIGIBLE  FACILITY,  WHICH
 CONSTRUCTION, RECONSTRUCTION, ERECTION OR IMPROVEMENTS WERE COMMENCED ON
 OR AFTER JULY FIRST, NINETEEN HUNDRED SIXTY-EIGHT;
   (II)  IN THE CASE OF REAL PROPERTY LEASED BY THE TAXPAYER FROM ANOTHER
 PARTY, EIGHT TIMES THE PORTION OF THE NET ANNUAL RENTAL  RATE  ATTRIBUT-
 ABLE  TO  SUCH  CONSTRUCTION,  RECONSTRUCTION,  ERECTION  OR IMPROVEMENT
 COMMENCED ON OR AFTER JULY FIRST, NINETEEN HUNDRED SIXTY-EIGHT;
   (III) EXPENDITURES PAID OR INCURRED BY THE TAXPAYER FOR  THE  PURCHASE
 OF  TANGIBLE  PERSONAL  PROPERTY,  OTHER  THAN  VEHICLES, INCLUDED IN AN
 ELIGIBLE BUSINESS FACILITY, PROVIDED SUCH PROPERTY WAS PURCHASED  ON  OR
 AFTER JULY FIRST, NINETEEN HUNDRED SIXTY-EIGHT; AND
   (IV)  IN  THE CASE OF TANGIBLE PERSONAL PROPERTY, OTHER THAN VEHICLES,
 LEASED BY THE TAXPAYER FROM ANOTHER PARTY AND INCLUDED  IN  AN  ELIGIBLE
 BUSINESS  FACILITY, EIGHT TIMES THE NET ANNUAL RENTAL RATE, PROVIDED THE
 PERIOD FOR WHICH SUCH PROPERTY WAS LEASED BY THE TAXPAYER  BEGAN  ON  OR
 AFTER JULY FIRST, NINETEEN HUNDRED SIXTY-EIGHT.
   (B)  PROVIDED,  HOWEVER, ELIGIBLE PROPERTY VALUES FOR PURPOSES OF THIS
 SUBDIVISION SHALL NOT INCLUDE EXPENDITURES PAID OR  INCURRED  MORE  THAN
 ONE  YEAR  PRIOR  TO  THE  FILING OF AN APPLICATION FOR A CERTIFICATE OF
 ELIGIBILITY PURSUANT TO SECTION ONE HUNDRED  NINETEEN  OF  THE  COMMERCE
 LAW,  AS  SUCH  SECTION  EXISTED ON MARCH THIRTY-FIRST, NINETEEN HUNDRED
 EIGHTY-THREE.
   (C) PROVIDED FURTHER THAT, FOR PURPOSES OF THIS  SUBSECTION,  ELIGIBLE
 PROPERTY  VALUES SHALL NOT INCLUDE THAT PORTION OF THE VALUE OF PROPERTY
 WHICH IS USED IN THE PRODUCTION OF ADJUSTED ELIGIBLE NET INCOME WHICH IS
 ALLOWED AS A DEDUCTION FROM ENTIRE NET INCOME AS SET FORTH IN SUBSECTION
 (F) OF SECTION FOURTEEN HUNDRED FIFTY-THREE OF THIS ARTICLE.
   (5) THE TOTAL OF ALL CREDITS ALLOWED PURSUANT TO  THIS  SUBSECTION  IN
 ANY TAXABLE YEAR OR YEARS WITH REFERENCE TO ANY ELIGIBLE BUSINESS FACIL-
 ITY SHALL NOT EXCEED THE TOTAL ELIGIBLE PROPERTY VALUES INCLUDED.
   (6)  IF A CREDIT IS ALLOWED FOR ANY TAXABLE YEAR AS HEREIN PROVIDED ON
 THE BASIS OF A CERTIFICATE OF ELIGIBILITY, AND IF  SUCH  CERTIFICATE  IS
 REVOKED  OR  MODIFIED,  THE  TAXPAYER  SHALL  REPORT  SUCH REVOCATION OR
 MODIFICATION IN ITS RETURN FOR THE TAXABLE YEAR DURING WHICH IT  OCCURS,
 AND  THE  TAX  COMMISSION SHALL RECOMPUTE SUCH CREDIT AND MAY ASSESS ANY
 ADDITIONAL TAX RESULTING FROM SUCH RECOMPUTATION WITHIN THE  TIME  FIXED
 BY  PARAGRAPH NINE OF SUBSECTION (C) OF SECTION TEN HUNDRED EIGHTY-THREE
 OF THIS CHAPTER.

 S. 1680                            54
 
   (7) IF A BUSINESS FACILITY OWNED OR OPERATED BY A TAXPAYER SHALL BE AN
 ELIGIBLE BUSINESS FACILITY FOR ONLY PART OF A TAXABLE YEAR,  THE  CREDIT
 ALLOWED  BY  THIS  SUBDIVISION SHALL BE PRORATED ACCORDING TO THE PERIOD
 SUCH FACILITY WAS AN ELIGIBLE BUSINESS FACILITY, AND IF THE TOTAL OF THE
 ELIGIBLE  PROPERTY  VALUES SHALL HAVE CHANGED DURING ANY TAXABLE YEAR, A
 PRO-RATA ADJUSTMENT SHALL BE MADE IN COMPUTING SUCH CREDIT.
   (8) THE STATE TAX COMMISSION SHALL BE EMPOWERED,  ON  OR  AFTER  APRIL
 FIRST,  NINETEEN  HUNDRED EIGHTY-THREE, TO ISSUE A CERTIFICATE OF ELIGI-
 BILITY FOR TAX CREDITS TO A TAXPAYER FOR AN ELIGIBLE  BUSINESS  FACILITY
 WITH  REGARD  TO  WHICH SUCH TAXPAYER HAS, PRIOR TO JULY FIRST, NINETEEN
 HUNDRED EIGHTY-THREE, RECEIVED FROM THE NEW  YORK  STATE  JOB  INCENTIVE
 BOARD  INITIAL  APPROVAL  OF AN APPLICATION FOR SUCH CERTIFICATE BY SUCH
 BOARD AS EVIDENCED BY THE MINUTES OF THE MEETING OF THE BOARD  AT  WHICH
 SUCH  APPLICATION  WAS  APPROVED,  OR  A  LETTER OF INTENT AUTHORIZED BY
 SECTION 102.4 OF PART ONE HUNDRED TWO OF TITLE FIVE OF THE CODES,  RULES
 AND  REGULATIONS  OF THE STATE OF NEW YORK REGARDING SUCH CERTIFICATE OF
 ELIGIBILITY AND TO RENEW, EXTEND, REVOKE  OR  MODIFY  A  CERTIFICATE  OF
 ELIGIBILITY  FOR  TAX CREDITS, PURSUANT TO SECTION ONE HUNDRED TWENTY OF
 THE COMMERCE LAW AS SUCH SECTION EXISTED ON MARCH THIRTY-FIRST, NINETEEN
 HUNDRED EIGHTY-THREE.
   (9) FOR PURPOSES OF THE REQUIREMENT FOR  ELIGIBILITY  FOR  THE  CREDIT
 ALLOWED UNDER THIS SUBDIVISION THAT A BUSINESS FACILITY CREATE OR RETAIN
 NOT  LESS  THAN  FIVE JOBS AS PROVIDED IN SUBDIVISION (C) OF SECTION ONE
 HUNDRED EIGHTEEN OF THE COMMERCE LAW AS SUCH SECTION  EXISTED  ON  MARCH
 THIRTY-FIRST,  NINETEEN  HUNDRED EIGHTY-THREE, A BUSINESS FACILITY SHALL
 HAVE (I) CREATED NOT LESS THAN FIVE JOBS ONLY IF THE NUMBER OF JOBS  FOR
 THE TAXABLE YEAR EXCEEDS THE NUMBER OF JOBS AT THE TIME OF THE COMMENCE-
 MENT OF THE PROJECT AS STATED ON ITS APPLICATION FOR INITIAL APPROVAL BY
 FIVE  OR  MORE; OR (II) RETAINED NOT LESS THAN FIVE JOBS ONLY IF INITIAL
 APPROVAL WAS BASED ON THE RETENTION OF FIVE OR MORE  JOBS  AND  (A)  THE
 NUMBER  OF  JOBS FOR THE TAXABLE YEAR IS AT LEAST EQUAL TO THE NUMBER OF
 JOBS AT THE TIME OF THE COMMENCEMENT OF THE PROJECT  AS  STATED  ON  ITS
 APPLICATION FOR INITIAL APPROVAL OR (B) WHERE INITIAL APPROVAL WAS BASED
 ON  THE  RETENTION  OF FEWER JOBS THAN THE NUMBER OF JOBS AT THE TIME OF
 THE COMMENCEMENT OF THE PROJECT AS STATED ON ITS APPLICATION FOR INITIAL
 APPROVAL, THE NUMBER OF JOBS FOR THE TAXABLE YEAR IS AT LEAST  EQUAL  TO
 THE  NUMBER  APPROVED FOR RETENTION. FOR PURPOSES OF THIS PARAGRAPH, THE
 PHRASE "INITIAL APPROVAL WAS BASED ON THE  RETENTION  OF  FIVE  OR  MORE
 JOBS"  SHALL MEAN THAT SUCH INITIAL APPROVAL WAS GIVEN BY THE JOB INCEN-
 TIVE BOARD TO AN APPLICANT THAT HAD NOT STATED IN  ITS  APPLICATION  FOR
 INITIAL APPROVAL THAT IT WOULD INCREASE THE NUMBER OF JOBS AT ITS FACIL-
 ITY BY AT LEAST FIVE.
   (C)  MORTGAGE  RECORDING TAX CREDIT. (1) A TAXPAYER SHALL BE ALLOWED A
 CREDIT, TO BE CREDITED AGAINST THE TAX  IMPOSED  BY  THIS  ARTICLE.  THE
 AMOUNT OF THE CREDIT SHALL BE THE AMOUNT OF THE SPECIAL ADDITIONAL MORT-
 GAGE  RECORDING  TAX  PAID BY THE TAXPAYER PURSUANT TO THE PROVISIONS OF
 SUBDIVISION ONE-A OF SECTION TWO HUNDRED FIFTY-THREE OF THIS CHAPTER  ON
 MORTGAGES  RECORDED  ON AND AFTER JANUARY FIRST, NINETEEN HUNDRED SEVEN-
 TY-NINE. PROVIDED, HOWEVER, NO CREDIT SHALL BE ALLOWED WITH RESPECT TO A
 MORTGAGE OF REAL PROPERTY PRINCIPALLY IMPROVED OR TO BE IMPROVED BY  ONE
 OR  MORE  STRUCTURES CONTAINING IN THE AGGREGATE NOT MORE THAN SIX RESI-
 DENTIAL DWELLING UNITS, EACH DWELLING UNIT HAVING ITS OWN SEPARATE COOK-
 ING FACILITIES, WHERE THE REAL PROPERTY IS LOCATED IN ONE OR MORE OF THE
 COUNTIES COMPRISING THE METROPOLITAN  COMMUTER  TRANSPORTATION  DISTRICT
 AND  WHERE  THE  MORTGAGE  IS  RECORDED  ON OR AFTER MAY FIRST, NINETEEN
 HUNDRED EIGHTY-SEVEN. PROVIDED, HOWEVER, NO CREDIT SHALL BE ALLOWED WITH

 S. 1680                            55
 
 RESPECT TO A MORTGAGE OF REAL PROPERTY PRINCIPALLY  IMPROVED  OR  TO  BE
 IMPROVED  BY ONE OR MORE STRUCTURES CONTAINING IN THE AGGREGATE NOT MORE
 THAN SIX RESIDENTIAL DWELLING UNITS, EACH DWELLING UNIT HAVING  ITS  OWN
 SEPARATE  COOKING  FACILITIES, WHERE THE REAL PROPERTY IS LOCATED IN THE
 COUNTY OF ERIE AND WHERE THE MORTGAGE IS RECORDED ON OR AFTER MAY FIRST,
 NINETEEN HUNDRED EIGHTY-SEVEN.
   (2) IN NO EVENT SHALL THE CREDIT HEREIN PROVIDED FOR,  AND  CARRYOVERS
 OF  SUCH  CREDIT,  IN  THE AGGREGATE, BE ALLOWED IN AN AMOUNT WHICH WILL
 REDUCE THE TAX PAYABLE TO LESS THAN THE DOLLAR AMOUNT FIXED AS A MINIMUM
 TAX BY SUBSECTION (B) OF SECTION FOURTEEN HUNDRED  FIFTY-FIVE.  HOWEVER,
 IF THE AMOUNT OF CREDIT OR CARRYOVERS OF SUCH CREDIT, OR BOTH, ALLOWABLE
 UNDER  THIS  SUBDIVISION  FOR  ANY  TAXABLE YEAR REDUCES THE TAX TO SUCH
 AMOUNT, ANY AMOUNT OF CREDIT OR  CARRYOVERS  OF  SUCH  CREDIT  THUS  NOT
 DEDUCTIBLE  IN  SUCH  TAXABLE  YEAR MAY BE CARRIED OVER TO THE FOLLOWING
 YEAR OR YEARS AND MAY BE DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH  YEAR
 OR YEARS.
   (D) EMPIRE ZONE CAPITAL CREDIT.
   (1)  A  TAXPAYER  SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED BY
 THIS ARTICLE. THE AMOUNT OF THE CREDIT SHALL  BE  EQUAL  TO  TWENTY-FIVE
 PERCENT  OF  THE SUM OF THE FOLLOWING INVESTMENTS AND CONTRIBUTIONS MADE
 DURING THE TAXABLE YEAR AND CERTIFIED BY THE  COMMISSIONER  OF  ECONOMIC
 DEVELOPMENT:  (A)  FOR TAXABLE YEARS BEGINNING BEFORE JANUARY FIRST, TWO
 THOUSAND FIVE, QUALIFIED INVESTMENTS MADE IN, OR  CONTRIBUTIONS  IN  THE
 FORM  OF DONATIONS MADE TO, ONE OR MORE EMPIRE ZONE CAPITAL CORPORATIONS
 ESTABLISHED PURSUANT TO SECTION NINE HUNDRED SIXTY-FOUR OF  THE  GENERAL
 MUNICIPAL  LAW  PRIOR TO JANUARY FIRST, TWO THOUSAND FIVE, (B) QUALIFIED
 INVESTMENTS IN CERTIFIED ZONE BUSINESSES WHICH DURING THE  TWELVE  MONTH
 PERIOD  IMMEDIATELY PRECEDING THE MONTH IN WHICH SUCH INVESTMENT IS MADE
 EMPLOYED FULL-TIME WITHIN THE STATE AN AVERAGE  NUMBER  OF  INDIVIDUALS,
 EXCLUDING  GENERAL  EXECUTIVE  OFFICERS,  OF TWO HUNDRED FIFTY OR FEWER,
 COMPUTED PURSUANT TO THE PROVISIONS OF SUBPARAGRAPH (C) OF PARAGRAPH TWO
 OF SUBSECTION (E) OF THIS SECTION, EXCEPT FOR 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,  AND  (C)
 CONTRIBUTIONS  OF  MONEY TO COMMUNITY DEVELOPMENT PROJECTS AS DEFINED IN
 REGULATIONS PROMULGATED BY THE  COMMISSIONER  OF  ECONOMIC  DEVELOPMENT.
 "QUALIFIED  INVESTMENTS"  MEANS THE CONTRIBUTION OF PROPERTY TO A CORPO-
 RATION IN EXCHANGE FOR ORIGINAL ISSUE CAPITAL 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 PARTNERSHIP FORM IN  EXCHANGE  FOR
 AN  OWNERSHIP INTEREST IN SUCH ENTITY. THE TOTAL AMOUNT OF CREDIT ALLOW-
 ABLE TO A TAXPAYER UNDER THIS PROVISION FOR  ALL  YEARS,  TAKEN  IN  THE
 AGGREGATE,  SHALL  NOT  EXCEED THREE HUNDRED THOUSAND DOLLARS, AND SHALL
 NOT EXCEED ONE HUNDRED THOUSAND DOLLARS WITH RESPECT TO THE  INVESTMENTS
 AND CONTRIBUTIONS DESCRIBED IN EACH OF SUBPARAGRAPHS (A), (B) AND (C) OF
 THIS PARAGRAPH.
   (2)  THE  CREDIT  AND  CARRYOVER  OF  SUCH  CREDIT  ALLOWED UNDER THIS
 SUBSECTION FOR ANY TAXABLE YEAR SHALL NOT, IN THE AGGREGATE, REDUCE  THE
 TAX  DUE  FOR SUCH YEAR TO LESS THAN THE MINIMUM TAX FIXED BY SUBSECTION
 (B) OF SECTION FOURTEEN HUNDRED FIFTY-FIVE OF THIS ARTICLE. HOWEVER,  IF
 THE  AMOUNT  OF  CREDIT  OR  CARRYOVERS OF SUCH CREDIT, OR BOTH, ALLOWED
 UNDER THIS SUBSECTION FOR ANY TAXABLE  YEAR  REDUCES  THE  TAX  TO  SUCH
 AMOUNT,  OR  IF  ANY PART OF THE CREDIT OR CARRYOVERS OF SUCH CREDIT MAY

 S. 1680                            56
 
 NOT BE DEDUCTED FROM THE TAX  OTHERWISE  DUE  BY  REASON  OF  THE  FINAL
 SENTENCE  OF  THIS PARAGRAPH, ANY AMOUNT OF CREDIT OR CARRYOVERS OF SUCH
 CREDIT THUS NOT DEDUCTIBLE IN SUCH TAXABLE YEAR MAY BE CARRIED  OVER  TO
 THE  FOLLOWING  YEAR  OR YEARS AND MAY BE DEDUCTED FROM THE TAX FOR SUCH
 YEAR OR YEARS. IN ADDITION, THE AMOUNT OF SUCH CREDIT, 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  FOURTEEN  HUNDRED  FIFTY-FIVE  OF THIS ARTICLE COMPUTED WITHOUT
 REGARD TO ANY CREDIT PROVIDED FOR UNDER THIS ARTICLE.
   (2-A) ANY CARRYOVER OF A CREDIT FROM PRIOR TAXABLE YEARS WILL  NOT  BE
 ALLOWED  TO  AN EMPIRE ZONE ENTERPRISE WHICH IS THE BASIS OF THE CREDIT,
 IF AN EMPIRE ZONE RETENTION CERTIFICATE IS NOT  ISSUED  TO  SUCH  ENTITY
 PURSUANT  TO  SUBDIVISION  (W) OF SECTION NINE HUNDRED FIFTY-NINE OF THE
 GENERAL MUNICIPAL LAW.
   (3) WHERE THE STOCK, PARTNERSHIP INTEREST OR OTHER OWNERSHIP  INTEREST
 ARISING  FROM  A  QUALIFIED INVESTMENT AS DESCRIBED IN SUBPARAGRAPHS (A)
 AND (B) OF PARAGRAPH ONE OF THIS SUBSECTION IS DISPOSED OF, THE  TAXPAY-
 ER'S  ENTIRE  NET  INCOME  SHALL  BE  COMPUTED,  PURSUANT TO REGULATIONS
 PROMULGATED BY THE COMMISSIONER, SO AS TO PROPERLY REFLECT  THE  REDUCED
 COST  THEREOF  ARISING  FROM  THE APPLICATION OF THE CREDIT PROVIDED FOR
 HEREIN.
   (4)(A) WHERE A TAXPAYER SELLS,  TRANSFERS  OR  OTHERWISE  DISPOSES  OF
 CORPORATE  STOCK,  A  PARTNERSHIP  INTEREST  OR OTHER OWNERSHIP INTEREST
 ARISING FROM THE MAKING OF A QUALIFIED INVESTMENT WHICH WAS  THE  BASIS,
 IN  WHOLE OR IN PART, FOR THE ALLOWANCE OF THE CREDIT PROVIDED FOR UNDER
 THIS SUBSECTION, OR WHERE A CONTRIBUTION OR  INVESTMENT  WHICH  WAS  THE
 BASIS  FOR  SUCH ALLOWANCE IS IN ANY MANNER, IN WHOLE OR IN PART, RECOV-
 ERED BY SUCH TAXPAYER, AND SUCH DISPOSITION OR  RECOVERY  OCCURS  DURING
 THE TAXABLE YEAR OR WITHIN THIRTY-SIX MONTHS FROM THE CLOSE OF THE TAXA-
 BLE  YEAR WITH RESPECT TO WHICH SUCH CREDIT IS ALLOWED, SUBPARAGRAPH (B)
 OF THIS PARAGRAPH SHALL APPLY.
   (B) THE TAXPAYER SHALL ADD BACK WITH RESPECT TO THE  TAXABLE  YEAR  IN
 WHICH  THE DISPOSITION OR RECOVERY DESCRIBED IN SUBPARAGRAPH (A) OF THIS
 PARAGRAPH  OCCURRED  THE  REQUIRED  PORTION  OF  THE  CREDIT  ORIGINALLY
 ALLOWED.
   (C) THE REQUIRED PORTION OF THE CREDIT ORIGINALLY ALLOWED SHALL BE THE
 PRODUCT  OF  (I) THE PORTION OF SUCH CREDIT ATTRIBUTABLE TO THE PROPERTY
 DISPOSED OF OR THE PAYMENT OR CONTRIBUTION RECOVERED AND (II) THE APPLI-
 CABLE PERCENTAGE.
   (D) THE APPLICABLE PERCENTAGE SHALL BE:
   (I) ONE HUNDRED PERCENT, IF THE DISPOSITION OR RECOVERY OCCURS  WITHIN
 THE  TAXABLE  YEAR WITH RESPECT TO WHICH THE CREDIT IS ALLOWED OR WITHIN
 TWELVE MONTHS OF THE END OF SUCH TAXABLE YEAR,
   (II) SIXTY-SEVEN PERCENT, IF THE DISPOSITION OR RECOVERY  OCCURS  MORE
 THAN  TWELVE  BUT  NOT MORE THAN TWENTY-FOUR MONTHS AFTER THE END OF THE
 TAXABLE YEAR WITH RESPECT TO WHICH THE CREDIT IS ALLOWED, OR
   (III) THIRTY-THREE PERCENT, IF THE DISPOSITION OR RECOVERY OCCURS MORE
 THAN TWENTY-FOUR BUT NOT MORE THAN THIRTY-SIX MONTHS AFTER  THE  END  OF
 THE TAXABLE YEAR WITH RESPECT TO WHICH THE CREDIT IS ALLOWED.
   (5)  IF  THE  DESIGNATION OF AN AREA AS AN EMPIRE ZONE IS NO LONGER IN
 EFFECT BECAUSE THE DESIGNATIONS OF ALL EMPIRE ZONES PURSUANT TO  ARTICLE
 EIGHTEEN-B  OF  THE  GENERAL MUNICIPAL LAW HAVE EXPIRED, A TAXPAYER THAT
 HAS MADE A CONTRIBUTION OF  MONEY  ON  OR  BEFORE  THE  DAY  IMMEDIATELY
 PRECEDING  THE  DAY  THE EMPIRE ZONES EXPIRED TO A COMMUNITY DEVELOPMENT
 PROJECT APPROVED BY THE COMMISSIONER OF ECONOMIC  DEVELOPMENT  SHALL  BE
 DEEMED  ELIGIBLE  TO CLAIM THE EMPIRE ZONE CAPITAL CREDIT UNDER SUBPARA-

 S. 1680                            57
 
 GRAPH (C) OF PARAGRAPH ONE OF THIS SUBSECTION  FOR  ADDITIONAL  CONTRIB-
 UTIONS MADE PRIOR TO APRIL FIRST, TWO THOUSAND FOURTEEN AND CERTIFIED BY
 THE  COMMISSIONER  OF ECONOMIC DEVELOPMENT TO THAT COMMUNITY DEVELOPMENT
 PROJECT AS PAYMENT OF A COMMITMENT MADE BY THE TAXPAYER TO THAT COMMUNI-
 TY DEVELOPMENT PROJECT BEFORE THE EMPIRE ZONES EXPIRED.
   (E)  EMPIRE  ZONE  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 CERTIFIED PURSUANT TO ARTI-
 CLE EIGHTEEN-B OF THE GENERAL MUNICIPAL LAW. THE AMOUNT OF  SUCH  CREDIT
 SHALL BE AS PRESCRIBED IN PARAGRAPH FOUR HEREOF.
   (2)  FOR  PURPOSES  OF THIS SUBSECTION, THE FOLLOWING TERMS SHALL HAVE
 THE FOLLOWING MEANINGS: (A) "EMPIRE ZONE WAGES" MEANS WAGES PAID BY  THE
 TAXPAYER FOR FULL-TIME EMPLOYMENT, OTHER THAN TO GENERAL EXECUTIVE OFFI-
 CERS, DURING THE TAXABLE YEAR IN AN AREA DESIGNATED OR PREVIOUSLY DESIG-
 NATED  AS  AN  EMPIRE  ZONE  OR ZONE EQUIVALENT AREA PURSUANT TO ARTICLE
 EIGHTEEN-B OF THE GENERAL MUNICIPAL LAW WHERE SUCH EMPLOYMENT  IS  IN  A
 JOB  CREATED  IN THE AREA (I) DURING THE PERIOD OF ITS DESIGNATION AS AN
 EMPIRE ZONE, (II) WITHIN FOUR YEARS OF THE  EXPIRATION  OF  SUCH  DESIG-
 NATION,  OR  (III)  DURING THE TEN YEAR PERIOD IMMEDIATELY FOLLOWING THE
 DATE OF DESIGNATION AS A ZONE EQUIVALENT AREA, PROVIDED,  HOWEVER,  THAT
 IF  THE TAXPAYER'S CERTIFICATION UNDER ARTICLE EIGHTEEN-B OF THE GENERAL
 MUNICIPAL LAW IS REVOKED WITH RESPECT TO AN EMPIRE ZONE OR  ZONE  EQUIV-
 ALENT  AREA,  ANY  WAGES PAID BY THE TAXPAYER, ON OR AFTER THE EFFECTIVE
 DATE OF SUCH DECERTIFICATION, FOR EMPLOYMENT  IN  SUCH  ZONE  SHALL  NOT
 CONSTITUTE EMPIRE ZONE WAGES.
   (B)  "TARGETED EMPLOYEE" MEANS A NEW YORK RESIDENT WHO RECEIVES EMPIRE
 ZONE 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 EMPIRE ZONE
 WAGES.
   (C) "AVERAGE NUMBER OF INDIVIDUALS, EXCLUDING GENERAL EXECUTIVE  OFFI-
 CERS,  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 APPLICA-
 BLE PERIOD, BY ADDING TOGETHER THE NUMBER  OF  SUCH  INDIVIDUALS  ASCER-
 TAINED  ON  EACH  OF  SUCH DATES AND DIVIDING THE SUM SO OBTAINED BY THE
 NUMBER OF SUCH DATES OCCURRING WITHIN SUCH TAXABLE YEAR OR OTHER  APPLI-
 CABLE PERIOD.
   (3)  THE  CREDIT  PROVIDED  FOR HEREIN SHALL BE ALLOWED ONLY WHERE THE
 AVERAGE NUMBER OF INDIVIDUALS,  EXCLUDING  GENERAL  EXECUTIVE  OFFICERS,
 EMPLOYED  FULL-TIME  BY  THE  TAXPAYER IN (A) (I) THE STATE AND (II) THE

 S. 1680                            58
 
 EMPIRE ZONE OR AREA PREVIOUSLY CONSTITUTING SUCH ZONE OR ZONE EQUIVALENT
 AREA, DURING THE TAXABLE YEAR EXCEEDS THE AVERAGE NUMBER OF  SUCH  INDI-
 VIDUALS EMPLOYED FULL-TIME BY THE TAXPAYER IN (B) (I) THE STATE AND (II)
 SUCH  ZONE  OR AREA SUBSEQUENTLY OR PREVIOUSLY CONSTITUTING SUCH ZONE OR
 SUCH ZONE EQUIVALENT AREA, RESPECTIVELY, DURING  THE  FOUR  YEARS  IMME-
 DIATELY  PRECEDING THE FIRST TAXABLE YEAR IN WHICH THE CREDIT IS CLAIMED
 WITH RESPECT TO SUCH ZONE OR AREA. WHERE THE TAXPAYER PROVIDED FULL-TIME
 EMPLOYMENT WITHIN (C) (I) THE STATE OR (II) SUCH  ZONE  OR  AREA  DURING
 ONLY A PORTION OF SUCH FOUR-YEAR PERIOD, THEN FOR PURPOSES OF THIS PARA-
 GRAPH  THE  TERM  "FOUR  YEARS" SHALL BE DEEMED TO REFER INSTEAD TO SUCH
 PORTION, IF ANY.
   THE CREDIT SHALL BE ALLOWED ONLY WITH RESPECT  TO  THE  FIRST  TAXABLE
 YEAR  DURING WHICH PAYMENTS OF EMPIRE ZONE WAGES ARE MADE AND THE CONDI-
 TIONS SET FORTH IN THIS PARAGRAPH ARE SATISFIED,  AND  WITH  RESPECT  TO
 EACH OF THE FOUR TAXABLE YEARS NEXT FOLLOWING (BUT ONLY, WITH RESPECT TO
 EACH  OF  SUCH  YEARS,  IF SUCH CONDITIONS ARE SATISFIED), IN ACCORDANCE
 WITH PARAGRAPH FOUR OF THIS SUBSECTION. SUBSEQUENT CERTIFICATIONS OF THE
 TAXPAYER PURSUANT TO ARTICLE EIGHTEEN-B OF THE GENERAL MUNICIPAL LAW, AT
 THE SAME OR A DIFFERENT LOCATION IN THE SAME EMPIRE ZONE OR ZONE  EQUIV-
 ALENT  AREA  OR  AT A LOCATION IN A DIFFERENT EMPIRE ZONE OR ZONE EQUIV-
 ALENT AREA, SHALL NOT EXTEND THE FIVE TAXABLE YEAR  TIME  LIMITATION  ON
 THE  ALLOWANCE  OF  THE  CREDIT  SET  FORTH  IN  THE PRECEDING SENTENCE.
 PROVIDED, FURTHER, HOWEVER, THAT NO CREDIT SHALL BE ALLOWED WITH RESPECT
 TO ANY TAXABLE YEAR BEGINNING MORE THAN FOUR YEARS FOLLOWING THE TAXABLE
 YEAR IN WHICH DESIGNATION AS AN EMPIRE ZONE EXPIRED  OR  MORE  THAN  TEN
 YEARS AFTER THE DESIGNATION AS A ZONE EQUIVALENT AREA.
   (4) THE AMOUNT OF THE CREDIT SHALL EQUAL THE SUM OF (A) THE PRODUCT OF
 THREE  THOUSAND DOLLARS AND THE AVERAGE NUMBER OF INDIVIDUALS (EXCLUDING
 GENERAL EXECUTIVE OFFICERS) EMPLOYED FULL-TIME BY THE TAXPAYER, COMPUTED
 PURSUANT TO THE PROVISIONS OF SUBPARAGRAPH (C) OF PARAGRAPH TWO OF  THIS
 SUBSECTION, WHO (I) RECEIVED EMPIRE ZONE WAGES FOR MORE THAN HALF OF THE
 TAXABLE YEAR, (II) RECEIVED, WITH RESPECT TO MORE THAN HALF OF THE PERI-
 OD 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  GENERAL  EXECUTIVE  OFFICERS  AND   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  EMPIRE  ZONE  WAGES  FOR
 MORE THAN HALF OF THE TAXABLE YEAR.
   (C)  FOR PURPOSES OF CALCULATING THE AMOUNT OF THE CREDIT, INDIVIDUALS
 EMPLOYED WITHIN AN EMPIRE ZONE OR ZONE EQUIVALENT AREA WITHIN THE  IMME-
 DIATELY  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  SUBPARA-
 GRAPH  (A)  OR  SUBPARAGRAPH  (B) OF THIS PARAGRAPH, UNLESS SUCH RELATED
 PERSON WAS NEVER ALLOWED A CREDIT UNDER THIS SUBSECTION WITH RESPECT  TO
 SUCH  EMPLOYEES.  FOR  THE  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.
   (D) IF A TAXPAYER IS CERTIFIED IN  AN  EMPIRE  ZONE  DESIGNATED  UNDER
 SUBDIVISION (A) OR (D) OF SECTION NINE HUNDRED FIFTY-EIGHT OF THE GENER-

 S. 1680                            59
 
 AL MUNICIPAL LAW, THE DOLLAR AMOUNTS SPECIFIED UNDER SUBPARAGRAPH (A) OR
 (B)  OF  THIS  PARAGRAPH  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.
   (E)  THE  REQUIREMENT  IN THIS PARAGRAPH THAT AN EMPLOYEE MUST RECEIVE
 EMPIRE ZONE WAGES FOR MORE THAN HALF THE TAXABLE YEAR SHALL NOT APPLY IN
 THE FIRST TAXABLE YEAR OF A TAXPAYER SATISFYING THE CRITERIA  SET  FORTH
 IN  THIS  SUBPARAGRAPH.  IN  SUCH  A CASE, THE CREDIT ALLOWED UNDER THIS
 SUBSECTION SHALL BE COMPUTED BY  UTILIZING  THE  NUMBER  OF  INDIVIDUALS
 (EXCLUDING GENERAL EXECUTIVE OFFICERS) EMPLOYED FULL TIME BY THE TAXPAY-
 ER  ON  THE LAST DAY OF ITS FIRST TAXABLE YEAR. A TAXPAYER SHALL SATISFY
 THE FOLLOWING CRITERIA: (I) SUCH  TAXPAYER  ACQUIRED  REAL  OR  TANGIBLE
 PERSONAL  PROPERTY DURING ITS FIRST TAXABLE YEAR FROM AN ENTITY WHICH IS
 NOT A RELATED PERSON (AS SUCH TERM IS  DEFINED  IN  SUBDIVISION  (G)  OF
 SECTION  FOURTEEN  OF THIS CHAPTER); (II) THE FIRST TAXABLE YEAR OF SUCH
 TAXPAYER SHALL BE A SHORT TAXABLE YEAR OF NOT MORE THAN SEVEN MONTHS  IN
 DURATION;  AND (III) THE NUMBER OF INDIVIDUALS EMPLOYED FULL-TIME ON THE
 LAST DAY OF SUCH FIRST TAXABLE YEAR SHALL BE AT LEAST ONE HUNDRED NINETY
 AND SUBSTANTIALLY ALL OF SUCH  INDIVIDUALS  MUST  HAVE  BEEN  PREVIOUSLY
 EMPLOYED BY THE ENTITY FROM WHOM SUCH TAXPAYER PURCHASED ITS ASSETS.
   PROVIDED,  FURTHER,  HOWEVER, THAT THE CREDIT PROVIDED FOR HEREIN WITH
 RESPECT TO THE TAXABLE YEAR, AND CARRYOVERS OF SUCH CREDIT TO THE  TAXA-
 BLE  YEAR,  DEDUCTED  FROM THE TAX OTHERWISE DUE, MAY NOT, IN THE AGGRE-
 GATE, EXCEED FIFTY PERCENT OF THE TAX  IMPOSED  UNDER  SECTION  FOURTEEN
 HUNDRED  FIFTY-FIVE  COMPUTED  WITHOUT REGARD TO ANY CREDIT PROVIDED FOR
 UNDER THIS ARTICLE.
   (5) THE CREDIT AND  CARRYOVERS  OF  SUCH  CREDIT  ALLOWED  UNDER  THIS
 SUBSECTION  FOR ANY TAXABLE YEAR SHALL NOT, IN THE AGGREGATE, REDUCE THE
 TAX DUE FOR SUCH YEAR TO LESS THAN THE MINIMUM TAX FIXED  BY  SUBSECTION
 (B)  OF SECTION FOURTEEN HUNDRED FIFTY-FIVE OF THIS ARTICLE. HOWEVER, IF
 THE AMOUNT OF CREDIT OR CARRYOVERS OF  SUCH  CREDIT,  OR  BOTH,  ALLOWED
 UNDER  THIS  SUBSECTION  FOR  ANY  TAXABLE  YEAR REDUCES THE TAX TO SUCH
 AMOUNT, OR IF ANY PART OF THE CREDIT OR CARRYOVERS OF  SUCH  CREDIT  MAY
 NOT  BE  DEDUCTED  FROM  THE  TAX  OTHERWISE  DUE BY REASON OF THE FINAL
 SENTENCE IN PARAGRAPH FOUR HEREOF, ANY AMOUNT OF CREDIT OR CARRYOVERS OF
 SUCH CREDIT THUS NOT DEDUCTIBLE IN SUCH TAXABLE YEAR MAY BE CARRIED OVER
 TO THE FOLLOWING YEAR OR YEARS AND MAY BE DEDUCTED FROM  THE  TAXPAYER'S
 TAX FOR SUCH YEAR OR YEARS.
   (5-A)  ANY CARRY OVER OF A CREDIT FROM PRIOR TAXABLE YEARS WILL NOT BE
 ALLOWED IF AN EMPIRE ZONE RETENTION CERTIFICATE IS NOT  ISSUED  PURSUANT
 TO  SUBDIVISION  (W)  OF  SECTION NINE HUNDRED FIFTY-NINE OF THE GENERAL
 MUNICIPAL LAW TO THE EMPIRE ZONE ENTERPRISE WHICH IS THE  BASIS  OF  THE
 CREDIT.
   (E-1)  HIRE  A  VET CREDIT. (1) ALLOWANCE OF CREDIT. FOR TAXABLE YEARS
 BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND TWENTY-ONE AND  BEFORE
 JANUARY  FIRST, TWO THOUSAND TWENTY-THREE, A TAXPAYER SHALL BE ALLOWED A
 CREDIT, TO BE COMPUTED AS PROVIDED IN THIS SUBSECTION, AGAINST  THE  TAX
 IMPOSED BY THIS ARTICLE, FOR HIRING AND EMPLOYING, FOR NOT LESS THAN ONE
 YEAR  AND  FOR  NOT  LESS  THAN THIRTY-FIVE HOURS EACH WEEK, A QUALIFIED
 VETERAN WITHIN THE STATE. THE TAXPAYER MAY CLAIM THE CREDIT IN THE  YEAR
 IN  WHICH  THE QUALIFIED VETERAN COMPLETES ONE YEAR OF EMPLOYMENT BY THE
 TAXPAYER.  IF  THE  TAXPAYER  CLAIMS  THE  CREDIT  ALLOWED  UNDER   THIS
 SUBSECTION,  THE  TAXPAYER MAY NOT USE THE HIRING OF A QUALIFIED VETERAN
 THAT IS THE BASIS FOR THIS CREDIT IN  THE  BASIS  OF  ANY  OTHER  CREDIT
 ALLOWED IN THIS ARTICLE.
   (2) QUALIFIED VETERAN. A QUALIFIED VETERAN IS AN INDIVIDUAL:

 S. 1680                            60
 
   (A)  WHO  SERVED  ON  ACTIVE DUTY IN THE UNITED STATES ARMY, NAVY, AIR
 FORCE, MARINE CORPS, COAST GUARD OR THE RESERVES THEREOF, OR WHO  SERVED
 IN  ACTIVE MILITARY SERVICE OF THE UNITED STATES AS A MEMBER OF THE ARMY
 NATIONAL GUARD, AIR NATIONAL GUARD, NEW YORK GUARD  OR  NEW  YORK  NAVAL
 MILITIA;  WHO  WAS  RELEASED  FROM  ACTIVE  DUTY BY GENERAL OR HONORABLE
 DISCHARGE AFTER SEPTEMBER ELEVENTH, TWO THOUSAND ONE;
   (B) WHO COMMENCES EMPLOYMENT BY THE QUALIFIED  TAXPAYER  ON  OR  AFTER
 JANUARY  FIRST,  TWO  THOUSAND  FOURTEEN,  AND BEFORE JANUARY FIRST, TWO
 THOUSAND SEVENTEEN; AND
   (C) WHO CERTIFIES BY SIGNED AFFIDAVIT, UNDER PENALTY OF PERJURY,  THAT
 HE OR SHE HAS NOT BEEN EMPLOYED FOR THIRTY-FIVE OR MORE HOURS DURING ANY
 WEEK  IN  THE  ONE HUNDRED EIGHTY DAY PERIOD IMMEDIATELY PRIOR TO HIS OR
 HER EMPLOYMENT BY THE TAXPAYER.
   (3) EMPLOYER PROHIBITION. AN EMPLOYER SHALL NOT DISCHARGE AN  EMPLOYEE
 AND  HIRE  A QUALIFYING VETERAN SOLELY FOR THE PURPOSE OF QUALIFYING FOR
 THIS CREDIT.
   (4) AMOUNT OF CREDIT. THE AMOUNT OF THE CREDIT SHALL BE TEN PERCENT OF
 THE TOTAL AMOUNT OF WAGES PAID  TO  THE  QUALIFIED  VETERAN  DURING  THE
 VETERAN'S FIRST FULL YEAR OF EMPLOYMENT. PROVIDED, HOWEVER, THAT, IF THE
 QUALIFIED  VETERAN IS A DISABLED VETERAN, AS DEFINED IN PARAGRAPH (B) OF
 SUBDIVISION ONE OF SECTION EIGHTY-FIVE OF THE  CIVIL  SERVICE  LAW,  THE
 AMOUNT  OF  THE  CREDIT  SHALL BE FIFTEEN PERCENT OF THE TOTAL AMOUNT OF
 WAGES PAID TO THE QUALIFIED VETERAN DURING THE VETERAN'S FIRST FULL YEAR
 OF EMPLOYMENT. THE CREDIT ALLOWED PURSUANT TO THIS SUBSECTION SHALL  NOT
 EXCEED  IN  ANY  TAXABLE  YEAR,  FIVE THOUSAND DOLLARS FOR ANY QUALIFIED
 VETERAN AND FIFTEEN THOUSAND DOLLARS FOR ANY QUALIFIED VETERAN WHO IS  A
 DISABLED VETERAN.
   (5)  CARRYOVER. THE CREDIT ALLOWED UNDER THIS SUBSECTION FOR ANY TAXA-
 BLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR  TO  LESS  THAN  THE
 AMOUNT  PRESCRIBED IN PARAGRAPH THREE OF SUBSECTION (B) OF SECTION FOUR-
 TEEN HUNDRED FIFTY-FIVE OF THIS ARTICLE. HOWEVER, IF THE AMOUNT OF CRED-
 IT ALLOWABLE UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR REDUCES THE  TAX
 TO SUCH AMOUNT, ANY AMOUNT OF CREDIT NOT DEDUCTIBLE IN SUCH TAXABLE YEAR
 MAY  BE  CARRIED  OVER  TO THE FOLLOWING THREE YEARS AND MAY BE DEDUCTED
 FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS.
   (F) CREDIT FOR EMPLOYMENT OF PERSONS WITH DISABILITIES. (1)  ALLOWANCE
 OF CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS HERE-
 INAFTER PROVIDED, AGAINST THE TAX IMPOSED BY THIS ARTICLE, FOR EMPLOYING
 WITHIN THE STATE A QUALIFIED EMPLOYEE.
   (2) QUALIFIED EMPLOYEE. A QUALIFIED EMPLOYEE IS AN INDIVIDUAL:
   (A) WHO IS CERTIFIED BY THE EDUCATION DEPARTMENT, OR IN THE CASE OF AN
 INDIVIDUAL  WHO  IS  BLIND  OR VISUALLY HANDICAPPED, BY THE STATE AGENCY
 RESPONSIBLE FOR PROVISION OF VOCATIONAL REHABILITATION SERVICES  TO  THE
 BLIND  AND VISUALLY HANDICAPPED: (I) AS A PERSON WITH A DISABILITY WHICH
 CONSTITUTES OR RESULTS IN A SUBSTANTIAL HANDICAP TO EMPLOYMENT AND  (II)
 AS  HAVING  COMPLETED  OR  AS RECEIVING SERVICES UNDER AN INDIVIDUALIZED
 WRITTEN REHABILITATION PLAN APPROVED  BY  THE  EDUCATION  DEPARTMENT  OR
 OTHER  STATE  AGENCY RESPONSIBLE FOR PROVIDING VOCATIONAL REHABILITATION
 SERVICES TO SUCH INDIVIDUAL; AND
   (B) WHO HAS WORKED ON A FULL-TIME BASIS FOR THE EMPLOYER WHO IS CLAIM-
 ING THE CREDIT FOR AT LEAST ONE HUNDRED  EIGHTY  DAYS  OR  FOUR  HUNDRED
 HOURS.
   (3)  AMOUNT  OF  CREDIT.  EXCEPT AS PROVIDED IN PARAGRAPH FOUR OF THIS
 SUBSECTION, THE AMOUNT OF CREDIT SHALL BE  THIRTY-FIVE  PERCENT  OF  THE
 FIRST  SIX THOUSAND DOLLARS IN QUALIFIED FIRST-YEAR WAGES EARNED BY EACH
 QUALIFIED EMPLOYEE. "QUALIFIED FIRST-YEAR WAGES"  MEANS  WAGES  PAID  OR

 S. 1680                            61
 
 INCURRED  BY THE TAXPAYER DURING THE TAXABLE YEAR TO QUALIFIED EMPLOYEES
 WHICH ARE ATTRIBUTABLE, WITH RESPECT TO ANY SUCH EMPLOYEE,  TO  SERVICES
 RENDERED  DURING THE ONE-YEAR PERIOD BEGINNING WITH THE DAY THE EMPLOYEE
 BEGINS WORK FOR THE TAXPAYER.
   (4)  CREDIT  WHERE  FEDERAL  WORK OPPORTUNITY TAX CREDIT APPLIES. WITH
 RESPECT TO ANY QUALIFIED EMPLOYEE WHOSE QUALIFIED FIRST-YEAR WAGES UNDER
 PARAGRAPH THREE OF THIS SUBSECTION ALSO CONSTITUTE QUALIFIED  FIRST-YEAR
 WAGES  FOR  PURPOSES  OF  THE WORK OPPORTUNITY TAX CREDIT FOR VOCATIONAL
 REHABILITATION REFERRALS UNDER SECTION FIFTY-ONE OF THE INTERNAL REVENUE
 CODE, THE AMOUNT OF CREDIT UNDER THIS SUBSECTION  SHALL  BE  THIRTY-FIVE
 PERCENT OF THE FIRST SIX THOUSAND DOLLARS IN QUALIFIED SECOND-YEAR WAGES
 EARNED  BY EACH SUCH EMPLOYEE. "QUALIFIED SECOND-YEAR WAGES" MEANS WAGES
 PAID OR INCURRED BY THE TAXPAYER DURING THE TAXABLE  YEAR  TO  QUALIFIED
 EMPLOYEES WHICH ARE ATTRIBUTABLE, WITH RESPECT TO ANY SUCH EMPLOYEES, TO
 SERVICES  RENDERED  DURING  THE ONE-YEAR PERIOD BEGINNING ONE YEAR AFTER
 THE EMPLOYEE BEGINS WORK FOR THE TAXPAYER.
   (5) CARRYOVER. THE CREDIT AND CARRYOVERS OF SUCH CREDIT ALLOWED  UNDER
 THIS SUBSECTION FOR ANY TAXABLE YEAR SHALL NOT, IN THE AGGREGATE, REDUCE
 THE  TAX  DUE  FOR  SUCH  YEAR  TO  LESS  THAN  THE MINIMUM TAX FIXED BY
 SUBSECTION (B) OF SECTION FOURTEEN HUNDRED FIFTY-FIVE OF  THIS  ARTICLE.
 HOWEVER,  IF THE AMOUNT OF CREDIT OR CARRYOVERS OF SUCH CREDIT, OR BOTH,
 ALLOWED UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE  TAX  TO
 SUCH AMOUNT, THEN ANY AMOUNT OF CREDIT OR CARRYOVERS OF SUCH CREDIT THUS
 NOT DEDUCTIBLE IN SUCH TAXABLE YEAR MAY BE CARRIED OVER TO THE FOLLOWING
 YEAR  OR YEARS AND MAY BE DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR
 OR YEARS.
   (6)  COORDINATION  WITH  FEDERAL  WORK  OPPORTUNITY  TAX  CREDIT.  THE
 PROVISIONS  OF  SECTIONS FIFTY-ONE AND FIFTY-TWO OF THE INTERNAL REVENUE
 CODE, AS SUCH SECTIONS APPLIED ON OCTOBER FIRST, NINETEEN HUNDRED  NINE-
 TY-SIX,  THAT  APPLY  TO  THE WORK OPPORTUNITY TAX CREDIT FOR VOCATIONAL
 REHABILITATION REFERRALS SHALL APPLY TO THE CREDIT UNDER THIS SUBSECTION
 TO THE EXTENT THAT  SUCH  SECTIONS  ARE  CONSISTENT  WITH  THE  SPECIFIC
 PROVISIONS  OF THIS SUBSECTION, PROVIDED THAT IN THE EVENT OF A CONFLICT
 THE PROVISIONS OF THIS SUBSECTION SHALL CONTROL.
   (G) ORDER OF CREDITS.  CREDITS  ALLOWABLE  UNDER  THIS  ARTICLE  WHICH
 CANNOT  BE  CARRIED  OVER AND WHICH ARE NOT REFUNDABLE SHALL BE DEDUCTED
 FIRST.  CREDITS ALLOWABLE UNDER THIS ARTICLE WHICH CAN BE CARRIED  OVER,
 AND  CARRYOVERS  OF SUCH CREDITS, SHALL BE DEDUCTED NEXT, AND AMONG SUCH
 CREDITS, THOSE WHOSE CARRYOVER IS OF LIMITED DURATION SHALL BE  DEDUCTED
 BEFORE  THOSE WHOSE CARRYOVER IS OF UNLIMITED DURATION; PROVIDED, HOWEV-
 ER, THAT THE CREDIT ALLOWABLE UNDER SUBSECTION (E) OF THIS SECTION SHALL
 BE DEDUCTED PRIOR TO ALL  OTHER  CREDITS  DESCRIBED  IN  THIS  SENTENCE.
 CREDITS  ALLOWABLE  UNDER  THIS  ARTICLE  WHICH  ARE REFUNDABLE SHALL BE
 DEDUCTED LAST.
   (H)  CREDITS  FOR  NEW  YORK  S  CORPORATIONS.   NOTWITHSTANDING   THE
 PROVISIONS  OF  THIS  SECTION, NO CARRYOVER OF CREDIT ALLOWABLE IN A NEW
 YORK C YEAR SHALL BE DEDUCTED FROM THE  TAX  OTHERWISE  DUE  UNDER  THIS
 ARTICLE  IN  A  NEW YORK S YEAR, AND NO CREDIT ALLOWABLE IN A NEW YORK S
 YEAR, OR CARRYOVER OF SUCH  CREDIT,  SHALL  BE  DEDUCTED  FROM  THE  TAX
 IMPOSED BY THIS ARTICLE.  HOWEVER, A NEW YORK S YEAR SHALL BE TREATED AS
 A  TAXABLE  YEAR FOR PURPOSES OF DETERMINING THE NUMBER OF TAXABLE YEARS
 TO WHICH A CREDIT MAY BE CARRIED OVER UNDER THIS SECTION.  NOTWITHSTAND-
 ING  THE  FIRST SENTENCE OF THIS SUBSECTION, HOWEVER, THE CREDIT FOR THE
 SPECIAL ADDITIONAL MORTGAGE RECORDING TAX SHALL BE ALLOWED  AS  PROVIDED
 IN  SUBSECTION (C) OF THIS SECTION, AND THE CARRYOVER OF ANY SUCH CREDIT

 S. 1680                            62
 
 SHALL BE DETERMINED WITHOUT REGARD TO WHETHER THE CREDIT IS CARRIED FROM
 A NEW YORK C YEAR TO A NEW YORK S YEAR OR VICE-VERSA.
   (I)  INVESTMENT  TAX  CREDIT  (ITC). (1) A TAXPAYER SHALL BE ALLOWED A
 CREDIT, TO BE COMPUTED AS HEREINAFTER PROVIDED, AGAINST THE TAX  IMPOSED
 BY THIS ARTICLE. PROVIDED, HOWEVER, A TAXPAYER SHALL NOT BE ALLOWED SUCH
 CREDIT  PROVIDED  BY THIS PARAGRAPH 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
 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 THE PURPOSES OF SUBPARAGRAPH (III)
 OF THIS PARAGRAPH 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 PRINCI-
 PALLY  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.  THE  AMOUNT  OF  THE CREDIT SHALL BE THE
 PERCENT PROVIDED FOR HEREIN BELOW OF THE  INVESTMENT  CREDIT  BASE.  THE
 INVESTMENT CREDIT BASE IS 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
 PARAGRAPH TWO OF THIS SUBSECTION, LESS THE AMOUNT  OF  THE  NONQUALIFIED
 NONRECOURSE  FINANCING  WITH RESPECT TO SUCH PROPERTY TO THE EXTENT SUCH
 FINANCING WOULD BE EXCLUDIBLE FROM THE CREDIT BASE PURSUANT  TO  SECTION
 46(C)(8) OF THE INTERNAL REVENUE CODE (TREATING SUCH PROPERTY AS SECTION
 THIRTY-EIGHT  PROPERTY IRRESPECTIVE OF WHETHER OR NOT IT IN FACT CONSTI-
 TUTES SECTION THIRTY-EIGHT PROPERTY).   IF, AT THE CLOSE  OF  A  TAXABLE
 YEAR  FOLLOWING  THE  TAXABLE  YEAR IN WHICH SUCH PROPERTY WAS PLACED IN
 SERVICE, THERE IS A NET DECREASE IN THE AMOUNT OF  NONQUALIFIED  NONREC-
 OURSE  FINANCING  WITH RESPECT TO SUCH PROPERTY, SUCH NET DECREASE SHALL
 BE TREATED AS IF IT WERE THE COST OR OTHER BASIS OF  PROPERTY  DESCRIBED
 IN PARAGRAPH TWO OF THIS SUBSECTION ACQUIRED, CONSTRUCTED, RECONSTRUCTED
 OR ERECTED DURING THE YEAR OF THE DECREASE IN THE AMOUNT OF NONQUALIFIED
 NONRECOURSE FINANCING. IN THE CASE OF A COMBINED REPORT THE TERM INVEST-
 MENT  CREDIT  BASE  SHALL  MEAN THE SUM OF THE INVESTMENT CREDIT BASE OF
 EACH CORPORATION INCLUDED ON SUCH REPORT. THE PERCENTAGE TO BE  USED  TO
 COMPUTE THE CREDIT ALLOWED PURSUANT TO THIS SUBSECTION SHALL BE
      FOR TAXABLE YEARS BEGINNING AFTER

 S. 1680                            63
 
      1997   ..................................  FIVE  PERCENT  WITH
      RESPECT TO THE FIRST THREE HUNDRED FIFTY  MILLION  DOLLARS  OF
      THE  INVESTMENT  CREDIT BASE, AND FOUR PERCENT WITH RESPECT TO
      THE INVESTMENT CREDIT BASE IN EXCESS OF  THREE  HUNDRED  FIFTY
      MILLION DOLLARS.
   (2)  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 (A) 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  SECURI-
 TIES  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, OR (B) PRINCIPAL-
 LY  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.
 FOR  PURPOSES  OF  SUBPARAGRAPHS (A) AND (B) OF THIS PARAGRAPH, 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 REGULATED BROKER,  DEALER,  OR
 REGISTERED  INVESTMENT  ADVISER  IN ACCORDANCE WITH THIS SUBSECTION. FOR
 PURPOSES OF DETERMINING IF THE PROPERTY IS PRINCIPALLY USED IN  QUALIFY-
 ING  USES,  THE  USES BY THE TAXPAYER DESCRIBED IN SUBPARAGRAPHS (A) AND
 (B) OF THIS PARAGRAPH MAY BE AGGREGATED. IN ADDITION, THE  USES  BY  THE
 TAXPAYER, ITS AFFILIATED REGULATED BROKER, DEALER AND REGISTERED INVEST-
 MENT  ADVISER  UNDER  EITHER OR BOTH OF SUCH SUBPARAGRAPHS MAY BE AGGRE-
 GATED.
   (3) A TAXPAYER SHALL NOT BE ALLOWED A  CREDIT  UNDER  THIS  SUBSECTION
 WITH  RESPECT  TO  ANY  PROPERTY  DESCRIBED  IN  PARAGRAPH  TWO  OF THIS
 SUBSECTION IF SUCH PROPERTY QUALIFIES FOR THE  DEDUCTION  ALLOWED  UNDER
 SUBSECTION  (K) OF SECTION ONE THOUSAND FOUR HUNDRED FIFTY-THREE OF THIS
 ARTICLE WHETHER OR NOT SUCH AMOUNT SHALL HAVE BEEN DEDUCTED.
   (4) A TAXPAYER SHALL NOT BE ALLOWED A  CREDIT  UNDER  THIS  SUBSECTION
 WITH  RESPECT TO TANGIBLE PERSONAL PROPERTY AND OTHER TANGIBLE PROPERTY,
 INCLUDING BUILDINGS AND STRUCTURAL COMPONENTS  OF  BUILDINGS,  WHICH  IT
 LEASES TO ANY OTHER PERSON OR CORPORATION EXCEPT WHERE A TAXPAYER LEASES
 PROPERTY  TO  AN  AFFILIATED  BROKER,  DEALER,  OR REGISTERED INVESTMENT
 ADVISER THAT USES SUCH PROPERTY IN ACCORDANCE WITH SUBPARAGRAPH  (A)  OR
 (B)  OF  PARAGRAPH TWO OF THIS SUBSECTION. FOR PURPOSES OF THE PRECEDING
 SENTENCE, ANY CONTRACT OR AGREEMENT TO LEASE OR RENT OR FOR A LICENSE TO
 USE SUCH PROPERTY SHALL BE CONSIDERED A LEASE.
   (5) EXCEPT AS OTHERWISE PROVIDED IN THIS PARAGRAPH, THE CREDIT ALLOWED
 UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX  DUE
 FOR  SUCH  YEAR TO LESS THAN THE DOLLAR AMOUNT FIXED AS A MINIMUM TAX BY
 SUBSECTION (B) OF SECTION ONE THOUSAND FOUR HUNDRED FIFTY-FIVE  OF  THIS

 S. 1680                            64
 
 ARTICLE.   HOWEVER,  IF  THE  AMOUNT  OF  CREDIT  ALLOWABLE  UNDER  THIS
 SUBSECTION FOR ANY TAXABLE YEAR REDUCES THE  TAX  TO  SUCH  AMOUNT,  ANY
 AMOUNT  OF  CREDIT ALLOWED FOR A TAXABLE YEAR MAY BE CARRIED OVER TO THE
 FIFTEEN  TAXABLE  YEARS  NEXT  FOLLOWING  SUCH  TAXABLE  YEAR AND MAY BE
 DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS. IN LIEU OF SUCH
 CARRYOVER, ANY SUCH TAXPAYER WHICH QUALIFIES AS  A  NEW  BUSINESS  UNDER
 PARAGRAPH EIGHT OF THIS SUBSECTION MAY ELECT TO TREAT THE AMOUNT OF SUCH
 CARRYOVER AS AN OVERPAYMENT OF TAX TO BE CREDITED OR REFUNDED IN ACCORD-
 ANCE  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.
   (6) AT THE OPTION OF THE TAXPAYER AN ELIGIBLE  BUSINESS  FACILITY  FOR
 WHICH  A  CREDIT  IS ALLOWED UNDER SUBSECTION (B) OF THIS SECTION MAY BE
 TREATED AS PROPERTY (A) 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, OR (B) 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, ASSUMPTION, OFFSET, ASSIGNMENT, TERMINATION, OR
 TRANSFER) OF SECURITIES AS DEFINED IN SECTION FOUR HUNDRED  SEVENTY-FIVE
 (C)  (2)  OF  THE  INTERNAL REVENUE CODE PROVIDED THE PROPERTY OTHERWISE
 QUALIFIES UNDER PARAGRAPH TWO OF THIS SUBSECTION, IN WHICH EVENT A CRED-
 IT SHALL NOT BE ALLOWED UNDER SUBSECTION (B) OF THIS SECTION.
   (7)(A) 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 SUBSECTION WHICH REPRESENTS THE RATIO WHICH THE MONTHS OF QUALIFIED
 USE  BEAR  TO THE MONTHS OF USEFUL LIFE. IF 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 DISPOSI-
 TION. 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 MONTHS OF USEFUL LIFE. FOR
 PURPOSES OF THIS SUBPARAGRAPH, USEFUL LIFE OF PROPERTY SHALL BE THE SAME
 AS THE TAXPAYER USES FOR DEPRECIATION PURPOSES WHEN COMPUTING HIS FEDER-
 AL INCOME TAX LIABILITY.
   (B)  EXCEPT WITH RESPECT TO THAT PROPERTY TO WHICH SUBPARAGRAPH (D) OF
 THIS PARAGRAPH APPLIES, WITH RESPECT TO THREE-YEAR PROPERTY, AS  DEFINED
 IN  SUBSECTION  (E)  OF  SECTION ONE HUNDRED SIXTY-EIGHT OF THE INTERNAL
 REVENUE CODE, WHICH IS DISPOSED OF OR CEASES  TO  BE  IN  QUALIFIED  USE

 S. 1680                            65
 
 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 SUBSECTION WHICH REPRESENTS THE RATIO WHICH  THE  MONTHS  OF
 QUALIFIED  USE  BEAR TO THIRTY-SIX. IF PROPERTY ON WHICH CREDIT HAS BEEN
 TAKEN IS DISPOSED OF OR CEASES TO BE IN QUALIFIED USE PRIOR TO  THE  END
 OF  THIRTY-SIX  MONTHS,  THE DIFFERENCE BETWEEN THE CREDIT TAKEN AND THE
 CREDIT ALLOWED FOR ACTUAL USE MUST BE ADDED BACK IN THE YEAR OF DISPOSI-
 TION. THE AMOUNT OF CREDIT ALLOWED FOR ACTUAL USE SHALL BE DETERMINED BY
 MULTIPLYING THE ORIGINAL CREDIT BY THE RATIO WHICH THE MONTHS OF  QUALI-
 FIED USE BEAR TO THIRTY-SIX.
   (C)  EXCEPT WITH RESPECT TO THAT PROPERTY TO WHICH SUBPARAGRAPH (D) 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 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 SUBSECTION 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 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.
   (D) 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 A 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 SUBSECTION 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.
   (E)  FOR  TAXABLE YEARS COMMENCING ON OR AFTER JANUARY FIRST, NINETEEN
 HUNDRED NINETY-EIGHT THE AMOUNT REQUIRED TO BE ADDED  BACK  PURSUANT  TO
 THIS  PARAGRAPH  SHALL BE AUGMENTED BY AN AMOUNT EQUAL TO THE PRODUCT OF
 SUCH AMOUNT AND THE UNDERPAYMENT RATE OF  INTEREST  (WITHOUT  REGARD  TO
 COMPOUNDING),  SET  BY  THE  COMMISSIONER  PURSUANT TO SUBSECTION (E) OF
 SECTION ONE THOUSAND NINETY-SIX OF THIS CHAPTER, IN EFFECT ON  THE  LAST
 DAY OF THE TAXABLE YEAR.
   (F)  IF,  AS OF THE CLOSE OF THE TAXABLE YEAR, THERE IS A NET INCREASE
 WITH RESPECT TO THE TAXPAYER IN THE AMOUNT OF  NONQUALIFIED  NONRECOURSE
 FINANCING (WITHIN THE MEANING OF SECTION 46(C)(8) OF THE INTERNAL REVEN-

 S. 1680                            66
 
 UE  CODE)  WITH RESPECT TO ANY PROPERTY WITH RESPECT TO WHICH THE CREDIT
 UNDER THIS SUBSECTION WAS LIMITED  BASED  ON  ATTRIBUTABLE  NONQUALIFIED
 NONRECOURSE  FINANCING,  THEN  AN  AMOUNT  EQUAL TO THE DECREASE IN SUCH
 CREDIT  WHICH  WOULD  HAVE RESULTED FROM REDUCING, BY THE AMOUNT OF SUCH
 NET INCREASE, THE COST OR OTHER BASIS TAKEN INTO ACCOUNT WITH RESPECT TO
 SUCH PROPERTY MUST BE ADDED BACK IN SUCH TAXABLE  YEAR.  THE  AMOUNT  OF
 NONQUALIFIED  NONRECOURSE FINANCING SHALL NOT BE TREATED AS INCREASED BY
 REASON OF A TRANSFER OF (OR AGREEMENT TO TRANSFER) ANY  EVIDENCE  OF  AN
 INDEBTEDNESS IF SUCH TRANSFER OCCURS (OR SUCH AGREEMENT IS ENTERED INTO)
 MORE THAN ONE YEAR AFTER THE DATE SUCH INDEBTEDNESS WAS INCURRED.
   (8)  FOR PURPOSES OF PARAGRAPH FIVE OF THIS SUBSECTION, A NEW BUSINESS
 SHALL INCLUDE ANY CORPORATION, EXCEPT A CORPORATION WHICH:
   (A) OVER FIFTY PERCENT OF THE NUMBER OF SHARES OF STOCK ENTITLING  THE
 HOLDERS  THEREOF  TO  VOTE  FOR THE ELECTION OF DIRECTORS OR TRUSTEES IS
 OWNED OR CONTROLLED,  EITHER  DIRECTLY  OR  INDIRECTLY,  BY  A  TAXPAYER
 SUBJECT TO TAX UNDER THIS ARTICLE; SECTION ONE HUNDRED EIGHTY-THREE, ONE
 HUNDRED  EIGHTY-FOUR OR ONE HUNDRED EIGHTY-FIVE OF ARTICLE NINE; ARTICLE
 NINE-A OR ARTICLE THIRTY-THREE OF THIS CHAPTER; OR
   (B) IS SUBSTANTIALLY SIMILAR IN OPERATION AND IN OWNERSHIP TO A  BUSI-
 NESS  ENTITY  (OR  ENTITIES)  TAXABLE, OR PREVIOUSLY TAXABLE, UNDER THIS
 ARTICLE; SECTION ONE HUNDRED EIGHTY-THREE, ONE  HUNDRED  EIGHTY-FOUR  OR
 ONE HUNDRED EIGHTY-FIVE OF ARTICLE NINE; ARTICLE NINE-A OR ARTICLE THIR-
 TY-THREE  OF THIS CHAPTER; ARTICLE TWENTY-THREE OF THIS CHAPTER OR WHICH
 WOULD HAVE BEEN SUBJECT TO TAX UNDER SUCH ARTICLE TWENTY-THREE (AS  SUCH
 ARTICLE  WAS IN EFFECT ON JANUARY FIRST, NINETEEN HUNDRED EIGHTY) OR THE
 INCOME (OR LOSSES) OF WHICH IS (OR WAS) INCLUDABLE UNDER  ARTICLE  TWEN-
 TY-TWO  OF THIS CHAPTER WHEREBY THE INTENT AND PURPOSE OF THIS PARAGRAPH
 AND PARAGRAPH FIVE OF THIS SUBSECTION WITH RESPECT TO REFUNDING OF CRED-
 IT TO NEW BUSINESS WOULD BE EVADED; OR
   (C) HAS BEEN SUBJECT TO TAX UNDER THIS  ARTICLE  FOR  MORE  THAN  FIVE
 TAXABLE YEARS (EXCLUDING SHORT TAXABLE YEARS).
   (9)(A)(I)  IF  A  TAXPAYER  IS  REQUIRED  BY  PARAGRAPH  SEVEN OF THIS
 SUBSECTION TO ADD BACK A PORTION OF THE CREDIT  TAKEN  BECAUSE  PROPERTY
 WAS DESTROYED OR CEASED TO BE IN QUALIFIED USE AS A DIRECT RESULT OF THE
 SEPTEMBER  ELEVENTH,  TWO  THOUSAND ONE TERRORIST ATTACKS, SUCH TAXPAYER
 MAY ELECT TO DEFER THE AMOUNT TO BE RECAPTURED FOR ALL SUCH PROPERTY  TO
 THE  TAXABLE  YEAR  NEXT  SUCCEEDING  THE  TAXABLE  YEAR  IN  WHICH  THE
 DESTRUCTION OR CESSATION OF QUALIFIED USE OCCURRED. THE TAXABLE YEAR  IN
 WHICH  THE  DESTRUCTION  OR CESSATION OF QUALIFIED USE OCCURRED SHALL BE
 HEREINAFTER REFERRED TO AS THE "RECAPTURE EVENT TAXABLE  YEAR".  IF  THE
 TAXPAYER'S  TOTAL  EMPLOYMENT NUMBER IN THE STATE ON THE LAST DAY OF THE
 TAXABLE YEAR NEXT SUCCEEDING THE  RECAPTURE  EVENT  TAXABLE  YEAR  IS  A
 SIGNIFICANT PERCENTAGE OF THE TAXPAYER'S AVERAGE TOTAL EMPLOYMENT NUMBER
 IN THE STATE FOR THE TAXPAYER'S RECAPTURE EVENT TAXABLE YEAR AND THE TWO
 TAXABLE  YEARS  IMMEDIATELY  PRECEDING THE RECAPTURE EVENT TAXABLE YEAR,
 THEN THE TAXPAYER SHALL NOT BE REQUIRED TO  RECAPTURE  ANY  CREDIT  WITH
 RESPECT  TO  SUCH PROPERTY. IF THE TAXPAYER'S TOTAL EMPLOYMENT NUMBER IN
 THE STATE ON THE LAST DAY OF THE TAXABLE YEAR NEXT SUCCEEDING THE RECAP-
 TURE EVENT TAXABLE YEAR IS NOT A SIGNIFICANT PERCENTAGE OF  THE  TAXPAY-
 ER'S  AVERAGE  TOTAL  EMPLOYMENT  NUMBER IN THE STATE FOR THE TAXPAYER'S
 RECAPTURE EVENT TAXABLE YEAR  AND  THE  TWO  TAXABLE  YEARS  IMMEDIATELY
 PRECEDING  THE  RECAPTURE  EVENT  TAXABLE  YEAR,  THE  TAXPAYER SHALL BE
 REQUIRED TO RECAPTURE  THE  PORTION  OF  THE  CREDIT  TAKEN  UNDER  THIS
 SUBSECTION,  AS  REQUIRED BY PARAGRAPH SEVEN OF THIS SUBSECTION, FOR ALL
 OF ITS PROPERTY DESTROYED OR WHICH CEASED TO BE IN QUALIFIED  USE  AS  A
 DIRECT  RESULT  OF  THE  SEPTEMBER  ELEVENTH, TWO THOUSAND ONE TERRORIST

 S. 1680                            67

 ATTACKS. THE AMOUNT REQUIRED TO BE  RECAPTURED  SHALL  BE  AUGMENTED  AS
 REQUIRED  PURSUANT  TO  SUBPARAGRAPH  (E)  OF  PARAGRAPH  SEVEN  OF THIS
 SUBSECTION BY USING AN INTEREST RATE EQUAL TO  TWO  TIMES  THE  RATE  OF
 INTEREST SPECIFIED IN SUCH SUBPARAGRAPH SEVEN APPLICABLE FOR THE TAXABLE
 YEAR IN WHICH THE RECAPTURE OCCURS.
   (II)  THE TAXPAYER'S TOTAL EMPLOYMENT NUMBER SHALL INCLUDE ALL EMPLOY-
 EES OF THE TAXPAYER EMPLOYED FULL-TIME BY THE TAXPAYER IN THE STATE. THE
 AVERAGE TOTAL EMPLOYMENT NUMBER FOR THE RECAPTURE EVENT TAXABLE YEAR AND
 THE TWO TAXABLE YEARS IMMEDIATELY PRECEDING THE RECAPTURE EVENT  TAXABLE
 YEAR  SHALL  BE  COMPUTED BY DETERMINING THE TAXPAYER'S TOTAL EMPLOYMENT
 NUMBER 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 YEARS, ADDING TOGETHER THE NUMBER OF  SUCH  INDI-
 VIDUALS  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 YEARS. HOWEVER, IN THE CASE OF THE TAXABLE YEAR WHICH
 INCLUDED SEPTEMBER ELEVENTH, TWO THOUSAND ONE, THE AVERAGE TOTAL EMPLOY-
 MENT NUMBER FOR SUCH TAXABLE YEAR SHALL BE DETERMINED BY USING THE TOTAL
 EMPLOYMENT  NUMBER  ON  SEPTEMBER  FIRST,  TWO  THOUSAND  ONE IN LIEU OF
 SEPTEMBER THIRTIETH, TWO THOUSAND ONE AND, IF SUCH TAXABLE YEAR INCLUDED
 DECEMBER THIRTY-FIRST, TWO THOUSAND ONE, BY EXCLUDING THE TOTAL  EMPLOY-
 MENT NUMBER ON DECEMBER THIRTY-FIRST, TWO THOUSAND ONE.
   (B)  IN  LIEU  OF  SUBPARAGRAPH  (A) OF THIS PARAGRAPH, A TAXPAYER MAY
 ELECT  TO  RECAPTURE  THE  PORTION  OF  THE  CREDIT  TAKEN  UNDER   THIS
 SUBSECTION,  AS  REQUIRED BY PARAGRAPH SEVEN OF THIS SUBSECTION, FOR ALL
 OF ITS PROPERTY DESTROYED OR WHICH CEASED TO BE IN QUALIFIED  USE  AS  A
 DIRECT  RESULT  OF  THE  SEPTEMBER  ELEVENTH, TWO THOUSAND ONE TERRORIST
 ATTACKS, IN THE TAXABLE YEAR IN WHICH THE DESTRUCTION  OR  CESSATION  OF
 QUALIFIED USE OCCURRED. IF THE TAXPAYER MAKES SUCH ELECTION AND ACQUIRES
 PROPERTY  (HEREINAFTER REFERRED TO AS "REPLACEMENT PROPERTY") TO REPLACE
 ANY PROPERTY DESTROYED AS A DIRECT RESULT OF THE SEPTEMBER ELEVENTH, TWO
 THOUSAND ONE TERRORIST ATTACKS (REGARDLESS OF  WHEN  SUCH  PROPERTY  WAS
 PLACED  IN  SERVICE  AND  WHETHER  A CREDIT WAS CLAIMED ON THAT PROPERTY
 PURSUANT TO THIS SUBSECTION), AND SUCH REPLACEMENT PROPERTY  IS  SIMILAR
 OR  RELATED IN SERVICE OR USE TO SUCH DESTROYED PROPERTY, THE INVESTMENT
 CREDIT BASE OF THE REPLACEMENT  PROPERTY  SHALL  BE  DETERMINED  WITHOUT
 REGARD  TO  ANY BASIS REDUCTION REQUIRED PURSUANT TO SECTION 1033 OF THE
 INTERNAL REVENUE CODE.
   (C) THE ELECTION MADE BY THE TAXPAYER UNDER SUBPARAGRAPH (A) OR (B) OF
 THIS PARAGRAPH SHALL BE MADE IN THE MANNER AND FORM  PRESCRIBED  BY  THE
 COMMISSIONER.
   (D) A TAXPAYER, OVER FIFTY PERCENT OF WHOSE EMPLOYEES DIED AS A DIRECT
 RESULT  OF  THE  SEPTEMBER ELEVENTH, TWO THOUSAND ONE TERRORIST ATTACKS,
 MAY MAKE THE ELECTION PROVIDED FOR IN SUBPARAGRAPH  (A)  OF  THIS  PARA-
 GRAPH, AND SHALL NOT BE REQUIRED TO RECAPTURE ANY CREDIT WITH RESPECT TO
 PROPERTY WHICH WAS DESTROYED OR WHICH CEASED TO BE IN QUALIFIED USE AS A
 DIRECT  RESULT  OF  SUCH ATTACKS, WHETHER OR NOT IT MEETS THE EMPLOYMENT
 TEST SPECIFIED IN CLAUSE (I) OF SUBPARAGRAPH (A) OF THIS PARAGRAPH.
   (J) CREDIT FOR PURCHASE OF  AN  AUTOMATED  EXTERNAL  DEFIBRILLATOR.  A
 TAXPAYER  SHALL BE ALLOWED A CREDIT AS HEREINAFTER PROVIDED, AGAINST THE
 TAX IMPOSED BY THIS ARTICLE FOR THE PURCHASE, OTHER THAN FOR RESALE,  OF
 AN  AUTOMATED EXTERNAL DEFIBRILLATOR, AS SUCH TERM IS DEFINED IN SECTION
 THREE THOUSAND-B OF THE PUBLIC HEALTH LAW.  THE  AMOUNT  OF  THE  CREDIT
 SHALL  BE  THE COST TO THE TAXPAYER OF AUTOMATED EXTERNAL DEFIBRILLATORS
 PURCHASED DURING THE TAXABLE  YEAR,  SUCH  CREDIT  NOT  TO  EXCEED  FIVE
 HUNDRED  DOLLARS WITH RESPECT TO EACH UNIT PURCHASED. THE CREDIT ALLOWED

 S. 1680                            68
 
 UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX  DUE
 FOR  SUCH  YEAR  TO LESS THAN THE MINIMUM TAX FIXED BY SUBSECTION (B) OF
 SECTION FOURTEEN HUNDRED FIFTY-FIVE OF THIS ARTICLE.
   (K)  (1)  A TAXPAYER SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED
 BY THIS ARTICLE EQUAL TO TWENTY PERCENT OF THE PREMIUM PAID  DURING  THE
 TAXABLE  YEAR FOR LONG-TERM CARE INSURANCE. IN ORDER TO QUALIFY FOR SUCH
 CREDIT, THE TAXPAYER'S PREMIUM PAYMENT MUST BE FOR THE  PURCHASE  OF  OR
 FOR  CONTINUING  COVERAGE  UNDER  A LONG-TERM CARE INSURANCE POLICY THAT
 QUALIFIES FOR SUCH CREDIT PURSUANT TO SECTION ONE THOUSAND  ONE  HUNDRED
 SEVENTEEN OF THE INSURANCE LAW.
   (2)  IN  NO EVENT SHALL THE CREDIT HEREIN PROVIDED FOR, AND CARRYOVERS
 OF SUCH CREDIT, BE ALLOWED IN AN AMOUNT WHICH WILL REDUCE THE TAX  PAYA-
 BLE  TO LESS THAN THE DOLLAR AMOUNT FIXED AS A MINIMUM TAX BY SUBSECTION
 (B) OF SECTION FOURTEEN HUNDRED FIFTY-FIVE OF THIS ARTICLE. IF, HOWEVER,
 THE AMOUNT OF CREDIT OR CARRYOVERS OF SUCH CREDIT,  OR  BOTH,  ALLOWABLE
 UNDER  THIS  SUBSECTION  FOR  ANY  TAXABLE  YEAR REDUCES THE TAX TO SUCH
 AMOUNT, ANY AMOUNT OF CREDIT OR  CARRYOVERS  OF  SUCH  CREDIT  THUS  NOT
 DEDUCTIBLE  IN  SUCH  TAXABLE  YEAR MAY BE CARRIED OVER TO THE FOLLOWING
 YEAR OR YEARS AND MAY BE DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH  YEAR
 OR YEARS.
   (L)  LOW-INCOME  HOUSING  CREDIT.  (1) ALLOWANCE OF CREDIT. A TAXPAYER
 SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED BY THIS  ARTICLE  WITH
 RESPECT  TO  THE OWNERSHIP OF ELIGIBLE LOW-INCOME BUILDINGS, COMPUTED AS
 PROVIDED IN SECTION EIGHTEEN OF THIS CHAPTER.
   (2) APPLICATION OF CREDIT. THE CREDIT AND CARRYOVERS  OF  SUCH  CREDIT
 ALLOWED  UNDER  THIS  SUBSECTION  FOR ANY TAXABLE YEAR SHALL NOT, IN THE
 AGGREGATE, REDUCE THE TAX DUE FOR SUCH YEAR TO LESS THAN THE MINIMUM TAX
 FIXED BY SUBSECTION (B) OF SECTION FOURTEEN HUNDRED FIFTY-FIVE  OF  THIS
 ARTICLE.  HOWEVER, IF THE AMOUNT OF CREDIT OR CARRYOVERS OF SUCH CREDIT,
 OR BOTH, ALLOWED UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR REDUCES  THE
 TAX  TO  SUCH  AMOUNT,  THEN  ANY AMOUNT OF CREDIT OR CARRYOVERS OF SUCH
 CREDIT THUS NOT DEDUCTIBLE IN SUCH TAXABLE YEAR MAY BE CARRIED  OVER  TO
 THE  FOLLOWING YEAR OR YEARS AND MAY BE DEDUCTED FROM THE TAXPAYER'S TAX
 FOR SUCH YEAR OR YEARS.
   (3) CREDIT RECAPTURE. FOR PROVISIONS REQUIRING  RECAPTURE  OF  CREDIT,
 SEE SUBDIVISION (B) OF SECTION EIGHTEEN OF THIS CHAPTER.
   (M)  GREEN  BUILDING CREDIT. (1) ALLOWANCE OF CREDIT. A TAXPAYER SHALL
 BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED IN SECTION  NINETEEN  OF
 THIS CHAPTER, AGAINST THE TAX IMPOSED BY THIS ARTICLE.
   (2)  CARRYOVER. THE CREDIT AND CARRYOVERS OF SUCH CREDIT ALLOWED UNDER
 THIS SUBSECTION FOR ANY TAXABLE YEAR SHALL NOT, IN THE AGGREGATE, REDUCE
 THE TAX DUE FOR SUCH  YEAR  TO  LESS  THAN  THE  MINIMUM  TAX  FIXED  BY
 SUBSECTION  (B)  OF SECTION FOURTEEN HUNDRED FIFTY-FIVE OF THIS ARTICLE.
 HOWEVER, IF THE AMOUNT OF CREDIT OR CARRYOVERS OF SUCH CREDIT, OR  BOTH,
 ALLOWED  UNDER  THIS  SUBSECTION FOR ANY TAXABLE YEAR REDUCES THE TAX TO
 SUCH AMOUNT, THEN ANY AMOUNT OF CREDIT OR CARRYOVERS OF SUCH CREDIT THUS
 NOT DEDUCTIBLE IN SUCH TAXABLE YEAR MAY BE CARRIED OVER TO THE FOLLOWING
 YEAR OR YEARS AND MAY BE DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH  YEAR
 OR YEARS.
   (N) CREDIT FOR TRANSPORTATION IMPROVEMENT CONTRIBUTIONS. (1) ALLOWANCE
 OF  CREDIT.  A  TAXPAYER  SHALL  BE  ALLOWED A CREDIT, TO BE COMPUTED AS
 PROVIDED IN SECTION TWENTY OF THIS CHAPTER, AGAINST THE TAX  IMPOSED  BY
 THIS ARTICLE.
   (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
 THAN THE MINIMUM TAX FIXED BY SUBSECTION (B) OF SECTION FOURTEEN HUNDRED

 S. 1680                            69

 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  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.
   (3)  CREDIT  RECAPTURE.  FOR PROVISIONS REQUIRING RECAPTURE OF CREDIT,
 SEE SUBDIVISION (C) OF SECTION TWENTY OF THIS CHAPTER.
   (O) QEZE CREDIT FOR REAL PROPERTY TAXES. (1) ALLOWANCE  OF  CREDIT.  A
 TAXPAYER  WHICH IS A QUALIFIED EMPIRE ZONE ENTERPRISE SHALL BE ALLOWED A
 CREDIT FOR ELIGIBLE REAL PROPERTY TAXES, TO BE COMPUTED AS  PROVIDED  IN
 SECTION  FIFTEEN  OF THIS CHAPTER, AGAINST THE TAX IMPOSED BY THIS ARTI-
 CLE.
   (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
 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  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.
   (P)  QEZE  TAX  REDUCTION  CREDIT. (1) ALLOWANCE OF CREDIT. A TAXPAYER
 WHICH IS A QUALIFIED EMPIRE ZONE ENTERPRISE SHALL BE ALLOWED A QEZE  TAX
 REDUCTION  CREDIT, TO BE COMPUTED AS PROVIDED IN SECTION SIXTEEN OF THIS
 CHAPTER, AGAINST THE TAX IMPOSED BY THIS ARTICLE.
   (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
 THAN THE MINIMUM TAX FIXED BY  PARAGRAPH  THREE  OF  SUBSECTION  (B)  OF
 SECTION FOURTEEN HUNDRED FIFTY-FIVE OF THIS ARTICLE.
   (Q)  BROWNFIELD  REDEVELOPMENT  TAX CREDIT. (1) ALLOWANCE OF CREDIT. A
 TAXPAYER SHALL BE ALLOWED A  CREDIT,  TO  BE  COMPUTED  AS  PROVIDED  IN
 SECTION  TWENTY-ONE  OF  THIS  CHAPTER,  AGAINST THE TAX IMPOSED BY THIS
 ARTICLE.
   (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
 THAN THE MINIMUM TAX FIXED BY  PARAGRAPH  THREE  OF  SUBSECTION  (B)  OF
 SECTION  FOURTEEN  HUNDRED  FIFTY-FIVE  OF THIS ARTICLE. HOWEVER, IF THE
 AMOUNT OF CREDITS ALLOWED UNDER THIS SUBSECTION  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.
   (R) REMEDIATED BROWNFIELD CREDIT FOR REAL PROPERTY TAXES FOR QUALIFIED
 SITES.    (1)  ALLOWANCE OF CREDIT. A TAXPAYER WHICH IS A DEVELOPER OF A
 QUALIFIED SITE SHALL BE ALLOWED A  CREDIT  FOR  ELIGIBLE  REAL  PROPERTY
 TAXES,  TO BE COMPUTED AS PROVIDED IN SUBDIVISION (B) OF SECTION TWENTY-
 TWO OF THIS CHAPTER, AGAINST  THE  TAX  IMPOSED  BY  THIS  ARTICLE.  FOR
 PURPOSES  OF THIS SUBSECTION, THE TERMS "QUALIFIED SITE" AND "DEVELOPER"

 S. 1680                            70
 
 SHALL HAVE THE SAME MEANING AS SET FORTH IN PARAGRAPHS  TWO  AND  THREE,
 RESPECTIVELY, OF SUBDIVISION (A) OF SECTION TWENTY-TWO OF THIS CHAPTER.
   (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
 THAN  THE  MINIMUM  TAX  FIXED  BY  PARAGRAPH THREE OF 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, 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.
   (S) ENVIRONMENTAL REMEDIATION INSURANCE CREDIT. (1) ALLOWANCE OF CRED-
 IT. A TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED  IN
 SECTION  TWENTY-THREE  OF  THIS CHAPTER, AGAINST THE TAX IMPOSED BY THIS
 ARTICLE.
   (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  THREE  OF  SUBSECTION  (B)  OF
 SECTION  FOURTEEN  HUNDRED  FIFTY-FIVE  OF THIS ARTICLE. HOWEVER, IF THE
 AMOUNT OF CREDITS 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.
   (T)  SECURITY TRAINING TAX CREDIT. (1) ALLOWANCE OF CREDIT. A TAXPAYER
 SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED IN  SECTION  TWEN-
 TY-SIX OF THIS CHAPTER, AGAINST THE TAX IMPOSED BY THIS ARTICLE.
   (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
 THAN  THE  MINIMUM  TAX  FIXED  BY  PARAGRAPH THREE OF SUBSECTION (B) OF
 SECTION FOURTEEN HUNDRED FIFTY-FIVE OF THIS  ARTICLE.  HOWEVER,  IF  THE
 AMOUNT  OF  CREDITS  ALLOWED  UNDER THIS SUBSECTION 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.
   (U) CREDIT FOR FUEL CELL ELECTRIC GENERATING  EQUIPMENT  EXPENDITURES.
 (1)  ALLOWANCE  OF  CREDIT.  FOR  TAXABLE YEARS BEGINNING BEFORE JANUARY
 FIRST, TWO THOUSAND NINE, A TAXPAYER SHALL BE ALLOWED A  CREDIT  AGAINST
 THE  TAX IMPOSED BY THIS ARTICLE, EQUAL TO ITS QUALIFIED FUEL CELL ELEC-
 TRIC GENERATING EQUIPMENT EXPENDITURES. THIS CREDIT SHALL NOT EXCEED ONE
 THOUSAND FIVE HUNDRED DOLLARS PER GENERATING UNIT WITH  RESPECT  TO  ANY
 TAXABLE  YEAR.  THE  CREDIT  PROVIDED  FOR  IN  THIS SUBSECTION SHALL BE
 ALLOWED WITH RESPECT TO THE TAXABLE YEAR IN WHICH THE FUEL CELL ELECTRIC
 GENERATING EQUIPMENT IS PLACED IN SERVICE.
   (2) QUALIFIED FUEL CELL ELECTRIC  GENERATING  EQUIPMENT  EXPENDITURES.
 (A)  QUALIFIED  FUEL CELL ELECTRIC GENERATING EQUIPMENT EXPENDITURES ARE
 THE COSTS, INCURRED ON OR AFTER JULY FIRST, TWO THOUSAND  FIVE,  ASSOCI-
 ATED WITH THE PURCHASE OF ON-SITE ELECTRICITY GENERATION UNITS UTILIZING
 PROTON EXCHANGE MEMBRANE FUEL CELLS, PROVIDING A RATED BASELOAD CAPACITY

 S. 1680                            71
 
 OF  NO  LESS THAN ONE KILOWATT AND NO MORE THAN ONE HUNDRED KILOWATTS OF
 ELECTRICITY, WHICH ARE LOCATED IN THIS STATE AT THE TIME  THE  QUALIFIED
 FUEL CELL ELECTRIC GENERATING EQUIPMENT IS PLACED IN SERVICE.
   (B)  QUALIFIED  FUEL  CELL  ELECTRIC GENERATING EQUIPMENT EXPENDITURES
 SHALL ALSO INCLUDE COSTS, INCURRED ON OR AFTER JULY FIRST, TWO  THOUSAND
 FIVE,  FOR  MATERIALS,  LABOR  FOR  ON-SITE  PREPARATION,  ASSEMBLY  AND
 ORIGINAL INSTALLATION, ENGINEERING SERVICES, DESIGNS AND PLANS  DIRECTLY
 RELATED TO CONSTRUCTION OR INSTALLATION AND UTILITY COMPLIANCE COSTS.
   (C)  SUCH  QUALIFIED  EXPENDITURES SHALL NOT INCLUDE INTEREST OR OTHER
 FINANCE CHARGES.
   (D) THE AMOUNT OF ANY FEDERAL, STATE OR LOCAL GRANT  RECEIVED  BY  THE
 TAXPAYER,  WHICH  WAS  USED  FOR THE PURPOSE AND/OR INSTALLATION OF SUCH
 EQUIPMENT AND WHICH WAS NOT INCLUDED IN THE FEDERAL GROSS INCOME OF  THE
 TAXPAYER, SHALL NOT BE INCLUDED IN THE AMOUNT OF SUCH QUALIFIED EXPENDI-
 TURES.
   (3)  APPLICATION  OF  CREDIT. THE CREDIT ALLOWED UNDER THIS SUBSECTION
 FOR ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO  LESS
 THAN  THE  MINIMUM  TAX  FIXED  BY  PARAGRAPH THREE OF 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, ANY AMOUNT OF CREDIT THUS NOT DEDUCTIBLE
 IN SUCH TAXABLE YEAR MAY BE CARRIED OVER TO THE FOLLOWING YEAR OR  YEARS
 AND MAY BE DEDUCTED FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS.
   (V)  EXCELSIOR  JOBS  PROGRAM  TAX  CREDIT. (1) ALLOWANCE OF CREDIT. A
 TAXPAYER WILL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED IN SECTION
 THIRTY-ONE OF THIS CHAPTER, AGAINST THE TAX IMPOSED BY THIS ARTICLE.
   (2) THE CREDIT ALLOWED UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR WILL
 NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS THAN THE MINIMUM TAX  FIXED
 BY  PARAGRAPH THREE OF 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, ANY
 AMOUNT OF CREDIT THUS NOT DEDUCTIBLE IN SUCH TAXABLE YEAR WILL BE TREAT-
 ED  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 THOU-
 SAND  EIGHTY-EIGHT  OF THIS CHAPTER NOTWITHSTANDING, NO INTEREST WILL BE
 PAID THEREON.
   (W) CREDIT FOR REHABILITATION OF  HISTORIC  PROPERTIES.  (1)  (A)  FOR
 TAXABLE  YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND TEN AND
 BEFORE JANUARY FIRST, TWO  THOUSAND  TWENTY-TWO,  A  TAXPAYER  SHALL  BE
 ALLOWED  A  CREDIT  AS  HEREINAFTER PROVIDED, AGAINST THE TAX IMPOSED BY
 THIS ARTICLE, IN AN AMOUNT EQUAL TO ONE HUNDRED PERCENT OF THE AMOUNT OF
 CREDIT ALLOWED THE TAXPAYER WITH RESPECT TO A CERTIFIED HISTORIC  STRUC-
 TURE  UNDER  SUBSECTION  (A)(2)  OF  SECTION  47 OF THE FEDERAL INTERNAL
 REVENUE CODE WITH RESPECT TO  A  CERTIFIED  HISTORIC  STRUCTURE  LOCATED
 WITHIN  THE  STATE.  PROVIDED, HOWEVER, THE CREDIT SHALL NOT EXCEED FIVE
 MILLION DOLLARS. FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY  FIRST,
 TWO THOUSAND TWENTY-TWO, A TAXPAYER SHALL BE ALLOWED A CREDIT AS HEREIN-
 AFTER  PROVIDED,  AGAINST  THE TAX IMPOSED BY THIS ARTICLE, IN AN AMOUNT
 EQUAL TO THIRTY PERCENT OF THE AMOUNT OF  CREDIT  ALLOWED  THE  TAXPAYER
 WITH  RESPECT  TO A CERTIFIED HISTORIC STRUCTURE UNDER SUBSECTION (A)(2)
 OF SECTION 47 OF THE FEDERAL INTERNAL REVENUE CODE  WITH  RESPECT  TO  A
 CERTIFIED  HISTORIC STRUCTURE LOCATED WITHIN THE STATE. PROVIDED, HOWEV-
 ER, THE CREDIT SHALL NOT EXCEED ONE HUNDRED THOUSAND DOLLARS.
   (B) IF THE TAXPAYER IS A PARTNER IN A PARTNERSHIP OR A SHAREHOLDER  OF
 A  NEW  YORK S CORPORATION, THEN THE CREDIT CAPS IMPOSED IN SUBPARAGRAPH

 S. 1680                            72
 
 (A) OF THIS PARAGRAPH SHALL BE APPLIED AT THE ENTITY LEVEL, SO THAT  THE
 AGGREGATE  CREDIT  ALLOWED  TO  ALL THE PARTNERS OR SHAREHOLDERS OF EACH
 SUCH ENTITY IN THE TAXABLE YEAR DOES NOT EXCEED THE CREDIT CAP  THAT  IS
 APPLICABLE IN THAT TAXABLE YEAR.
   (2)  TAX  CREDITS ALLOWED PURSUANT TO THIS SUBSECTION SHALL BE ALLOWED
 IN THE TAXABLE YEAR THAT  THE  QUALIFIED  REHABILITATION  IS  PLACED  IN
 SERVICE UNDER SECTION 167 OF THE FEDERAL INTERNAL REVENUE CODE.
   (3)  IF  THE CREDIT ALLOWED THE TAXPAYER PURSUANT TO SECTION 47 OF THE
 INTERNAL REVENUE CODE WITH RESPECT  TO  A  QUALIFIED  REHABILITATION  IS
 RECAPTURED  PURSUANT  TO  SUBSECTION  (A)  OF SECTION 50 OF THE INTERNAL
 REVENUE CODE, A PORTION OF THE CREDIT ALLOWED UNDER THIS SUBSECTION MUST
 BE ADDED BACK IN THE SAME TAXABLE YEAR AND IN THE SAME PROPORTION AS THE
 FEDERAL RECAPTURE.
   (4) THE CREDIT ALLOWED UNDER THIS  SUBSECTION  FOR  ANY  TAXABLE  YEAR
 SHALL NOT REDUCE THE TAX TO LESS THAN THE DOLLAR AMOUNT FIXED AS A MINI-
 MUM TAX 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, ANY AMOUNT OF CRED-
 IT THUS NOT DEDUCTIBLE IN SUCH TAXABLE YEAR SHALL BE TREATED AS AN OVER-
 PAYMENT 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 EIGHT-
 Y-EIGHT OF THIS CHAPTER NOTWITHSTANDING, NO INTEREST SHALL BE PAID THER-
 EON.
   (5)  TO BE ELIGIBLE FOR THE CREDIT ALLOWABLE UNDER THIS SUBSECTION THE
 REHABILITATION PROJECT SHALL BE IN WHOLE OR IN  PART  LOCATED  WITHIN  A
 CENSUS  TRACT  WHICH  IS  IDENTIFIED  AS  BEING  AT OR BELOW ONE HUNDRED
 PERCENT OF THE STATE MEDIAN FAMILY INCOME AS CALCULATED  AS  OF  JANUARY
 FIRST  OF  EACH  YEAR  USING THE MOST RECENT FIVE YEAR ESTIMATE FROM THE
 AMERICAN COMMUNITY SURVEY PUBLISHED BY THE UNITED STATES CENSUS BUREAU.
   (X) TEMPORARY DEFERRAL NONREFUNDABLE PAYOUT CREDIT. (1)  ALLOWANCE  OF
 CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED
 IN  SUBDIVISION  ONE OF SECTION THIRTY-FOUR OF THIS CHAPTER, AGAINST THE
 TAX IMPOSED BY THIS ARTICLE.
   (2) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER  THIS  SUBDIVISION
 FOR  ANY TAXABLE YEAR SHALL NOT REDUCE THE TAX DUE FOR THAT YEAR TO LESS
 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  SUBDIVISION  FOR  ANY  TAXABLE YEAR REDUCES THE TAX TO SUCH
 AMOUNT, ANY AMOUNT OF CREDIT THUS NOT DEDUCTIBLE IN  SUCH  TAXABLE  YEAR
 MAY  BE  CARRIED OVER TO THE FOLLOWING YEAR OR YEARS AND MAY BE DEDUCTED
 FROM THE TAXPAYER'S TAX FOR SUCH YEAR OR YEARS.
   (Y) TEMPORARY DEFERRAL REFUNDABLE  PAYOUT  CREDIT.  (1)  ALLOWANCE  OF
 CREDIT. A TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED
 IN  SUBDIVISION  TWO OF SECTION THIRTY-FOUR OF THIS CHAPTER, AGAINST THE
 TAX IMPOSED BY THIS ARTICLE.
   (2) APPLICATION OF CREDIT. IN NO EVENT SHALL  THE  CREDIT  UNDER  THIS
 SECTION  BE  ALLOWED IN AN AMOUNT WHICH WILL REDUCE THE TAX TO LESS THAN
 THE MINIMUM TAX FIXED BY SUBSECTION  (B)  OF  SECTION  FOURTEEN  HUNDRED
 FIFTY-FIVE  OF  THIS  ARTICLE. IF, HOWEVER, THE AMOUNT OF CREDIT ALLOWED
 UNDER THIS SECTION FOR ANY TAXABLE YEAR REDUCES THE TAX TO SUCH  AMOUNT,
 ANY AMOUNT OF CREDIT NOT DEDUCTIBLE IN SUCH TAXABLE YEAR SHALL BE TREAT-
 ED  AS  AN  OVERPAYMENT  OF  TAX  TO  BE REFUNDED IN ACCORDANCE WITH THE
 PROVISIONS OF SECTION ONE THOUSAND EIGHTY-SIX OF THIS CHAPTER,  PROVIDED
 HOWEVER, THAT NO INTEREST SHALL BE PAID THEREON.

 S. 1680                            73
 
   (Z)  ECONOMIC  TRANSFORMATION  AND  FACILITY REDEVELOPMENT PROGRAM TAX
 CREDIT. (1) ALLOWANCE OF CREDIT. A TAXPAYER SHALL BE ALLOWED  A  CREDIT,
 TO  BE  COMPUTED  AS  PROVIDED  IN  SECTION THIRTY-FIVE OF THIS CHAPTER,
 AGAINST THE TAX IMPOSED BY THIS ARTICLE.
   (2) THE CREDIT ALLOWED UNDER THIS SUBSECTION FOR ANY TAXABLE YEAR WILL
 NOT  REDUCE THE TAX DUE FOR SUCH YEAR TO LESS THAN THE MINIMUM TAX FIXED
 BY PARAGRAPH THREE OF 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, ANY
 AMOUNT OF CREDIT THUS NOT DEDUCTIBLE IN SUCH TAXABLE YEAR WILL BE TREAT-
 ED 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 THOU-
 SAND EIGHTY-EIGHT OF THIS CHAPTER NOTWITHSTANDING, NO INTEREST  WILL  BE
 PAID THEREON.
   (AA)  EMPIRE  STATE  JOBS  RETENTION  PROGRAM CREDIT. (1) ALLOWANCE OF
 CREDIT.   A TAXPAYER SHALL BE  ALLOWED  A  CREDIT,  TO  BE  COMPUTED  AS
 PROVIDED  IN  SECTION  THIRTY-SIX  OF  THIS  CHAPTER,  AGAINST THE TAXES
 IMPOSED BY THIS ARTICLE.
   (2) APPLICATION OF CREDIT. THE CREDIT ALLOWED  UNDER  THIS  SUBSECTION
 FOR  ANY  TAXABLE YEAR WILL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS
 THAN THE MINIMUM TAX FIXED BY THIS ARTICLE. HOWEVER, IF  THE  AMOUNT  OF
 CREDIT  ALLOWED  UNDER  THIS SUBSECTION FOR ANY TAXABLE YEAR REDUCES THE
 TAX TO SUCH AMOUNT, ANY AMOUNT OF CREDIT THUS  NOT  DEDUCTIBLE  IN  SUCH
 TAXABLE  YEAR WILL 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 WILL BE PAID THEREON.
   (BB)  MINIMUM  WAGE  REIMBURSEMENT  CREDIT. (1) ALLOWANCE OF CREDIT. A
 TAXPAYER SHALL BE ALLOWED A CREDIT, TO BE  COMPUTED  AS  PROVIDED  UNDER
 SECTION  THIRTY-EIGHT  OF  THIS CHAPTER, AGAINST THE TAX IMPOSED BY THIS
 ARTICLE.
   (2) APPLICATION OF CREDIT. THE CREDIT ALLOWED  UNDER  THIS  SUBSECTION
 FOR ANY TAXABLE YEAR SHALL NOT, IN THE AGGREGATE, REDUCE THE TAX DUE FOR
 SUCH  YEAR  TO  LESS  THAN  THE  MINIMUM  TAX FIXED BY SUBSECTION (B) OF
 SECTION FOURTEEN HUNDRED FIFTY-FIVE OF THIS  ARTICLE.  HOWEVER,  IF  THE
 AMOUNT  OF  CREDIT  OF SUCH CREDIT ALLOWED UNDER THIS SUBSECTION FOR ANY
 TAXABLE YEAR REDUCES THE TAX TO SUCH AMOUNT, THEN ANY AMOUNT  OF  CREDIT
 THUS  NOT  DEDUCTIBLE  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.
   §  1460.  DECLARATIONS  OF ESTIMATED TAX. (A) REQUIREMENTS OF DECLARA-
 TION. EVERY TAXPAYER SUBJECT TO THE TAX IMPOSED  BY  SUBSECTION  (A)  OF
 SECTION FOURTEEN HUNDRED FIFTY-ONE OF THIS ARTICLE SHALL MAKE A DECLARA-
 TION  OF ITS ESTIMATED TAX FOR THE CURRENT TAXABLE YEAR, CONTAINING SUCH
 INFORMATION AS THE COMMISSIONER OF TAXATION AND FINANCE MAY PRESCRIBE BY
 REGULATIONS OR INSTRUCTIONS, IF SUCH ESTIMATED  TAX  CAN  REASONABLY  BE
 EXPECTED TO EXCEED ONE THOUSAND DOLLARS. IF A TAXPAYER IS SUBJECT TO THE
 TAX  SURCHARGE  IMPOSED BY SECTION FOURTEEN HUNDRED FIFTY-FIVE-B OF THIS
 ARTICLE AND SUCH  TAXPAYER'S  ESTIMATED  TAX  UNDER  SUBSECTION  (A)  OF
 SECTION  FOURTEEN  HUNDRED  FIFTY-ONE  OF THIS ARTICLE CAN REASONABLY BE
 EXPECTED TO EXCEED ONE THOUSAND DOLLARS, SUCH TAXPAYER SHALL ALSO MAKE A
 DECLARATION OF ITS ESTIMATED TAX SURCHARGE FOR THE CURRENT TAXABLE YEAR.

 S. 1680                            74
 
   (B) DEFINITION OF ESTIMATED TAX AND ESTIMATED TAX SURCHARGE. THE TERMS
 "ESTIMATED TAX" AND "ESTIMATED TAX SURCHARGE" MEAN THE AMOUNTS  WHICH  A
 TAXPAYER  ESTIMATES TO BE THE TAX OR TAX SURCHARGE IMPOSED BY SUBSECTION
 (A) OF SECTION FOURTEEN HUNDRED FIFTY-ONE OF THIS  ARTICLE  OR  FOURTEEN
 HUNDRED  FIFTY-FIVE-B  OF  THIS  ARTICLE,  RESPECTIVELY, FOR THE CURRENT
 TAXABLE YEAR, LESS THE AMOUNT WHICH IT ESTIMATES TO BE THE  SUM  OF  ANY
 CREDITS ALLOWABLE AGAINST THE TAX OR TAX SURCHARGE, RESPECTIVELY.
   (C)  TIME FOR FILING DECLARATION. A DECLARATION OF ESTIMATED TAX AND A
 DECLARATION OF ESTIMATED TAX SURCHARGE SHALL BE FILED ON OR BEFORE  JUNE
 FIFTEENTH  OF  THE  CURRENT TAXABLE YEAR IN THE CASE OF A TAXPAYER WHICH
 REPORTS ON THE BASIS OF A CALENDAR YEAR, EXCEPT THAT IF THE REQUIREMENTS
 OF SUBSECTION (A) OF THIS SECTION ARE FIRST MET:
   (1) AFTER MAY THIRTY-FIRST AND BEFORE SEPTEMBER FIRST OF SUCH  CURRENT
 TAXABLE  YEAR,  THE  DECLARATION  SHALL  BE FILED ON OR BEFORE SEPTEMBER
 FIFTEENTH, OR
   (2) AFTER AUGUST  THIRTY-FIRST  AND  BEFORE  DECEMBER  FIRST  OF  SUCH
 CURRENT TAXABLE YEAR, THE DECLARATION SHALL BE FILED ON OR BEFORE DECEM-
 BER FIFTEENTH.
   (D)  AMENDMENTS  OF  DECLARATION.  A  TAXPAYER MAY AMEND A DECLARATION
 UNDER REGULATIONS OF THE TAX COMMISSION.
   (E) RETURN AS DECLARATION. IF, ON OR BEFORE FEBRUARY FIFTEENTH OF  THE
 SUCCEEDING YEAR IN THE CASE OF A TAXPAYER WHOSE TAXABLE YEAR IS A CALEN-
 DAR  YEAR, A TAXPAYER FILES ITS RETURN FOR THE YEAR FOR WHICH THE DECLA-
 RATION IS REQUIRED, AND PAYS THEREWITH THE BALANCE, IF ANY, OF THE  FULL
 AMOUNT OF THE TAX OR TAX SURCHARGE SHOWN TO BE DUE ON THE RETURN:
   (1)  SUCH RETURN SHALL BE CONSIDERED AS ITS DECLARATION IF NO DECLARA-
 TION WAS REQUIRED TO BE FILED DURING THE TAXABLE YEAR FOR WHICH THE  TAX
 OR  TAX  SURCHARGE WAS IMPOSED, BUT IS OTHERWISE REQUIRED TO BE FILED ON
 OR BEFORE DECEMBER FIFTEENTH PURSUANT TO PARAGRAPH TWO OF SUBSECTION (C)
 OF THIS SECTION, AND
   (2) SUCH RETURN SHALL BE CONSIDERED  AS  THE  AMENDMENT  PERMITTED  BY
 SUBSECTION  (D)  OF  THIS  SECTION  TO  BE  FILED  ON OR BEFORE DECEMBER
 FIFTEENTH IF THE TAX OR TAX SURCHARGE SHOWN ON  THE  RETURN  IS  GREATER
 THAN  THE  ESTIMATED TAX OR ESTIMATED TAX SURCHARGE, AS THE CASE MAY BE,
 SHOWN ON A DECLARATION PREVIOUSLY MADE.
   (F) FISCAL YEAR. THIS SECTION SHALL APPLY TO TAXABLE YEARS  OF  TWELVE
 MONTHS  OTHER THAN A CALENDAR YEAR BY THE SUBSTITUTIONS OF THE MONTHS OF
 SUCH FISCAL YEAR FOR THE CORRESPONDING MONTHS SPECIFIED IN THIS SECTION.
   (G) SHORT TAXABLE PERIOD. IF THE TAXABLE PERIOD FOR WHICH A TAX OR TAX
 SURCHARGE IS IMPOSED BY  SUBSECTION  (A)  OF  SECTION  FOURTEEN  HUNDRED
 FIFTY-ONE  OF  THIS  ARTICLE OR SECTION FOURTEEN HUNDRED FIFTY-FIVE-B OF
 THIS ARTICLE, RESPECTIVELY, IS LESS THAN TWELVE MONTHS,  EVERY  TAXPAYER
 REQUIRED  TO  MAKE  A  DECLARATION  OF ESTIMATED TAX OR A DECLARATION OF
 ESTIMATED TAX SURCHARGE FOR SUCH TAXABLE PERIOD SHALL MAKE SUCH A DECLA-
 RATION IN ACCORDANCE WITH REGULATIONS OF THE  COMMISSIONER  OF  TAXATION
 AND FINANCE.
   (H)  EXTENSION  OF  TIME.  THE  TAX  COMMISSION MAY GRANT A REASONABLE
 EXTENSION OF TIME, NOT TO EXCEED THREE MONTHS, FOR  THE  FILING  OF  ANY
 DECLARATION  REQUIRED PURSUANT TO THIS SECTION, ON SUCH TERMS AND CONDI-
 TIONS AS IT MAY REQUIRE.
   § 1461. PAYMENTS OF ESTIMATED TAX. (A) EVERY TAXPAYER SUBJECT  TO  THE
 TAX  IMPOSED  BY SECTION FOURTEEN HUNDRED FIFTY-ONE OF THIS ARTICLE MUST
 PAY AN AMOUNT EQUAL TO (I) TWENTY-FIVE PERCENT OF THE  PRECEDING  YEAR'S
 TAX  IF  THE  PRECEDING YEAR'S TAX EXCEEDED ONE THOUSAND DOLLARS BUT WAS
 EQUAL TO OR LESS THAN  ONE  HUNDRED  THOUSAND  DOLLARS,  OR  (II)  FORTY
 PERCENT OF THE PRECEDING YEAR'S TAX IF THE PRECEDING YEAR'S TAX EXCEEDED

 S. 1680                            75
 
 ONE  HUNDRED  THOUSAND  DOLLARS. THE AMOUNT MUST BE PAID WITH THE RETURN
 REQUIRED TO BE FILED FOR THE PRECEDING TAXABLE YEAR OR WITH AN  APPLICA-
 TION  FOR AN EXTENSION OF THE TIME FOR FILING THE RETURN. IF THE PRECED-
 ING  YEAR'S TAX UNDER SECTION FOURTEEN HUNDRED FIFTY-ONE OF THIS ARTICLE
 EXCEEDED ONE THOUSAND DOLLARS AND THE TAXPAYER IS  SUBJECT  TO  THE  TAX
 SURCHARGE IMPOSED BY SECTION FOURTEEN HUNDRED FIFTY-FIVE-B OF THIS ARTI-
 CLE,  THE  TAXPAYER MUST ALSO PAY WITH THE TAX SURCHARGE RETURN REQUIRED
 TO BE FILED FOR THE PRECEDING TAXABLE YEAR, OR WITH AN  APPLICATION  FOR
 AN  EXTENSION  OF THE TIME FOR FILING THE RETURN, AN AMOUNT EQUAL TO (I)
 TWENTY-FIVE PERCENT OF THE TAX SURCHARGE IMPOSED FOR THE PRECEDING  YEAR
 IF  THE PRECEDING YEAR'S TAX WAS EQUAL TO OR LESS THAN ONE HUNDRED THOU-
 SAND DOLLARS, OR (II) FORTY PERCENT OF THE TAX SURCHARGE IMPOSED FOR THE
 PRECEDING YEAR IF THE PRECEDING YEAR'S TAX EXCEEDED ONE HUNDRED THOUSAND
 DOLLARS.
   (B) OTHER INSTALLMENTS. THE ESTIMATED TAX OR ESTIMATED  TAX  SURCHARGE
 FOR  EACH  TAXABLE YEAR WITH RESPECT TO WHICH A DECLARATION OF ESTIMATED
 TAX OR A  DECLARATION  OF  ESTIMATED  TAX  SURCHARGE,  RESPECTIVELY,  IS
 REQUIRED  TO BE FILED UNDER THIS ARTICLE SHALL BE PAID, IN THE CASE OF A
 TAXPAYER WHICH REPORTS ON THE BASIS OF A CALENDAR YEAR, AS FOLLOWS:
   (1) IF THE DECLARATION IS FILED ON OR BEFORE JUNE FIFTEENTH, THE ESTI-
 MATED TAX OR ESTIMATED TAX SURCHARGE SHOWN THEREON, AFTER APPLYING THER-
 ETO THE AMOUNT, IF ANY, PAID DURING THE SAME TAXABLE  YEAR  PURSUANT  TO
 SUBSECTION  (A)  OF  THIS SECTION, SHALL BE PAID IN THREE EQUAL INSTALL-
 MENTS. ONE OF SUCH INSTALLMENTS SHALL BE PAID AT THE TIME OF THE  FILING
 OF  THE  DECLARATION,  ONE  SHALL  BE  PAID  ON  THE FOLLOWING SEPTEMBER
 FIFTEENTH, AND ONE ON THE FOLLOWING DECEMBER FIFTEENTH.
   (2) IF THE DECLARATION IS FILED AFTER JUNE  FIFTEENTH  AND  NOT  AFTER
 SEPTEMBER  FIFTEENTH  OF  SUCH  TAXABLE  YEAR, AND IS NOT REQUIRED TO BE
 FILED ON OR BEFORE JUNE FIFTEENTH OF SUCH  YEAR  THE  ESTIMATED  TAX  OR
 ESTIMATED TAX SURCHARGE SHOWN ON SUCH DECLARATION, AFTER APPLYING THERE-
 TO  THE  AMOUNT,  IF  ANY, PAID DURING THE SAME TAXABLE YEAR PURSUANT TO
 SUBSECTION (A) OF THIS SECTION, SHALL BE PAID IN TWO EQUAL INSTALLMENTS.
 ONE OF SUCH INSTALLMENTS SHALL BE PAID AT THE TIME OF THE FILING OF  THE
 DECLARATION AND ONE SHALL BE PAID ON THE FOLLOWING DECEMBER FIFTEENTH.
   (3)  IF  THE  DECLARATION  IS  FILED AFTER SEPTEMBER FIFTEENTH OF SUCH
 TAXABLE YEAR, AND IS NOT REQUIRED TO BE FILED  ON  OR  BEFORE  SEPTEMBER
 FIFTEENTH  OF  SUCH  YEAR,  THE ESTIMATED TAX OR ESTIMATED TAX SURCHARGE
 SHOWN ON SUCH DECLARATION, AFTER APPLYING THERETO THE  AMOUNT,  IF  ANY,
 PAID  IN RESPECT OF SUCH YEAR PURSUANT TO SUBSECTION (A) OF THIS SECTION
 SHALL BE PAID IN FULL AT THE TIME OF THE FILING OF THE DECLARATION.
   (4) IF THE DECLARATION IS FILED AFTER THE TIME PRESCRIBED THEREFOR, OR
 AFTER THE EXPIRATION OF ANY EXTENSION OF TIME THEREFOR,  PARAGRAPHS  TWO
 AND  THREE OF THIS SUBSECTION SHALL NOT APPLY AND THERE SHALL BE PAID AT
 THE TIME OF SUCH FILING ALL INSTALLMENTS OF ESTIMATED TAX  OR  ESTIMATED
 TAX SURCHARGE PAYABLE AT OR BEFORE SUCH TIME, AND THE REMAINING INSTALL-
 MENTS  SHALL BE PAID AT THE TIMES AT WHICH, AND IN THE AMOUNTS IN WHICH,
 THEY WOULD HAVE BEEN PAYABLE IF THE DECLARATION HAD BEEN FILED WHEN DUE.
   (C) AMENDMENTS OF DECLARATIONS. IF ANY AMENDMENT OF A  DECLARATION  IS
 FILED, THE REMAINING INSTALLMENTS, IF ANY, SHALL BE RATABLY INCREASED OR
 DECREASED  (AS  THE  CASE MAY BE) TO REFLECT ANY INCREASE OR DECREASE IN
 THE ESTIMATED TAX OR ESTIMATED TAX SURCHARGE BY REASON  OF  SUCH  AMEND-
 MENT,  AND  IF  ANY  AMENDMENT  IS MADE AFTER SEPTEMBER FIFTEENTH OF THE
 TAXABLE YEAR, ANY  INCREASE  IN  THE  ESTIMATED  TAX  OR  ESTIMATED  TAX
 SURCHARGE  BY  REASON  THEREOF  SHALL BE PAID AT THE TIME OF MAKING SUCH
 AMENDMENT.

 S. 1680                            76
 
   (D) APPLICATION OF INSTALLMENTS BASED ON THE PRECEDING YEAR'S TAX. (1)
 ANY AMOUNT PAID PURSUANT TO SUBSECTION (A)  OF  THIS  SECTION  SHALL  BE
 APPLIED  AS  A  FIRST INSTALLMENT AGAINST THE ESTIMATED TAX OR ESTIMATED
 TAX SURCHARGE, RESPECTIVELY, OF THE TAXPAYER FOR THE TAXABLE YEAR  SHOWN
 ON  THE  DECLARATION  REQUIRED  TO BE FILED PURSUANT TO SECTION FOURTEEN
 HUNDRED SIXTY OF THIS ARTICLE, OR IF NO DECLARATION OF ESTIMATED TAX  OR
 A  DECLARATION OF ESTIMATED TAX SURCHARGE IS REQUIRED TO BE FILED BY THE
 TAXPAYER PURSUANT TO SUCH SECTION, ANY SUCH AMOUNT SHALL BE CONSIDERED A
 PAYMENT ON ACCOUNT OF THE TAX OR  TAX  SURCHARGE  SHOWN  ON  THE  RETURN
 REQUIRED TO BE FILED BY THE TAXPAYER FOR SUCH TAXABLE YEAR.
   (2)  ANY  AMOUNT  PAID PURSUANT TO PARAGRAPH FOUR OF SUBSECTION (C) OF
 SECTION SIX HUNDRED FIFTY-EIGHT OF THIS CHAPTER ON BEHALF OF A  TAXPAYER
 SUBJECT TO TAX UNDER THIS ARTICLE SHALL BE APPLIED AGAINST THE ESTIMATED
 TAX  OF  THE  TAXPAYER  FOR  THE  TAXABLE  YEAR SHOWN ON THE DECLARATION
 REQUIRED TO BE FILED PURSUANT TO SECTION FOURTEEN HUNDRED SIXTY OF  THIS
 ARTICLE,  OR  IF  NO  DECLARATION IS FILED PURSUANT TO SUCH SECTION, ANY
 SUCH AMOUNT SHALL BE CONSIDERED A PAYMENT ON ACCOUNT OF TAX SHOWN ON THE
 RETURN REQUIRED TO BE FILED BY THE TAXPAYER FOR SUCH TAXABLE YEAR.
   (E) INTEREST ON CERTAIN INSTALLMENTS BASED  ON  THE  PRECEDING  YEAR'S
 TAX. NOTWITHSTANDING THE PROVISIONS OF SECTION ONE THOUSAND EIGHTY-EIGHT
 OF  THIS  CHAPTER  OR OF SECTION SIXTEEN OF THE STATE FINANCE LAW, IF AN
 AMOUNT PAID PURSUANT TO SUBSECTION (A) OF THIS SECTION EXCEEDS  THE  TAX
 OR TAX SURCHARGE, RESPECTIVELY, SHOWN ON THE RETURN REQUIRED TO BE FILED
 BY  THE  TAXPAYER FOR THE TAXABLE YEAR DURING WHICH THE AMOUNT WAS PAID,
 INTEREST SHALL BE ALLOWED AND PAID ON THE AMOUNT BY WHICH THE AMOUNT  SO
 PAID  PURSUANT  TO SUCH SUBSECTION EXCEEDS SUCH TAX OR TAX SURCHARGE, AT
 THE OVERPAYMENT RATE SET BY THE COMMISSIONER  OF  TAXATION  AND  FINANCE
 PURSUANT  TO  SECTION  ONE THOUSAND NINETY-SIX OF THIS CHAPTER, OR IF NO
 RATE IS SET, AT THE RATE OF SIX PER CENT PER  ANNUM  FROM  THE  DATE  OF
 PAYMENT  OF  THE  AMOUNT  SO  PAID  PURSUANT  TO  SUCH SUBSECTION TO THE
 FIFTEENTH DAY OF THE THIRD MONTH FOLLOWING  THE  CLOSE  OF  THE  TAXABLE
 YEAR, PROVIDED, HOWEVER, THAT NO INTEREST SHALL BE ALLOWED OR PAID UNDER
 THIS SUBSECTION IF THE AMOUNT THEREOF IS LESS THAN ONE DOLLAR.
   (F)  THE  PRECEDING  YEAR'S TAX DEFINED. AS USED IN THIS SECTION, "THE
 PRECEDING YEAR'S TAX"  MEANS  THE  TAX  IMPOSED  UPON  THE  TAXPAYER  BY
 SUBSECTION (A) OF SECTION FOURTEEN HUNDRED FIFTY-ONE OF THIS ARTICLE FOR
 THE  PRECEDING  TAXABLE  YEAR,  OR,  FOR PURPOSES OF COMPUTING THE FIRST
 INSTALLMENT OF ESTIMATED TAX WHEN AN  APPLICATION  HAS  BEEN  FILED  FOR
 EXTENSION  OF  THE  TIME  FOR FILING THE RETURN REQUIRED TO BE FILED FOR
 SUCH PRECEDING TAXABLE YEAR, THE AMOUNT PROPERLY ESTIMATED  PURSUANT  TO
 PARAGRAPH  ONE OF SUBSECTION (B) OF SECTION FOURTEEN HUNDRED SIXTY-THREE
 OF THIS ARTICLE AS THE TAX IMPOSED UPON THE TAXPAYER  FOR  SUCH  TAXABLE
 YEAR.
   (G) APPLICATION TO SHORT TAXABLE PERIOD. THIS SECTION SHALL APPLY TO A
 TAXABLE PERIOD OF LESS THAN TWELVE MONTHS IN ACCORDANCE WITH REGULATIONS
 OF THE TAX COMMISSION.
   (H) FISCAL YEAR. THE PROVISIONS OF THIS SECTION SHALL APPLY TO TAXABLE
 YEARS OF TWELVE MONTHS OTHER THAN A CALENDAR YEAR BY THE SUBSTITUTION OF
 THE MONTHS OF SUCH FISCAL YEAR FOR THE CORRESPONDING MONTHS SPECIFIED IN
 SUCH PROVISIONS.
   (I)  EXTENSION  OF  TIME. THE COMMISSIONER OF TAXATION AND FINANCE MAY
 GRANT A REASONABLE EXTENSION OF TIME, NOT  TO  EXCEED  SIX  MONTHS,  FOR
 PAYMENT  OF  ANY INSTALLMENT OF ESTIMATED TAX OR ESTIMATED TAX SURCHARGE
 REQUIRED PURSUANT TO THIS SECTION, ON SUCH TERMS AND  CONDITIONS  AS  HE
 MAY REQUIRE, INCLUDING THE FURNISHING OF A BOND OR OTHER SECURITY BY THE
 TAXPAYER  IN  AN  AMOUNT  NOT  EXCEEDING  TWICE THE AMOUNT FOR WHICH ANY

 S. 1680                            77
 
 EXTENSION OF TIME FOR PAYMENT IS GRANTED, PROVIDED, HOWEVER, THAT INTER-
 EST AT THE UNDERPAYMENT RATE SET BY THE COMMISSIONER PURSUANT TO SECTION
 ONE THOUSAND NINETY-SIX OF THIS CHAPTER, OR IF NO RATE IS  SET,  AT  THE
 RATE  OF  SIX PER CENTUM PER ANNUM FOR THE PERIOD OF THE EXTENSION SHALL
 BE CHARGED AND COLLECTED ON THE AMOUNT FOR WHICH ANY EXTENSION  OF  TIME
 FOR PAYMENT IS GRANTED UNDER THIS SUBSECTION.
   (J)  PAYMENT  OF  INSTALLMENTS IN ADVANCE. A TAXPAYER MAY ELECT TO PAY
 ANY INSTALLMENT OF ESTIMATED TAX OR ESTIMATED TAX SURCHARGE PRIOR TO THE
 DATE PRESCRIBED IN THIS SECTION FOR PAYMENT THEREOF.
   § 1462. RETURNS. (A) EVERY TAXPAYER, AS WELL AS  EVERY  OTHER  BANKING
 CORPORATION HAVING AN EMPLOYEE, INCLUDING ANY OFFICER, WITHIN THE STATE,
 SHALL ANNUALLY ON OR BEFORE THE FIFTEENTH DAY OF THE THIRD MONTH FOLLOW-
 ING  THE  CLOSE OF EACH OF ITS TAXABLE YEARS TRANSMIT TO THE TAX COMMIS-
 SION A RETURN IN A FORM PRESCRIBED BY IT SETTING FORTH SUCH  INFORMATION
 AS  THE  TAX COMMISSION MAY PRESCRIBE AND EVERY TAXPAYER WHICH CEASES TO
 EXERCISE ITS FRANCHISE OR TO BE SUBJECT TO THE TAX IMPOSED BY THIS ARTI-
 CLE SHALL TRANSMIT TO THE TAX COMMISSION A RETURN ON THE  DATE  OF  SUCH
 CESSATION OR AT SUCH OTHER TIME AS THE TAX COMMISSION MAY REQUIRE COVER-
 ING  EACH  YEAR  OR PERIOD FOR WHICH NO RETURN WAS THERETOFORE FILED. IN
 THE CASE OF A TERMINATION YEAR OF AN S CORPORATION, THE S SHORT YEAR AND
 THE C SHORT YEAR SHALL BE  TREATED  AS  SEPARATE  SHORT  TAXABLE  YEARS,
 PROVIDED, HOWEVER, THE DUE DATE OF THE REPORT FOR THE S SHORT YEAR SHALL
 BE THE SAME AS THE DUE DATE OF THE REPORT FOR THE C SHORT YEAR.
   (B)  EVERY  TAXPAYER  SHALL  ALSO TRANSMIT SUCH OTHER RETURNS AND SUCH
 FACTS AND INFORMATION AS THE TAX COMMISSION MAY REQUIRE IN THE  ADMINIS-
 TRATION OF THIS ARTICLE.
   (C)  THE  TAX  COMMISSION MAY GRANT A REASONABLE EXTENSION OF TIME FOR
 FILING RETURNS WHENEVER GOOD CAUSE EXISTS. AN AUTOMATIC EXTENSION OF SIX
 MONTHS FOR THE FILING OF ITS ANNUAL RETURN SHALL BE ALLOWED ANY  TAXPAY-
 ER,  IF  WITHIN  THE  TIME PRESCRIBED BY SUBSECTION (A) OF THIS SECTION,
 SUCH TAXPAYER FILES WITH THE TAX COMMISSION AN APPLICATION FOR EXTENSION
 IN SUCH FORM AS SAID COMMISSION MAY PRESCRIBE BY REGULATION AND PAYS  ON
 OR  BEFORE  THE DATE OF SUCH FILING THE AMOUNT PROPERLY ESTIMATED AS ITS
 TAX.
   (D) EVERY RETURN SHALL HAVE ANNEXED THERETO  A  CERTIFICATION  BY  THE
 PRESIDENT,   VICE   PRESIDENT,  TREASURER,  ASSISTANT  TREASURER,  CHIEF
 ACCOUNTING OFFICER OR ANY OTHER OFFICER OF THE TAXPAYER DULY  AUTHORIZED
 SO  TO ACT TO THE EFFECT THAT THE STATEMENTS CONTAINED THEREIN ARE TRUE.
 THE FACT THAT AN INDIVIDUAL'S NAME IS SIGNED ON A CERTIFICATION  OF  THE
 RETURN  SHALL BE PRIMA FACIE EVIDENCE THAT SUCH INDIVIDUAL IS AUTHORIZED
 TO SIGN AND CERTIFY THE RETURN ON BEHALF OF THE CORPORATION. IN THE CASE
 OF AN ASSOCIATION OR PUBLICLY TRADED PARTNERSHIP REFERRED  TO  IN  PARA-
 GRAPH ONE OF SUBSECTION (F) OF THIS SECTION, SUCH CERTIFICATION SHALL BE
 MADE  BY  ANY PERSON DULY AUTHORIZED SO TO ACT ON BEHALF OF SUCH ASSOCI-
 ATION OR PUBLICLY TRADED PARTNERSHIP.
   (E) IF THE AMOUNT OF TAXABLE INCOME  OR  ALTERNATIVE  MINIMUM  TAXABLE
 INCOME  FOR  ANY  YEAR OF ANY TAXPAYER (INCLUDING ANY TAXPAYER WHICH HAS
 ELECTED TO BE TAXED UNDER SUBCHAPTER S OF CHAPTER ONE  OF  THE  INTERNAL
 REVENUE  CODE)  AS  RETURNED TO THE UNITED STATES TREASURY DEPARTMENT IS
 CHANGED OR CORRECTED BY THE COMMISSIONER OF INTERNAL  REVENUE  OR  OTHER
 OFFICER OF THE UNITED STATES OR OTHER COMPETENT AUTHORITY, SUCH TAXPAYER
 SHALL  REPORT  SUCH  CHANGE  OR  CORRECTED TAXABLE INCOME OR ALTERNATIVE
 MINIMUM TAXABLE INCOME WITHIN NINETY DAYS (OR ONE HUNDRED  TWENTY  DAYS,
 IN  THE  CASE  OF A TAXPAYER MAKING A COMBINED RETURN UNDER THIS ARTICLE
 FOR  SUCH  YEAR)  AFTER  THE  FINAL  DETERMINATION  OF  SUCH  CHANGE  OR
 CORRECTION  OR  AS  REQUIRED  BY THE COMMISSIONER, AND SHALL CONCEDE THE

 S. 1680                            78
 
 ACCURACY OF SUCH DETERMINATION OR STATE WHEREIN  IT  IS  ERRONEOUS.  ANY
 TAXPAYER  FILING  AN AMENDED RETURN WITH SUCH DEPARTMENT SHALL ALSO FILE
 WITHIN NINETY DAYS (OR ONE HUNDRED TWENTY DAYS, IN THE CASE OF A TAXPAY-
 ER MAKING A COMBINED RETURN UNDER THIS ARTICLE FOR SUCH YEAR) THEREAFTER
 AN  AMENDED RETURN WITH THE COMMISSIONER WHICH SHALL CONTAIN SUCH INFOR-
 MATION AS THE COMMISSIONER SHALL REQUIRE. THE ALLOWANCE OF  A  TENTATIVE
 CARRYBACK ADJUSTMENT BASED UPON A NET CAPITAL LOSS CARRYBACK PURSUANT TO
 SECTION SIXTY-FOUR HUNDRED ELEVEN OF THE INTERNAL REVENUE CODE, SHALL BE
 TREATED AS A FINAL DETERMINATION FOR PURPOSES OF THIS SUBSECTION.
   (F) (1) FOR PURPOSES OF THIS SUBSECTION, THE TERM "BANK HOLDING COMPA-
 NY" MEANS ANY CORPORATION SUBJECT TO ARTICLE THREE-A OF THE BANKING LAW,
 OR  REGISTERED  UNDER  THE  FEDERAL BANK HOLDING COMPANY ACT OF NINETEEN
 HUNDRED FIFTY-SIX, AS AMENDED, OR REGISTERED AS A SAVINGS AND LOAN HOLD-
 ING COMPANY (BUT EXCLUDING A DIVERSIFIED SAVINGS AND LOAN HOLDING COMPA-
 NY) UNDER THE FEDERAL NATIONAL HOUSING ACT, AS AMENDED. FOR PURPOSES  OF
 THE  PRECEDING SENTENCE, THE TERM "CORPORATION" SHALL INCLUDE AN ASSOCI-
 ATION, WITHIN THE MEANING  OF  PARAGRAPH  THREE  OF  SUBSECTION  (A)  OF
 SECTION  SEVENTY-SEVEN  HUNDRED  ONE OF THE INTERNAL REVENUE CODE, AND A
 PUBLICLY TRADED PARTNERSHIP TREATED AS A CORPORATION FOR PURPOSES OF THE
 INTERNAL REVENUE CODE PURSUANT TO  SECTION  SEVENTY-SEVEN  HUNDRED  FOUR
 THEREOF.
   (2) (I) ANY BANKING CORPORATION OR BANK HOLDING COMPANY WHICH IS EXER-
 CISING  ITS  CORPORATE  FRANCHISE  OR  DOING BUSINESS IN THIS STATE IN A
 CORPORATE OR ORGANIZED CAPACITY, AND
   (A) WHICH OWNS OR CONTROLS, DIRECTLY OR INDIRECTLY, EIGHTY PERCENT  OR
 MORE  OF  THE  VOTING  STOCK OF ONE OR MORE BANKING CORPORATIONS OR BANK
 HOLDING COMPANIES, OR
   (B) WHOSE VOTING STOCK IS EIGHTY PERCENT OR MORE OWNED OR  CONTROLLED,
 DIRECTLY  OR  INDIRECTLY,  BY  A  BANKING  CORPORATION OR A BANK HOLDING
 COMPANY, SHALL MAKE A RETURN ON A  COMBINED  BASIS  UNDER  THIS  ARTICLE
 COVERING ITSELF AND SUCH CORPORATIONS DESCRIBED IN CLAUSE (A) OR (B) AND
 SHALL  SET  FORTH  SUCH  INFORMATION  AS  THE TAX COMMISSION MAY REQUIRE
 UNLESS THE TAXPAYER OR THE TAX COMMISSION SHOWS THAT  THE  INCLUSION  OF
 SUCH  A CORPORATION IN THE COMBINED RETURN FAILS TO PROPERLY REFLECT THE
 TAX LIABILITY OF SUCH CORPORATION UNDER THIS ARTICLE. PROVIDED, HOWEVER,
 THAT NO BANKING CORPORATION OR BANK HOLDING COMPANY NOT A TAXPAYER SHALL
 BE SUBJECT TO THE REQUIREMENTS  OF  THIS  SUBPARAGRAPH  UNLESS  THE  TAX
 COMMISSION  DEEMS THAT THE APPLICATION OF SUCH REQUIREMENTS IS NECESSARY
 IN ORDER TO PROPERLY REFLECT  THE  TAX  LIABILITY  UNDER  THIS  ARTICLE,
 BECAUSE  OF  INTERCOMPANY TRANSACTIONS OR SOME AGREEMENT, UNDERSTANDING,
 ARRANGEMENT OR TRANSACTION OF THE TYPE REFERRED TO IN SUBSECTION (G)  OF
 THIS SECTION.
   (II)  IN THE DISCRETION OF THE TAX COMMISSION, ANY BANKING CORPORATION
 OR BANK HOLDING COMPANY WHICH IS EXERCISING ITS CORPORATE  FRANCHISE  OR
 DOING BUSINESS IN THIS STATE IN A CORPORATE OR ORGANIZED CAPACITY, AND
   (A) WHICH OWNS OR CONTROLS, DIRECTLY OR INDIRECTLY, SIXTY-FIVE PERCENT
 OR  MORE OF THE VOTING STOCK OF ONE OR MORE BANKING CORPORATIONS OR BANK
 HOLDING COMPANIES, OR
   (B) WHOSE  VOTING  STOCK  IS  SIXTY-FIVE  PERCENT  OR  MORE  OWNED  OR
 CONTROLLED,  DIRECTLY  OR INDIRECTLY, BY A BANKING CORPORATION OR A BANK
 HOLDING COMPANY, MAY BE REQUIRED OR PERMITTED TO  MAKE  A  RETURN  ON  A
 COMBINED  BASIS UNDER THIS ARTICLE COVERING ITSELF AND SUCH CORPORATIONS
 DESCRIBED IN CLAUSE (A) OR (B) AND SHALL SET FORTH SUCH  INFORMATION  AS
 THE  TAX  COMMISSION  MAY  REQUIRE;  PROVIDED, HOWEVER, THAT NO COMBINED
 RETURN SHALL BE REQUIRED OR PERMITTED UNLESS THE  TAX  COMMISSION  DEEMS
 SUCH  REPORT  NECESSARY  IN  ORDER TO PROPERLY REFLECT THE TAX LIABILITY

 S. 1680                            79
 
 UNDER THIS ARTICLE OF ANY ONE OR MORE OF SUCH  BANKING  CORPORATIONS  OR
 BANK HOLDING COMPANIES.
   (III) IN THE DISCRETION OF THE TAX COMMISSION, BANKING CORPORATIONS OR
 BANK  HOLDING  COMPANIES  WHICH  ARE SIXTY-FIVE PERCENT OR MORE OWNED OR
 CONTROLLED, DIRECTLY OR INDIRECTLY, BY THE SAME INTEREST MAY BE  PERMIT-
 TED  OR REQUIRED TO MAKE A RETURN ON A COMBINED BASIS UNDER THIS ARTICLE
 AND SHALL SET FORTH SUCH INFORMATION AS THE TAX COMMISSION MAY  REQUIRE,
 IF  AT  LEAST  ONE  SUCH  BANKING CORPORATION OR BANK HOLDING COMPANY IS
 EXERCISING ITS CORPORATE FRANCHISE OR DOING BUSINESS IN THIS STATE IN  A
 CORPORATE OR ORGANIZED CAPACITY. NO COMBINED RETURN SHALL BE REQUIRED OR
 PERMITTED UNLESS THE TAX COMMISSION DEEMS SUCH REPORT NECESSARY IN ORDER
 TO  PROPERLY  REFLECT THE TAX LIABILITY UNDER THIS ARTICLE OF ANY ONE OR
 MORE OF SUCH BANKING CORPORATIONS OR BANK HOLDING COMPANIES.
   (IV) (A) NOTWITHSTANDING ANY PROVISION OF  THIS  PARAGRAPH,  ANY  BANK
 HOLDING  COMPANY EXERCISING ITS CORPORATE FRANCHISE OR DOING BUSINESS IN
 THE STATE MAY MAKE A RETURN ON A  COMBINED  BASIS  WITHOUT  SEEKING  THE
 PERMISSION  OF  THE COMMISSIONER WITH ANY BANKING CORPORATION EXERCISING
 ITS CORPORATE FRANCHISE OR DOING BUSINESS IN THE STATE IN A CORPORATE OR
 ORGANIZED CAPACITY SIXTY-FIVE PERCENT OR MORE OF WHOSE VOTING  STOCK  IS
 OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY, BY SUCH BANK HOLDING COMPA-
 NY,  FOR THE FIRST TAXABLE YEAR BEGINNING ON OR AFTER JANUARY FIRST, TWO
 THOUSAND AND BEFORE JANUARY FIRST, TWO THOUSAND  NINETEEN  DURING  WHICH
 SUCH BANK HOLDING COMPANY REGISTERS FOR THE FIRST TIME UNDER THE FEDERAL
 BANK  HOLDING COMPANY ACT, AS AMENDED, AND ALSO ELECTS TO BE A FINANCIAL
 HOLDING COMPANY. IN ADDITION, FOR EACH SUBSEQUENT TAXABLE YEAR BEGINNING
 AFTER JANUARY FIRST, TWO THOUSAND AND BEFORE JANUARY FIRST, TWO THOUSAND
 NINETEEN, ANY SUCH BANK HOLDING COMPANY MAY FILE  ON  A  COMBINED  BASIS
 WITHOUT  SEEKING  THE  PERMISSION  OF  THE COMMISSIONER WITH ANY BANKING
 CORPORATION THAT IS EXERCISING ITS CORPORATE FRANCHISE OR DOING BUSINESS
 IN THE STATE AND SIXTY-FIVE PERCENT OR MORE OF  WHOSE  VOTING  STOCK  IS
 OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY, BY SUCH BANK HOLDING COMPA-
 NY  IF EITHER SUCH BANKING CORPORATION IS EXERCISING ITS CORPORATE FRAN-
 CHISE OR DOING BUSINESS IN THE STATE IN A CORPORATE OR ORGANIZED CAPACI-
 TY FOR THE FIRST TIME DURING SUCH SUBSEQUENT TAXABLE YEAR, OR SIXTY-FIVE
 PERCENT OR MORE OF THE VOTING STOCK OF SUCH BANKING CORPORATION IS OWNED
 OR CONTROLLED, DIRECTLY OR INDIRECTLY, BY SUCH BANK HOLDING COMPANY  FOR
 THE  FIRST  TIME DURING SUCH SUBSEQUENT TAXABLE YEAR.  PROVIDED HOWEVER,
 FOR EACH SUBSEQUENT TAXABLE YEAR  BEGINNING  AFTER  JANUARY  FIRST,  TWO
 THOUSAND  AND  BEFORE  JANUARY  FIRST,  TWO THOUSAND NINETEEN, A BANKING
 CORPORATION DESCRIBED IN EITHER OF THE  TWO  PRECEDING  SENTENCES  WHICH
 FILED ON A COMBINED BASIS WITH ANY SUCH BANK HOLDING COMPANY IN A PREVI-
 OUS  TAXABLE  YEAR,  MUST CONTINUE TO FILE ON A COMBINED BASIS WITH SUCH
 BANK HOLDING COMPANY IF SUCH BANKING CORPORATION, DURING SUCH SUBSEQUENT
 TAXABLE YEAR, CONTINUES TO EXERCISE ITS CORPORATE FRANCHISE OR DO  BUSI-
 NESS  IN  THE  STATE IN A CORPORATE OR ORGANIZED CAPACITY AND SIXTY-FIVE
 PERCENT OR MORE OF SUCH BANKING CORPORATION'S VOTING STOCK CONTINUES  TO
 BE  OWNED  OR  CONTROLLED,  DIRECTLY OR INDIRECTLY, BY SUCH BANK HOLDING
 COMPANY, UNLESS THE PERMISSION OF THE COMMISSIONER HAS BEEN OBTAINED  TO
 FILE  ON  A  SEPARATE  BASIS  FOR SUCH SUBSEQUENT TAXABLE YEAR. PROVIDED
 FURTHER, HOWEVER, FOR EACH SUBSEQUENT TAXABLE YEAR BEGINNING AFTER JANU-
 ARY FIRST, TWO THOUSAND AND BEFORE JANUARY FIRST, TWO THOUSAND NINETEEN,
 A BANKING CORPORATION DESCRIBED IN EITHER OF THE FIRST TWO SENTENCES  OF
 THIS  CLAUSE  WHICH  DID NOT FILE ON A COMBINED BASIS WITH ANY SUCH BANK
 HOLDING COMPANY IN A PREVIOUS TAXABLE YEAR, MAY NOT FILE ON  A  COMBINED
 BASIS  WITH SUCH BANK HOLDING COMPANY DURING ANY SUCH SUBSEQUENT TAXABLE

 S. 1680                            80
 
 YEAR UNLESS THE PERMISSION OF THE COMMISSIONER HAS BEEN OBTAINED TO FILE
 ON A COMBINED BASIS FOR SUCH SUBSEQUENT TAXABLE YEAR.
   (B)  NOTWITHSTANDING ANY PROVISION OF THIS PARAGRAPH OTHER THAN CLAUSE
 (A) OF THIS SUBPARAGRAPH, THE COMMISSIONER MAY NOT REQUIRE A BANK  HOLD-
 ING  COMPANY  WHICH, DURING A TAXABLE YEAR BEGINNING ON OR AFTER JANUARY
 FIRST, TWO THOUSAND AND BEFORE JANUARY  FIRST,  TWO  THOUSAND  NINETEEN,
 REGISTERS  FOR THE FIRST TIME DURING SUCH TAXABLE YEAR UNDER THE FEDERAL
 BANK HOLDING COMPANY ACT, AS AMENDED, AND ALSO ELECTS TO BE A  FINANCIAL
 HOLDING  COMPANY,  TO  MAKE A RETURN ON A COMBINED BASIS FOR ANY TAXABLE
 YEAR BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND AND BEFORE  JANU-
 ARY  FIRST,  TWO THOUSAND NINETEEN WITH A BANKING CORPORATION SIXTY-FIVE
 PERCENT OR MORE OF WHOSE VOTING STOCK IS OWNED OR  CONTROLLED,  DIRECTLY
 OR INDIRECTLY, BY SUCH BANK HOLDING COMPANY.
   (V)  A BANKING CORPORATION DOING BUSINESS IN THIS STATE SOLELY BECAUSE
 IT MEETS ONE OR MORE OF THE TESTS IN SUBPARAGRAPHS (I)  THROUGH  (V)  OF
 PARAGRAPH ONE OF SUBSECTION (C) OF SECTION FOURTEEN HUNDRED FIFTY-ONE OF
 THIS  ARTICLE  (REFERRED  TO  IN  THIS  SUBPARAGRAPH AS THE "CREDIT CARD
 BANK") WILL NOT BE INCLUDED IN A COMBINED RETURN  PURSUANT  TO  SUBPARA-
 GRAPH  (I)  OF  THIS  PARAGRAPH WITH ANOTHER BANKING CORPORATION OR BANK
 HOLDING COMPANY WHICH IS EXERCISING ITS  CORPORATE  FRANCHISE  OR  DOING
 BUSINESS  IN  THIS STATE UNLESS THE CREDIT CARD BANK OR THE COMMISSIONER
 SHOWS THAT THE INCLUSION OF THE CREDIT CARD BANK IN THE COMBINED  RETURN
 IS  NECESSARY  TO  PROPERLY REFLECT THE TAX LIABILITY OF THE CREDIT CARD
 BANK, THE BANKING CORPORATION OR BANK HOLDING COMPANY UNDER  THIS  ARTI-
 CLE.  HOWEVER,  ANY  BANKING  CORPORATION  THAT MEETS ONE OR MORE OF THE
 TESTS IN SUBPARAGRAPHS (I) THROUGH (V) OF PARAGRAPH  ONE  OF  SUBSECTION
 (C) OF SECTION FOURTEEN HUNDRED FIFTY-ONE AND WAS INCLUDED IN A COMBINED
 RETURN  FOR  ITS  LAST  TAXABLE YEAR BEGINNING BEFORE JANUARY FIRST, TWO
 THOUSAND EIGHT MAY CONTINUE TO BE INCLUDED  IN  A  COMBINED  RETURN  FOR
 FUTURE  TAXABLE  YEARS,  PROVIDED THAT ONCE THAT BANKING CORPORATION HAS
 BEEN INCLUDED IN A COMBINED RETURN FOR ANY TAXABLE YEAR BEGINNING ON  OR
 AFTER JANUARY FIRST, TWO THOUSAND EIGHT, IT MUST CONTINUE TO BE INCLUDED
 IN A COMBINED RETURN UNTIL IT OBTAINS THE CONSENT OF THE COMMISSIONER TO
 CEASE BEING INCLUDED IN A COMBINED RETURN BECAUSE THE COMBINED RETURN NO
 LONGER  PROPERLY REFLECTS THE TAX LIABILITY UNDER THIS ARTICLE OF ANY OF
 THE CORPORATIONS INCLUDED IN THE COMBINED RETURN.  FURTHER,  THE  CREDIT
 CARD  BANK  WILL  BE  INCLUDED IN A COMBINED RETURN WITH (I) ANY BANKING
 CORPORATION NOT SUBJECT TO TAX UNDER THIS ARTICLE SIXTY-FIVE PERCENT  OR
 MORE OF WHOSE VOTING STOCK IS OWNED OR CONTROLLED, DIRECTLY OR INDIRECT-
 LY,  BY  THE  CREDIT  CARD BANK, OR (II) ANY BANKING CORPORATION OR BANK
 HOLDING COMPANY NOT SUBJECT TO TAX UNDER  THIS  ARTICLE  WHICH  OWNS  OR
 CONTROLS,  DIRECTLY  OR  INDIRECTLY,  SIXTY-FIVE  PERCENT OR MORE OF THE
 VOTING STOCK OF THE CREDIT CARD BANK, OR (III) ANY  BANKING  CORPORATION
 NOT  SUBJECT TO TAX UNDER THIS ARTICLE SIXTY-FIVE PERCENT OR MORE OF THE
 VOTING STOCK OF WHICH IS OWNED OR CONTROLLED, DIRECTLY OR INDIRECTLY, BY
 THE SAME CORPORATION OR CORPORATIONS THAT OWN OR  CONTROL,  DIRECTLY  OR
 INDIRECTLY, SIXTY-FIVE PERCENT OR MORE OF THE VOTING STOCK OF THE CREDIT
 CARD  BANK, IF THE CORPORATION OR CORPORATIONS DESCRIBED IN CLAUSES (I),
 (II) AND (III) OF THIS SUBPARAGRAPH PROVIDE SERVICES FOR OR  SUPPORT  TO
 THE  CREDIT  CARD  BANK'S OPERATIONS, UNLESS THE CREDIT CARD BANK OR THE
 COMMISSIONER SHOWS THAT THE INCLUSION OF ANY OF  THOSE  CORPORATIONS  IN
 THE  COMBINED  RETURN FAILS TO PROPERLY REFLECT THE TAX LIABILITY OF THE
 CREDIT CARD BANK. FOR PURPOSES OF THIS  SUBPARAGRAPH,  SERVICES  FOR  OR
 SUPPORT  TO THE CREDIT CARD BANK'S OPERATIONS INCLUDE SUCH ACTIVITIES AS
 BILLING, CREDIT INVESTIGATION AND REPORTING, MARKETING, RESEARCH, ADVER-
 TISING, MAILING, CUSTOMER SERVICE, INFORMATION TECHNOLOGY,  LENDING  AND

 S. 1680                            81
 
 FINANCING  SERVICES,  AND  COMMUNICATIONS SERVICES, BUT WILL NOT INCLUDE
 ACCOUNTING, LEGAL OR PERSONNEL SERVICES.
   (VI)(A)  FOR PURPOSES OF THIS SUBPARAGRAPH, THE TERM "CLOSEST CONTROL-
 LING STOCKHOLDER" MEANS THE CORPORATION THAT INDIRECTLY OWNS OR CONTROLS
 OVER FIFTY PERCENT OF THE VOTING STOCK OF A CAPTIVE REIT OR CAPTIVE RIC,
 IS SUBJECT TO TAX UNDER THIS ARTICLE, ARTICLE NINE-A OR ARTICLE  THIRTY-
 THREE OF THIS CHAPTER OR OTHERWISE REQUIRED TO BE INCLUDED IN A COMBINED
 RETURN  UNDER  THIS  ARTICLE,  ARTICLE NINE-A OR ARTICLE THIRTY-THREE OF
 THIS CHAPTER, AND IS THE FEWEST TIERS OF CORPORATIONS AWAY IN THE OWNER-
 SHIP STRUCTURE FROM THE CAPTIVE REIT OR CAPTIVE RIC. THE COMMISSIONER IS
 AUTHORIZED TO PRESCRIBE BY REGULATION OR PUBLISHED GUIDANCE THE CRITERIA
 FOR DETERMINING THE CLOSEST CONTROLLING STOCKHOLDER.
   (B) A CAPTIVE REIT OR A CAPTIVE RIC MUST BE  INCLUDED  IN  A  COMBINED
 RETURN WITH THE BANKING CORPORATION OR BANK HOLDING COMPANY THAT DIRECT-
 LY  OWNS  OR  CONTROLS  OVER  FIFTY  PERCENT  OF THE VOTING STOCK OF THE
 CAPTIVE REIT OR CAPTIVE RIC IF THAT BANKING CORPORATION OR BANK  HOLDING
 COMPANY  IS  SUBJECT  TO  TAX  OR  REQUIRED TO BE INCLUDED IN A COMBINED
 RETURN UNDER THIS ARTICLE.
   (C) IF OVER FIFTY PERCENT OF THE VOTING STOCK OF  A  CAPTIVE  REIT  OR
 CAPTIVE RIC IS NOT DIRECTLY OWNED OR CONTROLLED BY A BANKING CORPORATION
 OR  BANK  HOLDING  COMPANY  THAT  IS  SUBJECT  TO  TAX OR REQUIRED TO BE
 INCLUDED IN A COMBINED RETURN UNDER THIS ARTICLE, THEN THE CAPTIVE  REIT
 OR  CAPTIVE RIC MUST BE INCLUDED IN A COMBINED RETURN OR REPORT WITH THE
 CORPORATION THAT IS THE CLOSEST CONTROLLING STOCKHOLDER OF  THE  CAPTIVE
 REIT  OR  CAPTIVE  RIC.  IF  THE  CLOSEST CONTROLLING STOCKHOLDER OF THE
 CAPTIVE REIT OR CAPTIVE RIC IS A BANKING  CORPORATION  OR  BANK  HOLDING
 COMPANY THAT IS SUBJECT TO TAX OR OTHERWISE REQUIRED TO BE INCLUDED IN A
 COMBINED RETURN UNDER THIS ARTICLE, THEN THE CAPTIVE REIT OR CAPTIVE RIC
 MUST BE INCLUDED IN A COMBINED RETURN UNDER THIS ARTICLE.
   (D)  IF  THE  CORPORATION  WHICH  DIRECTLY OWNS OR CONTROLS THE VOTING
 STOCK OF THE CAPTIVE REIT OR CAPTIVE RIC IS  DESCRIBED  IN  SUBPARAGRAPH
 (II)  OR  (IV) OF PARAGRAPH FOUR OF THIS SUBSECTION AS A CORPORATION NOT
 PERMITTED TO MAKE A COMBINED RETURN, THEN THE PROVISIONS IN  CLAUSE  (C)
 OF  THIS  SUBPARAGRAPH  MUST  BE APPLIED TO DETERMINE THE CORPORATION IN
 WHOSE COMBINED RETURN OR REPORT THE CAPTIVE REIT OR CAPTIVE  RIC  SHOULD
 BE  INCLUDED. IF, UNDER CLAUSE (C) OF THIS SUBPARAGRAPH, THE CORPORATION
 THAT IS THE CLOSEST CONTROLLING  STOCKHOLDER  OF  THE  CAPTIVE  REIT  OR
 CAPTIVE  RIC IS DESCRIBED IN SUBPARAGRAPH (II) OR (IV) OF PARAGRAPH FOUR
 OF THIS SUBSECTION AS A CORPORATION NOT PERMITTED  TO  MAKE  A  COMBINED
 RETURN,  THEN  THAT  CORPORATION  IS  DEEMED  TO NOT BE IN THE OWNERSHIP
 STRUCTURE OF THE CAPTIVE REIT OR CAPTIVE RIC, AND THE  CLOSEST  CONTROL-
 LING STOCKHOLDER WILL BE DETERMINED WITHOUT REGARD TO THAT CORPORATION.
   (E)  IF  A  CAPTIVE REIT OWNS THE STOCK OF A QUALIFIED REIT SUBSIDIARY
 (AS DEFINED IN PARAGRAPH TWO OF SUBSECTION (I) OF SECTION EIGHT  HUNDRED
 FIFTY-SIX OF THE INTERNAL REVENUE CODE), THEN THE QUALIFIED REIT SUBSID-
 IARY  MUST BE INCLUDED IN ANY COMBINED RETURN REQUIRED TO BE MADE BY THE
 CAPTIVE REIT THAT OWNS ITS STOCK.
   (F) IF A CAPTIVE REIT OR A CAPTIVE RIC IS REQUIRED UNDER THIS SUBPARA-
 GRAPH TO BE INCLUDED IN A COMBINED RETURN WITH ANOTHER CORPORATION,  AND
 THAT  OTHER  CORPORATION IS REQUIRED TO BE INCLUDED IN A COMBINED RETURN
 WITH ANOTHER CORPORATION UNDER OTHER PROVISIONS OF THIS SUBSECTION,  THE
 CAPTIVE  REIT  OR  CAPTIVE  RIC MUST BE INCLUDED IN THAT COMBINED RETURN
 WITH THOSE CORPORATIONS.
   (G) IF THE BANKING CORPORATION OR BANK HOLDING COMPANY  THAT  DIRECTLY
 OR INDIRECTLY OWNS OR CONTROLS OVER FIFTY PERCENT OF THE VOTING STOCK OF
 THE  CAPTIVE  REIT  OR CAPTIVE RIC AND IS THE CLOSEST CONTROLLING STOCK-

 S. 1680                            82
 
 HOLDER OF THE CAPTIVE REIT OR CAPTIVE RIC IS A MEMBER OF  AN  AFFILIATED
 GROUP  (1)  THAT  DOES  NOT INCLUDE ANY CORPORATION THAT IS ENGAGED IN A
 BUSINESS THAT A SUBSIDIARY OF  A  BANK  HOLDING  COMPANY  WOULD  NOT  BE
 PERMITTED  TO  ENGAGE  IN,  UNLESS  SUCH BUSINESS IS DE MINIMUS, AND (2)
 WHOSE MEMBERS OWN ASSETS THE COMBINED AVERAGE VALUE OF  WHICH  DOES  NOT
 EXCEED  EIGHT BILLION DOLLARS, THEN THE CAPTIVE REIT OR CAPTIVE RIC MUST
 NOT BE INCLUDED IN A COMBINED  RETURN  UNDER  THIS  ARTICLE  OR  ARTICLE
 NINE-A  OR  ARTICLE  THIRTY-THREE OF THIS CHAPTER. IN THAT INSTANCE, THE
 CAPTIVE REIT OR CAPTIVE RIC IS SUBJECT TO THE PROVISIONS OF  SUBDIVISION
 FIVE  OR  SEVEN  OF  SECTION  TWO HUNDRED NINE OF THIS CHAPTER. THE TERM
 "AFFILIATED GROUP"  MEANS  "AFFILIATED  GROUP"  AS  DEFINED  IN  SECTION
 FIFTEEN HUNDRED FOUR OF THE INTERNAL REVENUE CODE, BUT WITHOUT REGARD TO
 THE EXCEPTIONS PROVIDED FOR IN SUBSECTION (B) OF THAT SECTION.
   (VII)  (A)  FOR  PURPOSES  OF  THIS  SUBPARAGRAPH,  THE  TERM "CLOSEST
 CONTROLLING STOCKHOLDER" MEANS THE CORPORATION THAT INDIRECTLY  OWNS  OR
 CONTROLS  OVER  FIFTY  PERCENT OF THE VOTING STOCK OF AN OVERCAPITALIZED
 CAPTIVE INSURANCE COMPANY, IS SUBJECT TO TAX UNDER THIS ARTICLE OR ARTI-
 CLE NINE-A OF THIS CHAPTER OR OTHERWISE REQUIRED TO  BE  INCLUDED  IN  A
 COMBINED  RETURN  UNDER  THIS ARTICLE OR ARTICLE NINE-A OF THIS CHAPTER,
 AND IS THE FEWEST TIERS OF CORPORATIONS AWAY IN THE OWNERSHIP  STRUCTURE
 FROM  THE OVERCAPITALIZED CAPTIVE INSURANCE COMPANY. THE COMMISSIONER IS
 AUTHORIZED TO PRESCRIBE BY REGULATION OR PUBLISHED GUIDANCE THE CRITERIA
 FOR DETERMINING THE CLOSEST CONTROLLING STOCKHOLDER.
   (B) AN OVERCAPITALIZED CAPTIVE INSURANCE COMPANY MUST BE INCLUDED IN A
 COMBINED RETURN WITH THE BANKING CORPORATION  OR  BANK  HOLDING  COMPANY
 THAT DIRECTLY OWNS OR CONTROLS OVER FIFTY PERCENT OF THE VOTING STOCK OF
 THE  OVERCAPITALIZED  CAPTIVE  INSURANCE  COMPANY IF THAT BANKING CORPO-
 RATION OR BANK HOLDING COMPANY IS SUBJECT  TO  TAX  OR  REQUIRED  TO  BE
 INCLUDED IN A COMBINED RETURN UNDER THIS ARTICLE.
   (C)  IF  OVER  FIFTY PERCENT OF THE VOTING STOCK OF AN OVERCAPITALIZED
 CAPTIVE INSURANCE COMPANY IS NOT DIRECTLY OWNED OR CONTROLLED BY A BANK-
 ING CORPORATION OR BANK HOLDING  COMPANY  THAT  IS  SUBJECT  TO  TAX  OR
 REQUIRED  TO  BE  INCLUDED IN A COMBINED RETURN UNDER THIS ARTICLE, THEN
 THE OVERCAPITALIZED CAPTIVE INSURANCE COMPANY  MUST  BE  INCLUDED  IN  A
 COMBINED  RETURN  OR  REPORT  WITH  THE  CORPORATION THAT IS THE CLOSEST
 CONTROLLING STOCKHOLDER OF THE OVERCAPITALIZED CAPTIVE INSURANCE  COMPA-
 NY.  IF  THE  CLOSEST  CONTROLLING  STOCKHOLDER  OF  THE OVERCAPITALIZED
 CAPTIVE INSURANCE COMPANY IS  A  BANKING  CORPORATION  OR  BANK  HOLDING
 COMPANY THAT IS SUBJECT TO TAX OR OTHERWISE REQUIRED TO BE INCLUDED IN A
 COMBINED  RETURN  UNDER  THIS  ARTICLE, THEN THE OVERCAPITALIZED CAPTIVE
 INSURANCE COMPANY MUST BE INCLUDED IN A COMBINED RETURN UNDER THIS ARTI-
 CLE.
   (D) IF THE CORPORATION THAT DIRECTLY OWNS OR CONTROLS THE VOTING STOCK
 OF THE OVERCAPITALIZED CAPTIVE INSURANCE COMPANY IS DESCRIBED IN SUBPAR-
 AGRAPH (II) OR (IV) OF PARAGRAPH FOUR OF THIS  SUBSECTION  AS  A  CORPO-
 RATION  NOT  PERMITTED TO MAKE A COMBINED RETURN, THEN THE PROVISIONS IN
 CLAUSE (C) OF THIS SUBPARAGRAPH MUST BE APPLIED TO DETERMINE THE  CORPO-
 RATION  IN  WHOSE  COMBINED RETURN OR REPORT THE OVERCAPITALIZED CAPTIVE
 INSURANCE COMPANY SHOULD BE INCLUDED.  IF,  UNDER  CLAUSE  (C)  OF  THIS
 SUBPARAGRAPH, THE CORPORATION THAT IS THE CLOSEST CONTROLLING STOCKHOLD-
 ER  OF  THE  OVERCAPITALIZED  CAPTIVE  INSURANCE COMPANY IS DESCRIBED IN
 SUBPARAGRAPH (II) OR (IV) OF PARAGRAPH FOUR  OF  THIS  SUBSECTION  AS  A
 CORPORATION  NOT  PERMITTED  TO MAKE A COMBINED RETURN, THEN THAT CORPO-
 RATION IS DEEMED NOT TO BE IN THE OWNERSHIP STRUCTURE OF  THE  OVERCAPI-
 TALIZED  CAPTIVE  INSURANCE  COMPANY, AND THE CLOSEST CONTROLLING STOCK-
 HOLDER WILL BE DETERMINED WITHOUT REGARD TO THAT CORPORATION.

 S. 1680                            83
 
   (E) IF AN OVERCAPITALIZED CAPTIVE INSURANCE COMPANY IS REQUIRED  UNDER
 THIS  SUBPARAGRAPH  TO  BE  INCLUDED  IN  A COMBINED RETURN WITH ANOTHER
 CORPORATION, AND THAT OTHER CORPORATION IS REQUIRED TO BE INCLUDED IN  A
 COMBINED  RETURN WITH ANOTHER CORPORATION UNDER OTHER PROVISIONS OF THIS
 SUBSECTION,  THE  OVERCAPITALIZED  CAPTIVE  INSURANCE  COMPANY  MUST  BE
 INCLUDED IN THAT COMBINED RETURN WITH THOSE CORPORATIONS.
   (3) (I) IN THE CASE OF A COMBINED RETURN, THE TAX SHALL BE MEASURED BY
 THE COMBINED ENTIRE NET INCOME, COMBINED ALTERNATIVE ENTIRE  NET  INCOME
 OR  COMBINED  ASSETS  OF  ALL  THE  CORPORATIONS INCLUDED IN THE RETURN,
 INCLUDING ANY CAPTIVE  REIT,  CAPTIVE  RIC  OR  OVERCAPITALIZED  CAPTIVE
 INSURANCE  COMPANY. THE ALLOCATION PERCENTAGE SHALL BE COMPUTED BASED ON
 THE COMBINED FACTORS WITH RESPECT TO ALL THE  CORPORATIONS  INCLUDED  IN
 THE  COMBINED  RETURN.  IN  COMPUTING  COMBINED  ENTIRE  NET  INCOME AND
 COMBINED ALTERNATIVE ENTIRE NET INCOME INTERCORPORATE DIVIDENDS AND  ALL
 OTHER  INTERCORPORATE  TRANSACTIONS SHALL BE ELIMINATED AND IN COMPUTING
 COMBINED ASSETS INTERCORPORATE STOCKHOLDINGS AND  INTERCORPORATE  BILLS,
 NOTES  AND  ACCOUNTS  RECEIVABLE  AND  PAYABLE  AND OTHER INTERCORPORATE
 INDEBTEDNESS SHALL BE ELIMINATED.
   (II) IN THE CASE OF A CAPTIVE REIT REQUIRED UNDER THIS  SUBSECTION  TO
 BE INCLUDED IN A COMBINED RETURN, "ENTIRE NET INCOME" MEANS "REAL ESTATE
 INVESTMENT TRUST TAXABLE INCOME" AS DEFINED IN PARAGRAPH TWO OF SUBDIVI-
 SION  (B)  OF  SECTION EIGHT HUNDRED FIFTY-SEVEN (AS MODIFIED BY SECTION
 EIGHT HUNDRED FIFTY-EIGHT) OF THE INTERNAL REVENUE CODE, PLUS THE AMOUNT
 TAXABLE UNDER PARAGRAPH  THREE  OF  SUBDIVISION  (B)  OF  SECTION  EIGHT
 HUNDRED  FIFTY-SEVEN OF THAT CODE, SUBJECT TO THE MODIFICATIONS REQUIRED
 BY SECTION FOURTEEN HUNDRED FIFTY-THREE OF THIS ARTICLE. IN THE CASE  OF
 A  CAPTIVE  RIC  REQUIRED  UNDER  THIS  SUBSECTION  TO  BE INCLUDED IN A
 COMBINED RETURN, "ENTIRE NET INCOME" MEANS "INVESTMENT  COMPANY  TAXABLE
 INCOME"  AS DEFINED IN PARAGRAPH TWO OF SUBDIVISION (B) OF SECTION EIGHT
 HUNDRED FIFTY-TWO (AS MODIFIED BY SECTION EIGHT HUNDRED  FIFTY-FIVE)  OF
 THE INTERNAL REVENUE CODE, PLUS THE AMOUNT TAXABLE UNDER PARAGRAPH THREE
 OF  SUBDIVISION  (B)  OF  SECTION  EIGHT HUNDRED FIFTY-TWO OF THAT CODE,
 SUBJECT TO  THE  MODIFICATIONS  REQUIRED  BY  SECTION  FOURTEEN  HUNDRED
 FIFTY-THREE  OF  THIS ARTICLE. HOWEVER, THE DEDUCTION UNDER THE INTERNAL
 REVENUE CODE FOR DIVIDENDS PAID BY THE CAPTIVE REIT OR  CAPTIVE  RIC  TO
 ANY  MEMBER  OF  THE AFFILIATED GROUP THAT INCLUDES THE CORPORATION THAT
 DIRECTLY OR INDIRECTLY OWNS OVER FIFTY PERCENT OF THE  VOTING  STOCK  OF
 THE  CAPTIVE  REIT  OR  CAPTIVE  RIC  WILL  BE  LIMITED TO THE FOLLOWING
 PERCENTAGES: (A) FIFTY PERCENT FOR TAXABLE YEARS BEGINNING ON  OR  AFTER
 JANUARY FIRST, TWO THOUSAND EIGHT AND BEFORE JANUARY FIRST, TWO THOUSAND
 NINE;  (B)  TWENTY-FIVE  PERCENT FOR TAXABLE YEARS BEGINNING ON OR AFTER
 JANUARY FIRST, TWO THOUSAND NINE AND BEFORE JANUARY FIRST, TWO  THOUSAND
 ELEVEN;  AND  (C)  ZERO  PERCENT FOR TAXABLE YEARS BEGINNING ON OR AFTER
 JANUARY FIRST, TWO THOUSAND ELEVEN. THE TERM  "AFFILIATED  GROUP"  MEANS
 "AFFILIATED  GROUP"  AS  DEFINED  IN SECTION FIFTEEN HUNDRED FOUR OF THE
 INTERNAL REVENUE CODE, BUT WITHOUT REGARD TO THE EXCEPTIONS PROVIDED FOR
 IN SUBSECTION (B) OF SUCH SECTION FIFTEEN HUNDRED FOUR.
   (III) IN THE CASE OF  AN  OVERCAPITALIZED  CAPTIVE  INSURANCE  COMPANY
 REQUIRED  UNDER  THIS  SUBSECTION  TO  BE INCLUDED IN A COMBINED RETURN,
 ENTIRE NET INCOME MUST BE  COMPUTED  AS  REQUIRED  BY  SECTION  FOURTEEN
 HUNDRED FIFTY-THREE OF THIS ARTICLE.
   (4)  (I)  IN  NO  EVENT SHALL AN ITEM OF INCOME OR EXPENSE OF A CORPO-
 RATION ORGANIZED UNDER THE LAWS OF  A  COUNTRY  OTHER  THAN  THE  UNITED
 STATES  BE  INCLUDED  IN  A  COMBINED  RETURN UNLESS IT IS INCLUDIBLE IN
 ENTIRE NET INCOME OR ALTERNATIVE ENTIRE NET INCOME, AS THE CASE MAY  BE,

 S. 1680                            84
 
 NOR  SHALL  AN  ASSET  OF  SUCH  A CORPORATION BE INCLUDED IN A COMBINED
 RETURN UNLESS IT IS INCLUDED IN TAXABLE ASSETS.
   (II)  IN  NO EVENT SHALL A CORPORATION ORGANIZED UNDER THE LAWS OF THE
 UNITED STATES, THIS STATE OR ANY OTHER STATE, BE INCLUDED IN A  COMBINED
 RETURN  WITH  A  CORPORATION ORGANIZED UNDER THE LAWS OF A COUNTRY OTHER
 THAN THE UNITED STATES.
   (III) IN NO EVENT SHALL A  CORPORATION  WHICH  HAS  MADE  AN  ELECTION
 PURSUANT TO SUBSECTION (D) OF SECTION FOURTEEN HUNDRED FIFTY-TWO OF THIS
 ARTICLE TO BE SUBJECT TO THE TAX IMPOSED BY ARTICLE NINE-A OF THIS CHAP-
 TER  BE  INCLUDED IN A COMBINED RETURN FOR THOSE TAXABLE YEARS FOR WHICH
 IT IS SUBJECT TO THE TAX IMPOSED BY ARTICLE NINE-A OF THIS CHAPTER.
   (IV) IN NO EVENT SHALL A CORPORATION WHOSE NET  WORTH  RATIO  IS  LESS
 THAN  FIVE  PERCENT AND WHOSE TOTAL ASSETS ARE COMPRISED OF THIRTY-THREE
 PERCENT OR MORE OF MORTGAGES BE INCLUDED IN A COMBINED RETURN FOR  THOSE
 TAXABLE  YEARS  FOR WHICH ITS TAX IS DETERMINED PURSUANT TO SUBPARAGRAPH
 (II) OR (III) OF PARAGRAPH ONE OF SUBSECTION  (B)  OF  SECTION  FOURTEEN
 HUNDRED FIFTY-FIVE OF THIS ARTICLE.
   (5)  TAX  LIABILITY  UNDER THIS ARTICLE MAY BE DEEMED TO BE IMPROPERLY
 REFLECTED BECAUSE OF INTERCOMPANY TRANSACTIONS OR SOME AGREEMENT, UNDER-
 STANDING, ARRANGEMENT OR TRANSACTION REFERRED TO IN  SUBSECTION  (G)  OF
 THIS SECTION.
   (G)  IN CASE IT SHALL APPEAR TO THE TAX COMMISSION THAT ANY AGREEMENT,
 UNDERSTANDING OR ARRANGEMENT EXISTS BETWEEN THE TAXPAYER AND  ANY  OTHER
 CORPORATION  OR  ANY  PERSON  OR  FIRM,  WHEREBY THE ACTIVITY, BUSINESS,
 INCOME OR ASSETS OF THE TAXPAYER WITHIN THE STATE IS IMPROPERLY OR INAC-
 CURATELY REFLECTED, THE TAX COMMISSION IS AUTHORIZED AND  EMPOWERED,  IN
 ITS  DISCRETION  AND IN SUCH MANNER AS IT MAY DETERMINE, TO ADJUST ITEMS
 OF INCOME OR DEDUCTIONS IN COMPUTING ENTIRE NET  INCOME  OR  ALTERNATIVE
 ENTIRE  NET  INCOME  AND TO ADJUST ASSETS, AND TO ADJUST WAGES, SALARIES
 AND OTHER PERSONAL SERVICE COMPENSATION, RECEIPTS OR DEPOSITS IN COMPUT-
 ING ANY ALLOCATION PERCENTAGE, PROVIDED ONLY THAT ENTIRE NET  INCOME  OR
 ALTERNATIVE ENTIRE NET INCOME BE ADJUSTED ACCORDINGLY AND THAT ANY ASSET
 DIRECTLY  TRACEABLE TO THE ELIMINATION OF ANY RECEIPT BE ELIMINATED FROM
 ASSETS SO AS TO ACCURATELY DETERMINE THE TAX. IF HOWEVER, IN THE  DETER-
 MINATION  OF  THE  TAX  COMMISSION,  SUCH  ADJUSTMENTS DO NOT, OR CANNOT
 EFFECTIVELY PROVIDE FOR THE  ACCURATE  DETERMINATION  OF  THE  TAX,  THE
 COMMISSION  SHALL  BE  AUTHORIZED  TO  REQUIRE  THE FILING OF A COMBINED
 REPORT BY THE TAXPAYER AND ANY SUCH OTHER CORPORATIONS.  WHERE  (1)  ANY
 TAXPAYER CONDUCTS ITS ACTIVITY OR BUSINESS UNDER ANY AGREEMENT, ARRANGE-
 MENT OR UNDERSTANDING IN SUCH MANNER AS EITHER DIRECTLY OR INDIRECTLY TO
 BENEFIT  ITS  MEMBERS  OR STOCKHOLDERS, OR ANY OF THEM, OR ANY PERSON OR
 PERSONS DIRECTLY OR INDIRECTLY INTERESTED IN SUCH ACTIVITY OR  BUSINESS,
 BY  ENTERING  INTO  ANY  TRANSACTION  AT  MORE OR LESS THAN A FAIR PRICE
 WHICH, BUT FOR SUCH AGREEMENT, ARRANGEMENT OR UNDERSTANDING, MIGHT  HAVE
 BEEN  PAID  OR  RECEIVED  THEREFOR,  OR (2) ANY TAXPAYER ENTERS INTO ANY
 TRANSACTION WITH ANOTHER CORPORATION ON  SUCH  TERMS  AS  TO  CREATE  AN
 IMPROPER  LOSS  OR  NET  INCOME,  THE  TAX COMMISSION MAY INCLUDE IN THE
 ENTIRE NET INCOME OR ALTERNATIVE ENTIRE NET INCOME OF THE  TAXPAYER  THE
 FAIR  PROFITS  WHICH, BUT FOR SUCH AGREEMENT, ARRANGEMENT OR UNDERSTAND-
 ING, THE TAXPAYER MIGHT HAVE DERIVED FROM SUCH TRANSACTION.
   § 1463. PAYMENT OF TAX. (A) TO THE EXTENT THE TAX IMPOSED  BY  SECTION
 FOURTEEN HUNDRED FIFTY-ONE OF THIS ARTICLE SHALL NOT HAVE BEEN PREVIOUS-
 LY PAID PURSUANT TO SECTION FOURTEEN HUNDRED SIXTY-ONE,
   (1)  SUCH  TAX,  OR  THE  BALANCE THEREOF, SHALL BE PAYABLE TO THE TAX
 COMMISSION IN FULL AT THE TIME ITS RETURN IS REQUIRED TO BE FILED, AND

 S. 1680                            85
 
   (2) SUCH TAX, OR THE BALANCE THEREOF, IMPOSED ON  ANY  TAXPAYER  WHICH
 CEASED  TO EXERCISE ITS FRANCHISE OR TO BE SUBJECT TO THE TAX IMPOSED BY
 THIS ARTICLE SHALL BE PAYABLE TO THE TAX  COMMISSION  AT  THE  TIME  THE
 RETURN  IS  REQUIRED TO BE FILED, PROVIDED SUCH TAX OF A DOMESTIC CORPO-
 RATION  WHICH  CONTINUES  TO  POSSESS  ITS FRANCHISE SHALL BE SUBJECT TO
 ADJUSTMENT AS THE CIRCUMSTANCES MAY REQUIRE; ALL OTHER TAXES OF ANY SUCH
 TAXPAYER, WHICH PURSUANT TO THE FOREGOING PROVISIONS OF THIS  SUBSECTION
 WOULD  OTHERWISE  BE  PAYABLE  SUBSEQUENT  TO  THE  TIME  SUCH RETURN IS
 REQUIRED TO BE FILED, SHALL NEVERTHELESS BE PAYABLE AT SUCH TIME.
   (B) IF THE TAXPAYER, WITHIN THE TIME PRESCRIBED BY SUBSECTION  (C)  OF
 SECTION  FOURTEEN  HUNDRED SIXTY-TWO OF THIS ARTICLE, SHALL HAVE APPLIED
 FOR AN AUTOMATIC EXTENSION OF TIME TO FILE ITS ANNUAL RETURN  AND  SHALL
 HAVE  PAID  TO THE COMMISSIONER OF TAXATION AND FINANCE ON OR BEFORE THE
 DATE SUCH APPLICATION IS FILED AN AMOUNT PROPERLY ESTIMATED AS  PROVIDED
 BY  SAID SUBSECTION THE ONLY AMOUNT PAYABLE IN ADDITION TO THE TAX SHALL
 BE INTEREST AT THE UNDERPAYMENT RATE SET BY THE COMMISSIONER PURSUANT TO
 SECTION ONE THOUSAND NINETY-SIX OF THIS CHAPTER, OR IF NO RATE  IS  SET,
 AT  THE RATE OF SIX PER CENT PER ANNUM UPON THE AMOUNT BY WHICH THE TAX,
 OR PORTION THEREOF PAYABLE ON OR BEFORE THE DATE THE RETURN WAS REQUIRED
 TO BE FILED, EXCEEDS THE AMOUNT SO PAID. FOR THE PURPOSES OF THE PRECED-
 ING SENTENCE:
   (1) AN AMOUNT SO PAID SHALL BE DEEMED  PROPERLY  ESTIMATED  IF  IT  IS
 EITHER  (I)  NOT  LESS THAN NINETY PER CENT OF THE TAX AS FINALLY DETER-
 MINED, OR (II) NOT LESS THAN THE TAX SHOWN ON THE TAXPAYER'S RETURN  FOR
 THE PRECEDING TAXABLE YEAR, IF SUCH PRECEDING YEAR WAS A TAXABLE YEAR OF
 TWELVE MONTHS; AND
   (2) THE TIME WHEN A RETURN IS REQUIRED TO BE FILED SHALL BE DETERMINED
 WITHOUT REGARD TO ANY EXTENSION OF TIME FOR FILING SUCH RETURN.
   (C)  THE  TAX  COMMISSION MAY GRANT A REASONABLE EXTENSION OF TIME FOR
 PAYMENT OF ANY TAX IMPOSED BY THIS ARTICLE UNDER SUCH CONDITIONS  AS  IT
 DEEMS JUST AND PROPER.
   §  1466.  DEPOSIT  AND DISPOSITION OF REVENUE. ALL TAXES, INTEREST AND
 PENALTIES COLLECTED OR RECEIVED BY THE TAX COMMISSION UNDER THIS ARTICLE
 SHALL BE DEPOSITED AND DISPOSED OF PURSUANT TO THE PROVISIONS OF SECTION
 ONE HUNDRED SEVENTY-ONE-A OF THIS CHAPTER.
   § 1467. SECRECY REQUIRED OF  OFFICIALS;  PENALTY  FOR  VIOLATION.  (A)
 EXCEPT  IN  ACCORDANCE  WITH  THE  PROPER JUDICIAL ORDER OR AS OTHERWISE
 PROVIDED BY LAW, IT SHALL BE UNLAWFUL FOR THE COMMISSIONER  OF  TAXATION
 AND  FINANCE,  ANY OFFICER OR EMPLOYEE OF THE DEPARTMENT OF TAXATION AND
 FINANCE, OR ANY PERSON WHO, PURSUANT TO THIS SECTION,  IS  PERMITTED  TO
 INSPECT ANY RETURN, OR ANY PERSON ENGAGED OR RETAINED BY SUCH DEPARTMENT
 ON  AN  INDEPENDENT  CONTRACT BASIS, OR ANY PERSON WHO IN ANY MANNER MAY
 ACQUIRE KNOWLEDGE OF THE CONTENTS OF A RETURN  FILED  PURSUANT  TO  THIS
 ARTICLE,  TO DIVULGE OR MAKE KNOWN IN ANY MANNER THE AMOUNT OF INCOME OR
 ANY PARTICULARS SET FORTH OR DISCLOSED IN ANY RETURN REQUIRED UNDER THIS
 ARTICLE. THE OFFICERS CHARGED WITH THE CUSTODY OF SUCH RETURNS SHALL NOT
 BE REQUIRED TO PRODUCE ANY OF THEM OR EVIDENCE OF ANYTHING CONTAINED  IN
 THEM  IN ANY ACTION OR PROCEEDINGS IN ANY COURT, EXCEPT ON BEHALF OF THE
 STATE OR THE COMMISSIONER OF  TAXATION  AND  FINANCE  IN  AN  ACTION  OR
 PROCEEDING  UNDER  THE PROVISIONS OF THIS CHAPTER OR IN ANY OTHER ACTION
 OR PROCEEDING INVOLVING THE COLLECTION OF A TAX DUE UNDER  THIS  CHAPTER
 TO  WHICH  THE  STATE  OR  THE COMMISSIONER OF TAXATION AND FINANCE IS A
 PARTY OR A CLAIMANT OR ON BEHALF OF ANY PARTY IN AN ACTION OR PROCEEDING
 UNDER THE PROVISIONS OF THIS ARTICLE WHEN THE  RETURNS  OR  FACTS  SHOWN
 THEREBY  ARE  DIRECTLY  INVOLVED IN SUCH ACTION OR PROCEEDING, IN ANY OF
 WHICH EVENTS THE COURT MAY REQUIRE THE PRODUCTION OF AND  MAY  ADMIT  IN

 S. 1680                            86
 
 EVIDENCE  SO  MUCH  OF  SAID  RETURNS  OR THE FACTS SHOWN THEREBY AS ARE
 PERTINENT TO THE ACTION OR PROCEEDING AND NO MORE. THE  COMMISSIONER  OF
 TAXATION  AND  FINANCE MAY, NEVERTHELESS, PUBLISH A COPY OR A SUMMARY OF
 ANY DETERMINATION OR DECISION RENDERED AFTER THE HEARING PROVIDED FOR IN
 SECTION  ONE  THOUSAND EIGHTY-NINE OF THIS CHAPTER. NOTHING HEREIN SHALL
 BE CONSTRUED TO PROHIBIT THE DELIVERY TO A TAXPAYER OR ITS DULY  AUTHOR-
 IZED  REPRESENTATIVE  OF  A  CERTIFIED  COPY  OF  ANY  RETURN  FILED  IN
 CONNECTION WITH ITS TAX NOR TO PROHIBIT THE PUBLICATION OF STATISTICS SO
 CLASSIFIED AS TO PREVENT THE IDENTIFICATION OF  PARTICULAR  RETURNS  AND
 THE  ITEMS  THEREOF,  OR THE INSPECTION BY THE ATTORNEY-GENERAL OR OTHER
 LEGAL REPRESENTATIVES OF THE STATE OF THE RETURN OF ANY  TAXPAYER  WHICH
 SHALL  BRING  ACTION  TO  SET  ASIDE OR REVIEW THE TAX BASED THEREON, OR
 AGAINST WHICH AN ACTION OR PROCEEDING UNDER THIS CHAPTER HAS BEEN RECOM-
 MENDED BY THE COMMISSIONER OF TAXATION AND FINANCE OR THE  ATTORNEY-GEN-
 ERAL  OR  HAS  BEEN  INSTITUTED; OR THE INSPECTION OF THE RETURNS OF ANY
 TAXPAYER BY THE COMPTROLLER OR DULY DESIGNATED OFFICER  OR  EMPLOYEE  OF
 THE STATE DEPARTMENT OF AUDIT AND CONTROL FOR PURPOSES OF THE AUDIT OF A
 REFUND  OF  ANY  TAX  PAID  BY  SUCH TAXPAYER UNDER THIS ARTICLE, OR THE
 DISCLOSING TO A STATE AGENCY, PURSUANT TO SECTION ONE  HUNDRED  SEVENTY-
 ONE-F  OF  THIS  CHAPTER,  OF  THE AMOUNT OF AN OVERPAYMENT AND INTEREST
 THEREON CERTIFIED TO THE COMPTROLLER TO BE CREDITED AGAINST  A  PAST-DUE
 LEGALLY  ENFORCEABLE  DEBT OWED TO SUCH AGENCY AND OF THE NAME AND IDEN-
 TIFICATION NUMBER OF THE TAXPAYER WHO  MADE  SUCH  OVERPAYMENT,  OR  THE
 DISCLOSING  TO  THE  COMMISSIONER  OF  FINANCE  OF THE CITY OF NEW YORK,
 PURSUANT TO SECTION ONE HUNDRED SEVENTY-ONE-L OF THIS  CHAPTER,  OF  THE
 AMOUNT  OF  AN  OVERPAYMENT  AND INTEREST THEREON CERTIFIED TO THE COMP-
 TROLLER TO BE CREDITED AGAINST A CITY OF NEW YORK TAX  WARRANT  JUDGMENT
 DEBT  AND OF THE NAME AND IDENTIFICATION NUMBER OF THE TAXPAYER WHO MADE
 SUCH OVERPAYMENT. RETURNS SHALL BE PRESERVED FOR THREE YEARS AND  THERE-
 AFTER  UNTIL  THE COMMISSIONER OF TAXATION AND FINANCE ORDERS THEM TO BE
 DESTROYED.
   (B) (1) ANY OFFICER OR EMPLOYEE OF THE STATE  WHO  WILLFULLY  VIOLATES
 THE PROVISIONS OF SUBSECTION (A) OF THIS SECTION SHALL BE DISMISSED FROM
 OFFICE AND BE INCAPABLE OF HOLDING ANY PUBLIC OFFICE IN THIS STATE FOR A
 PERIOD OF FIVE YEARS THEREAFTER.
   (2)  CROSS-REFERENCE: FOR CRIMINAL PENALTIES, SEE ARTICLE THIRTY-SEVEN
 OF THIS CHAPTER.
   (C) NOTWITHSTANDING ANY PROVISIONS OF THIS SECTION, THE TAX COMMISSION
 MAY PERMIT THE SECRETARY OF THE TREASURY OF THE  UNITED  STATES  OR  HIS
 DELEGATES,  OR  THE  PROPER  OFFICER OF ANY OTHER STATE CHARGED WITH TAX
 ADMINISTRATION, OR THE AUTHORIZED REPRESENTATIVE OF EITHER SUCH OFFICER,
 TO INSPECT THE RETURNS FILED UNDER THIS ARTICLE, OR MAY FURNISH TO  SUCH
 OFFICER  OR  HIS  AUTHORIZED REPRESENTATIVE AN ABSTRACT OF ANY RETURN OR
 SUPPLY HIM WITH INFORMATION CONCERNING AN ITEM CONTAINED IN ANY  RETURN,
 OR  DISCLOSED  BY  AN INVESTIGATION OF TAX LIABILITY UNDER THIS ARTICLE,
 BUT SUCH PERMISSION SHALL BE GRANTED OR SUCH  INFORMATION  FURNISHED  TO
 SUCH OFFICER OR HIS REPRESENTATIVE ONLY IF THE LAWS OF THE UNITED STATES
 OR  OF SUCH OTHER STATE, AS THE CASE MAY BE, GRANT SUBSTANTIALLY SIMILAR
 PRIVILEGES TO THE COMMISSION OR OFFICER OF THIS STATE CHARGED  WITH  THE
 ADMINISTRATION  OF  THE TAX IMPOSED BY THIS ARTICLE AND SUCH INFORMATION
 IS TO BE USED FOR TAX PURPOSES ONLY; AND PROVIDED  FURTHER  THE  COMMIS-
 SIONER OF TAXATION AND FINANCE MAY FURNISH TO THE SECRETARY OF THE TREA-
 SURY OF THE UNITED STATES OR HIS DELEGATES SUCH RETURNS FILED UNDER THIS
 ARTICLE AND OTHER TAX INFORMATION, AS HE MAY CONSIDER PROPER, FOR USE IN
 COURT  ACTIONS  OR  PROCEEDINGS UNDER THE INTERNAL REVENUE CODE, WHETHER
 CIVIL OR CRIMINAL, WHERE A WRITTEN REQUEST THEREFOR HAS BEEN MADE TO THE

 S. 1680                            87
 
 COMMISSIONER OF TAXATION AND FINANCE BY THE SECRETARY OF THE TREASURY OR
 HIS DELEGATES PROVIDED THE LAWS OF THE UNITED STATES GRANT SUBSTANTIALLY
 SIMILAR POWERS TO THE SECRETARY OF THE TREASURY OR HIS DELEGATES.  WHERE
 THE  COMMISSIONER  OF  TAXATION  AND  FINANCE  HAS  SO AUTHORIZED USE OF
 RETURNS OR OTHER INFORMATION IN SUCH ACTIONS  OR  PROCEEDINGS,  OFFICERS
 AND  EMPLOYEES  OF THE DEPARTMENT OF TAXATION AND FINANCE MAY TESTIFY IN
 SUCH ACTIONS OR PROCEEDINGS IN RESPECT TO  SUCH  RETURNS  OR  OTHER  TAX
 INFORMATION.
   (D)  NOTWITHSTANDING THE PROVISIONS OF SUBSECTION (A) OF THIS SECTION,
 THE TAX COMMISSION MAY PERMIT THE  OFFICER  CHARGED  WITH  THE  ADMINIS-
 TRATION  OF  A  TAX  ON OR MEASURED BY INCOME IMPOSED BY ANY CITY OF THE
 STATE OF NEW YORK, OR THE AUTHORIZED REPRESENTATIVE OF SUCH OFFICER,  TO
 INSPECT  THE  RETURNS  FILED  UNDER THIS ARTICLE, OR MAY FURNISH TO SUCH
 OFFICER OR HIS AUTHORIZED REPRESENTATIVE AN ABSTRACT OF ANY SUCH  RETURN
 OR  SUPPLY  INFORMATION CONCERNING AN ITEM CONTAINED IN ANY SUCH RETURN,
 OR DISCLOSED BY ANY INVESTIGATION OF TAX LIABILITY UNDER  THIS  ARTICLE,
 BUT  SUCH  PERMISSION  SHALL BE GRANTED OR SUCH INFORMATION FURNISHED TO
 SUCH OFFICER OR HIS REPRESENTATIVE ONLY IF THE LOCAL LAWS OF  SUCH  CITY
 GRANT  SUBSTANTIALLY  SIMILAR PRIVILEGES TO THE COMMISSION OR OFFICER OF
 THIS STATE CHARGED WITH THE ADMINISTRATION OF THE TAX  IMPOSED  BY  THIS
 ARTICLE  AND  SUCH  INFORMATION IS TO BE USED FOR TAX PURPOSES ONLY; AND
 PROVIDED FURTHER THE COMMISSIONER OF TAXATION AND FINANCE MAY FURNISH TO
 SUCH CITY OFFICER OR HIS DELEGATES AND THE LEGAL REPRESENTATIVE OF  SUCH
 CITY SUCH RETURNS FILED UNDER THIS ARTICLE AND OTHER TAX INFORMATION, AS
 HE  MAY  CONSIDER  PROPER, FOR USE IN COURT ACTIONS OR PROCEEDINGS UNDER
 SUCH LOCAL LAW, WHETHER CIVIL  OR  CRIMINAL,  WHERE  A  WRITTEN  REQUEST
 THEREFOR  HAS  BEEN  MADE TO THE COMMISSIONER OF TAXATION AND FINANCE BY
 SUCH CITY OFFICER OR HIS DELEGATES OR BY SUCH  LEGAL  REPRESENTATIVE  OF
 SUCH  CITY,  PROVIDED  THE  LOCAL  LAW OF SUCH CITY GRANTS SUBSTANTIALLY
 SIMILAR POWERS TO THE CITY OFFICER CHARGED WITH  THE  ADMINISTRATION  OF
 THE CITY INCOME TAX OR HIS DELEGATES. WHERE THE COMMISSIONER OF TAXATION
 AND FINANCE HAS SO AUTHORIZED USE OF RETURNS OR OTHER TAX INFORMATION IN
 SUCH ACTIONS OR PROCEEDINGS, OFFICERS AND EMPLOYEES OF THE DEPARTMENT OF
 TAXATION  AND  FINANCE  MAY  TESTIFY  IN  SUCH ACTIONS OR PROCEEDINGS IN
 RESPECT TO SUCH RETURNS OR OTHER TAX INFORMATION.
   (E) NOTWITHSTANDING THE PROVISIONS OF SUBSECTION (A) OF THIS  SECTION,
 THE  TAX COMMISSION, IN ITS DISCRETION, MAY REQUIRE OR PERMIT ANY OR ALL
 PERSONS LIABLE FOR ANY TAX IMPOSED BY THIS ARTICLE, TO MAKE PAYMENTS  ON
 ACCOUNT  OF  ESTIMATED  TAX  AND PAYMENT OF ANY TAX, PENALTY OR INTEREST
 IMPOSED BY THIS ARTICLE TO BANKS,  BANKING  HOUSES  OR  TRUST  COMPANIES
 DESIGNATED  BY  THE TAX COMMISSION AND TO FILE DECLARATIONS OF ESTIMATED
 TAX, APPLICATIONS FOR AUTOMATIC EXTENSIONS OF TIME TO FILE RETURNS,  AND
 RETURNS  WITH SUCH BANKS, BANKING HOUSES OR TRUST COMPANIES AS AGENTS OF
 THE TAX COMMISSION, IN LIEU OF MAKING ANY SUCH PAYMENT DIRECTLY  TO  THE
 TAX  COMMISSION.  HOWEVER,  THE TAX COMMISSION SHALL DESIGNATE ONLY SUCH
 BANKS, BANKING HOUSES OR TRUST COMPANIES AS ARE OR SHALL  BE  DESIGNATED
 BY  THE COMPTROLLER AS DEPOSITORIES PURSUANT TO SECTION FOURTEEN HUNDRED
 SIXTY-SIX OF THIS ARTICLE.
   (F) NOTWITHSTANDING THE PROVISIONS OF SUBSECTION (A) OF THIS  SECTION,
 THE  COMMISSIONER  MAY  DISCLOSE  TO  A TAXPAYER OR A TAXPAYER'S RELATED
 MEMBER, AS DEFINED IN SUBSECTION (S) OF SECTION FOURTEEN HUNDRED  FIFTY-
 THREE  OF  THIS  ARTICLE,  INFORMATION  RELATING  TO  ANY  ROYALTY PAID,
 INCURRED OR RECEIVED BY SUCH TAXPAYER OR RELATED MEMBER TO OR  FROM  THE
 OTHER,  INCLUDING  THE TREATMENT OF SUCH PAYMENTS BY THE TAXPAYER OR THE
 RELATED MEMBER IN ANY REPORT OR RETURN TRANSMITTED TO  THE  COMMISSIONER
 UNDER THIS CHAPTER.

 S. 1680                            88
 
   §  1468. PROCEDURAL PROVISIONS. THE PROVISIONS OF ARTICLE TWENTY-SEVEN
 OF THIS CHAPTER SHALL APPLY TO THE PROVISIONS OF  THIS  ARTICLE  IN  THE
 SAME  MANNER  AND  WITH  THE SAME FORCE AND EFFECT AS IF THE LANGUAGE OF
 SUCH ARTICLE TWENTY-SEVEN HAD BEEN INCORPORATED IN FULL INTO THIS  ARTI-
 CLE  AND HAD EXPRESSLY REFERRED TO THE TAX UNDER THIS ARTICLE, EXCEPT TO
 THE EXTENT THAT  ANY  SUCH  PROVISION  IS  EITHER  INCONSISTENT  WITH  A
 PROVISION OF THIS ARTICLE OR IS NOT RELEVANT TO THIS ARTICLE.
   § 2. This act shall take effect immediately and shall apply to taxable
 years starting January 1, 2022.