S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   2609
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                             January 22, 2021
                                ___________
 
 Introduced  by  Sen. HELMING -- read twice and ordered printed, and when
   printed to be committed to the Committee on Investigations and Govern-
   ment Operations
 
 AN ACT to amend the tax law, in relation to establishing business  fran-
   chise, personal income and insurance franchise tax credits for employ-
   er provided or sponsored child care

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The tax law is amended by adding a new section 45  to  read
 as follows:
   §  45. EMPLOYER PROVIDED OR SPONSORED CHILD CARE. (A) DEFINITIONS. FOR
 THE PURPOSES OF THIS SECTION, THE FOLLOWING TERMS SHALL HAVE THE FOLLOW-
 ING MEANINGS:
   (1) "COST OF OPERATION" MEANS ANY REASONABLE DIRECT OPERATIONAL  COSTS
 INCURRED  BY  AN  EMPLOYER AS A RESULT OF PROVIDING EMPLOYER PROVIDED OR
 EMPLOYER SPONSORED CHILD CARE FACILITIES; PROVIDED, HOWEVER,  THAT  SUCH
 TERM SHALL EXCLUDE THE COST OF ANY PROPERTY THAT IS QUALIFIED CHILD CARE
 PROPERTY.
   (2) "EMPLOYER" MEANS A TAXPAYER WHO IS AN EMPLOYER UPON WHOM TAXES ARE
 IMPOSED  PURSUANT  TO ARTICLE NINE-A, TWENTY-TWO OR THIRTY-THREE OF THIS
 CHAPTER.
   (3) "EMPLOYER PROVIDED" MEANS CHILD CARE OFFERED ON THE PREMISES OF AN
 EMPLOYER.
   (4) "EMPLOYER SPONSORED" MEANS A CONTRACTUAL ARRANGEMENT WITH A  CHILD
 CARE FACILITY THAT IS PAID FOR BY AN EMPLOYER.
   (5)  "PREMISES  OF  THE  EMPLOYER"  MEANS  A  WORKPLACE PREMISES OF AN
 EMPLOYER, WITHIN THE STATE, PROVIDING THE CHILD CARE, OR BY ONE EMPLOYER
 PROVIDING THE CHILD CARE IN THE EVENT THAT THE CHILD  CARE  PROPERTY  IS
 OWNED  JOINTLY  OR SEVERALLY BY SUCH EMPLOYER AND ONE OR MORE EMPLOYERS;
 PROVIDED, HOWEVER, THAT IF SUCH WORKPLACE PREMISES ARE IMPRACTICABLE  OR
 OTHERWISE  UNSUITABLE FOR THE ON-SITE LOCATION OF A CHILD CARE FACILITY,

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

                                                            LBD04746-01-1

 S. 2609                             2
 
 AS DETERMINED BY THE OFFICE OF  CHILDREN  AND  FAMILY  SERVICES,  OR  IN
 CITIES  OF ONE MILLION OR MORE, THE CITY DEPARTMENT OF HEALTH AND MENTAL
 HYGIENE, SUCH FACILITY MAY BE LOCATED WITHIN A  REASONABLE  DISTANCE  OF
 THE PREMISES OF THE EMPLOYER.
   (6)  "QUALIFIED  CHILD CARE PROPERTY" INCLUDES, BUT IS NOT LIMITED TO,
 AMOUNTS EXPENDED  ON  LAND  ACQUISITION,  IMPROVEMENTS,  BUILDINGS,  AND
 BUILDING  IMPROVEMENTS AND FURNITURE, FIXTURES, AND EQUIPMENT, AND MEANS
 ALL REAL PROPERTY AND TANGIBLE PERSONAL PROPERTY PURCHASED  OR  ACQUIRED
 ON OR AFTER JANUARY FIRST, TWO THOUSAND TWENTY-ONE, OR WHICH PROPERTY IS
 FIRST  PLACED IN SERVICE ON OR AFTER JANUARY FIRST, TWO THOUSAND TWENTY-
 ONE, FOR USE EXCLUSIVELY IN THE CONSTRUCTION, EXPANSION, IMPROVEMENT  OR
 OPERATION OF AN EMPLOYER PROVIDED CHILD CARE FACILITY, BUT ONLY IF:
   (A) THE FACILITY IS LICENSED OR COMMISSIONED BY THE OFFICE OF CHILDREN
 SERVICES PURSUANT TO SECTION THREE HUNDRED NINETY OF THE SOCIAL SERVICES
 LAW,  OR IN CITIES OF ONE MILLION OR MORE, THE CITY DEPARTMENT OF HEALTH
 AND MENTAL HYGIENE PURSUANT TO ARTICLE FORTY-SEVEN OF THE HEALTH CODE OF
 THE CITY OF NEW YORK.
   (B) AT LEAST NINETY-FIVE PERCENT OF THE CHILDREN WHO USE THE  FACILITY
 ARE CHILDREN OF EMPLOYEES OF:
   (I)  THE EMPLOYER AND OTHER EMPLOYERS IN THE EVENT THAT THE CHILD CARE
 PROPERTY IS OWNED JOINTLY OR SEVERALLY BY THE EMPLOYER AND ONE  OR  MORE
 OTHER EMPLOYERS; OR
   (II)  A  CORPORATION  THAT  IS  A MEMBER OF THE TAXPAYER'S "AFFILIATED
 GROUP" WITHIN THE MEANING OF SECTION 1504(A)  OF  THE  INTERNAL  REVENUE
 CODE.
   (C)  THE  EMPLOYER  HAS  NOT PREVIOUSLY CLAIMED ANY TAX CREDIT FOR THE
 COST OF OPERATION FOR SUCH  QUALIFIED  CHILD  CARE  PROPERTY  PLACED  IN
 SERVICE  PRIOR TO TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO
 THOUSAND TWENTY-ONE.
   (B) ALLOWANCE OF CREDIT. A TAX CREDIT AGAINST THE TAXES IMPOSED PURSU-
 ANT TO ARTICLES NINE-A, TWENTY-TWO  AND  THIRTY-THREE  OF  THIS  CHAPTER
 SHALL  BE GRANTED TO AN EMPLOYER WHO PROVIDES OR SPONSORS CHILD CARE FOR
 EMPLOYEES. SUCH TAX CREDIT SHALL BE IN AN AMOUNT EQUAL TO TEN PERCENT OF
 THE COST OF OPERATION INCURRED BY THE EMPLOYER, AND  SUCH  CREDIT  SHALL
 NOT  EXCEED  TEN  THOUSAND  DOLLARS  LESS  ANY AMOUNTS PAID BY EMPLOYEES
 DURING THE TAXABLE YEAR.
   (C) CONDITIONS AND LIMITATIONS. THE TAX CREDIT ALLOWED UNDER  SUBDIVI-
 SION  (B)  OF  THIS SECTION SHALL BE SUBJECT TO THE FOLLOWING CONDITIONS
 AND LIMITATIONS:
   (1) THE EMPLOYER SHALL CERTIFY TO THE  DEPARTMENT  THE  NAMES  OF  THE
 EMPLOYEES,  THE  NAME OF THE CHILD CARE PROVIDER, THE NUMBER OF CHILDREN
 SERVED BY CARE SUBSIDIZED VIA THIS TAX CREDIT, THE  NUMBER  OF  CHILDREN
 RECEIVING  CARE  WHO  ARE EXCLUDED FROM THE TAX CREDIT PURSUANT TO PARA-
 GRAPH THREE OF THIS SUBDIVISION, AND SUCH OTHER INFORMATION  AS  MAY  BE
 REQUIRED  BY  THE  DEPARTMENT TO ENSURE THAT CREDITS ARE GRANTED ONLY TO
 EMPLOYERS WHO PROVIDE OR SPONSOR APPROVED CHILD CARE IN ACCORDANCE  WITH
 THIS SECTION;
   (2)  ONLY  IN  THE CASE OF EMPLOYER SPONSORED CARE, THE AVERAGE CREDIT
 UTILIZED PER CHILD SHALL NOT EXCEED THE MARKET  RATE  PER  CHILD  ESTAB-
 LISHED  BY  THE  OFFICE  OF  CHILDREN AND FAMILY SERVICES FOR THE SOCIAL
 SERVICES DISTRICT WITHIN WHICH CHILD CARE IS PROVIDED; AND
   (3) THE EMPLOYER SHALL NOT RECEIVE ANY TAX CREDIT FOR CARE PROVIDED TO
 THE CHILDREN OF ANY EMPLOYEE WHOSE ANNUAL HOUSEHOLD INCOME  EXCEEDS  TWO
 HUNDRED  THOUSAND  DOLLARS.  THE  DEPARTMENT  SHALL  ESTABLISH RULES AND
 ACCOUNTING MEASURES TO ENSURE THAT ANY COSTS OF CARE PROVIDED TO EMPLOY-
 EES WITH ANNUAL HOUSEHOLD INCOMES EXCEEDING TWO HUNDRED THOUSAND DOLLARS

 S. 2609                             3
 
 ARE ITEMIZED BY THE EMPLOYER AND EXCLUDED FROM THE TAX  CREDIT  PROVIDED
 TO EMPLOYERS PURSUANT TO THIS SECTION.
   (D) ELECTION. IN ADDITION TO THE TAX CREDIT PROVIDED UNDER SUBDIVISION
 (B)  OF  THIS SECTION, AN EMPLOYER SHALL BE GRANTED A CREDIT AGAINST THE
 TAX FOR THE TAXABLE YEAR IN WHICH THE EMPLOYER FIRST PLACES  IN  SERVICE
 QUALIFIED  CHILD CARE PROPERTY. THE CREDIT SHALL EQUAL TWENTY PERCENT OF
 THE COST OF ALL QUALIFIED CHILD CARE PROPERTY PURCHASED OR  ACQUIRED  BY
 THE  EMPLOYER  AND  FIRST  PLACED IN SERVICE DURING A TAXABLE YEAR. SUCH
 CREDIT SHALL NOT EXCEED TWENTY THOUSAND DOLLARS.
   (E) CARRYOVER. THE TAX CREDIT ALLOWED UNDER SUBDIVISION  (D)  OF  THIS
 SECTION SHALL BE SUBJECT TO THE FOLLOWING CONDITIONS AND LIMITATIONS:
   (1)  ANY  SUCH CREDIT CLAIMED IN ANY TAXABLE YEAR BUT NOT USED IN SUCH
 TAXABLE YEAR MAY BE CARRIED FORWARD FOR THREE YEARS FROM  THE  CLOSE  OF
 SUCH  TAXABLE  YEAR.  THE SALE, MERGER, ACQUISITION OR BANKRUPTCY OF ANY
 EMPLOYER SHALL NOT CREATE NEW ELIGIBILITY FOR THE CREDIT IN ANY SUCCEED-
 ING TAXPAYER;
   (2) IN NO EVENT SHALL THE AMOUNT OF ANY SUCH TAX CREDIT, INCLUDING ANY
 CARRYOVER OF SUCH CREDIT FROM A PRIOR TAXABLE YEAR, EXCEED FIFTY PERCENT
 OF THE EMPLOYER'S TAX LIABILITY AS  DETERMINED  WITHOUT  REGARD  TO  ANY
 OTHER CREDITS; AND
   (3)  FOR  EVERY  YEAR  IN  WHICH  AN  EMPLOYER CLAIMS SUCH CREDIT, THE
 EMPLOYER SHALL ATTACH A SCHEDULE, WHOSE  FORM  AND  STRUCTURE  SHALL  BE
 ESTABLISHED  BY  THE  DEPARTMENT,  TO  THE EMPLOYER'S TAX RETURN SETTING
 FORTH THE FOLLOWING INFORMATION WITH RESPECT TO SUCH TAX CREDIT:
   (A) A DESCRIPTION OF THE CHILD CARE FACILITY;
   (B) THE AMOUNT OF QUALIFIED CHILD CARE PROPERTY  ACQUIRED  DURING  THE
 TAXABLE YEAR AND THE COST OF SUCH PROPERTY;
   (C) THE AMOUNT OF TAX CREDIT CLAIMED FOR THE TAXABLE YEAR;
   (D)  THE  AMOUNT  OF  QUALIFIED  CHILD CARE PROPERTY ACQUIRED IN PRIOR
 TAXABLE YEARS AND THE COST OF SUCH PROPERTY;
   (E) ANY TAX CREDIT UTILIZED BY THE EMPLOYER IN PRIOR TAXABLE YEARS;
   (F) THE AMOUNT OF TAX CREDIT CARRIED OVER FROM PRIOR YEARS;
   (G) THE AMOUNT OF TAX CREDIT UTILIZED BY THE EMPLOYER IN  THE  CURRENT
 TAXABLE YEAR;
   (H)  THE  AMOUNT OF TAX CREDIT TO BE CARRIED FORWARD TO SUBSEQUENT TAX
 YEARS; AND
   (I) A DESCRIPTION OF ANY RECAPTURE EVENT OCCURRING DURING THE  TAXABLE
 YEAR,  A CALCULATION OF THE RESULTING REDUCTION IN TAX CREDITS ALLOWABLE
 FOR THE RECAPTURE YEAR AND FUTURE TAXABLE YEARS, AND  A  CALCULATION  OF
 THE RESULTING INCREASE IN TAX FOR THE RECAPTURE YEAR.
   (F) RECAPTURE.
   (1)  IF THE TAXPAYER DISPOSES OF THE QUALIFIED CHILD CARE PROPERTY, OR
 IF SUCH PROPERTY CEASES TO BE A QUALIFIED  CHILD  CARE  PROPERTY  EXCEPT
 FOR:
   (A) ANY TRANSFER BY REASON OF DEATH;
   (B) ANY TRANSFER BETWEEN SPOUSES OR INCIDENT TO DIVORCE;
   (C)  ANY  TRANSACTION  TO WHICH SECTION 381(A) OF THE INTERNAL REVENUE
 CODE APPLIES;
   (D) ANY CHANGE IN THE FORM OF CONDUCTING THE EMPLOYER'S TRADE OR BUSI-
 NESS SO LONG AS THE PROPERTY IS RETAINED BY SUCH TRADE  OR  BUSINESS  AS
 QUALIFIED  CHILD  CARE  PROPERTY  AND THE EMPLOYER RETAINS A SUBSTANTIAL
 INTEREST IN SUCH TRADE OR BUSINESS; OR
   (E) ANY ACCIDENT OR CASUALTY, THE TAXPAYER'S TAX IMPOSED BY THIS ARTI-
 CLE FOR THE TAXABLE YEAR IN WHICH SUCH DISPOSITION OR  CESSATION  OCCURS
 SHALL  BE INCREASED BY THE RECAPTURE PORTION OF THE CREDIT ALLOWED UNDER
 PARAGRAPH TWO OF THIS SUBDIVISION FOR ALL PRIOR TAXABLE YEARS.

 S. 2609                             4
 
   (2) FOR PURPOSES OF PARAGRAPH ONE OF THIS SUBDIVISION,  THE  RECAPTURE
 PORTION  SHALL  REDUCE  THE CREDIT OTHERWISE ALLOWABLE UNDER SUBDIVISION
 (D) OF THIS SECTION, BUT SHALL NOT, AT ANY POINT, REDUCE THE TAX  CREDIT
 BELOW ZERO. ANY EXCESS OF THE RECAPTURE AMOUNT SHALL RESULT IN AN EQUIV-
 ALENT INCREASE IN THE TAX IMPOSED UNDER THIS SECTION.
   (G) RULES. THE COMMISSIONER SHALL PROMULGATE ANY RULES AND REGULATIONS
 NECESSARY TO IMPLEMENT AND ADMINISTER THE PROVISIONS OF THIS SECTION.
   (H)  CROSS-REFERENCES.  FOR  THE APPLICATION OF THE CREDIT PROVIDED IN
 THIS SECTION, SEE THE FOLLOWING PROVISIONS OF THIS CHAPTER:
   (1) ARTICLE 9-A: SECTION 210-B, SUBDIVISION 28;
   (2) ARTICLE 22: SECTION 606, SUBSECTION (KKK);
   (3) ARTICLE 33: SECTION 1511, SUBDIVISION (EE).
   § 2. Section 210-B of the tax law is amended by adding a new  subdivi-
 sion 28 to read as follows:
   28. EMPLOYER PROVIDED OR SPONSORED CHILD CARE CREDIT. (A) ALLOWANCE OF
 CREDIT.  A TAXPAYER WILL BE ALLOWED A CREDIT, TO BE COMPUTED AS PROVIDED
 IN SECTION FORTY-FIVE OF THIS CHAPTER, AGAINST THE TAXES IMPOSED BY THIS
 ARTICLE.
   (B) APPLICATION OF CREDIT. THE CREDIT ALLOWED UNDER  THIS  SUBDIVISION
 FOR  ANY  TAXABLE YEAR WILL NOT REDUCE THE TAX DUE FOR SUCH YEAR TO LESS
 THAN THE AMOUNT PRESCRIBED  IN  PARAGRAPH  (D)  OF  SUBDIVISION  ONE  OF
 SECTION TWO HUNDRED TEN OF THIS ARTICLE. HOWEVER, IF THE AMOUNT OF CRED-
 IT  ALLOWED  UNDER THIS SUBDIVISION FOR ANY TAXABLE YEAR REDUCES THE TAX
 TO SUCH AMOUNT OR IF THE TAXPAYER OTHERWISE PAYS TAX BASED ON THE  FIXED
 DOLLAR  MINIMUM 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.
   § 3. Subparagraph (B) of paragraph 1 of subsection (i) of section  606
 of  the  tax  law  is  amended  by adding a new clause (xlvi) to read as
 follows:
 
 (XLVI) EMPLOYER                      AMOUNT OF CREDIT
 PROVIDED OR SPONSORED                UNDER SUBDIVISION
 CHILD CARE CREDIT                    TWENTY-EIGHT OF
 UNDER SUBSECTION                     SECTION TWO HUNDRED
 (KKK)                                TEN-B
 
   § 4. Section 606 of the tax law is amended by adding a new  subsection
 (kkk) to read as follows:
   (KKK)  EMPLOYER PROVIDED OR SPONSORED CHILD CARE CREDIT. (1) ALLOWANCE
 OF CREDIT. A TAXPAYER SHALL BE ALLOWED  A  CREDIT,  TO  BE  COMPUTED  AS
 PROVIDED  IN SECTION FORTY-FIVE OF THIS CHAPTER, AGAINST THE TAX IMPOSED
 BY THIS ARTICLE.
   (2) APPLICATION OF CREDIT. IF THE AMOUNT OF THE CREDIT  ALLOWED  UNDER
 THIS SUBSECTION FOR ANY TAXABLE YEAR EXCEEDS THE TAXPAYER'S TAX FOR SUCH
 YEAR, THE EXCESS WILL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED
 OR  REFUNDED  IN  ACCORDANCE  WITH THE PROVISIONS OF SECTION SIX HUNDRED
 EIGHTY-SIX OF THIS ARTICLE, PROVIDED, HOWEVER, THAT NO INTEREST WILL  BE
 PAID THEREON.
   §  5.  Section 1511 of the tax law is amended by adding a new subdivi-
 sion (ee) to read as follows:
   (EE) EMPLOYER PROVIDED OR SPONSORED CHILD CARE CREDIT.  (1)  ALLOWANCE
 OF  CREDIT.  A  TAXPAYER  WILL  BE  ALLOWED  A CREDIT, TO BE COMPUTED AS

 S. 2609                             5
 
 PROVIDED IN SECTION  FORTY-FIVE  OF  THIS  CHAPTER,  AGAINST  THE  TAXES
 IMPOSED BY THIS ARTICLE.
   (2)  APPLICATION  OF CREDIT. THE CREDIT ALLOWED UNDER THIS SUBDIVISION
 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 SUBDIVISION 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.
   § 6. This act shall take effect immediately and shall apply to taxable
 years commencing on or after January 1, 2021.