S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   9705
 
                             I N  S E N A T E
 
                               May 22, 2024
                                ___________
 
 Introduced  by  Sen.  BAILEY -- 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  establishing  a  MWBE  or
   SDVOBE subcontractor tax credit
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section 1. Section 210-B of the tax law is amended  by  adding  a  new
 subdivision 60 to read as follows:
   60.  MWBE OR SDVOBE SUBCONTRACTOR TAX CREDIT. (A) ALLOWANCE OF CREDIT.
 FOR TAXABLE YEARS BEGINNING ON OR  AFTER  JANUARY  FIRST,  TWO  THOUSAND
 TWENTY-FIVE,  AN  ELIGIBLE  TAXPAYER  SHALL  BE  ALLOWED A CREDIT, TO BE
 COMPUTED AS PROVIDED IN THIS SUBDIVISION, AGAINST  THE  TAX  IMPOSED  BY
 THIS  ARTICLE, FOR AWARDING A PROFESSIONAL SERVICES, TRADES, OR SUPPLIER
 SUBCONTRACT TO A QUALIFIED  SUBCONTRACTOR  IN  FURTHERANCE  OF  A  STATE
 CONTRACT. THE TAXPAYER MAY CLAIM THE CREDIT IN THE YEAR IN WHICH PAYMENT
 IS  MADE BY THE ELIGIBLE TAXPAYER TO THE QUALIFIED SUBCONTRACTOR FOR THE
 PERFORMANCE OF SUCH SUBCONTRACT.  IF  THE  TAXPAYER  CLAIMS  THE  CREDIT
 ALLOWED  UNDER  THIS SECTION, THE TAXPAYER MAY NOT USE THE AWARDING OF A
 SUBCONTRACT TO A QUALIFIED SUBCONTRACTOR THAT  IS  THE  BASIS  FOR  THIS
 CREDIT IN THE BASIS OF ANY OTHER CREDIT ALLOWED UNDER THIS ARTICLE.
   (B)  DEFINITIONS.  (I) THE TERM "QUALIFIED SUBCONTRACTOR" SHALL MEAN A
 MINORITY OR WOMAN-OWNED BUSINESS ENTERPRISE CERTIFIED PURSUANT TO  ARTI-
 CLE  FIFTEEN-A  OF THE EXECUTIVE LAW OR A SERVICE-DISABLED VETERAN-OWNED
 BUSINESS ENTERPRISE CERTIFIED PURSUANT TO ARTICLE THREE OF THE VETERANS'
 SERVICES LAW THAT MAINTAINS THEIR HEADQUARTERS WITHIN NEW YORK STATE.
   (II) THE TERM "ELIGIBLE TAXPAYER" SHALL MEAN A CONTRACTOR THAT  AWARDS
 A  SUBCONTRACT  TO  A QUALIFYING SUBCONTRACTOR IN FURTHERANCE OF A STATE
 CONTRACT.
   (III) THE TERM "STATE CONTRACT" SHALL MEAN A CONTRACT FOR THE PURCHASE
 BY THE STATE OF GOODS, PROPERTY, OR SERVICES OR FOR THE CONSTRUCTION  OF
 ANY  BUILDING  OR STRUCTURE FOR THE STATE, WHICH CONTRACT IS EXECUTED BY
 ANY DEPARTMENT, BOARD, BUREAU, COMMISSION, OR AGENCY OF THE STATE, OR BY
 ANY OFFICER, OFFICIAL, EMPLOYEE, OR AGENT THEREOF.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD14557-03-4
              

 S. 9705                             2
 
   (C)  CONTRACTOR  PROHIBITION.  A  CONTRACTOR  SHALL  NOT  DISCHARGE  A
 CONTRACT WITH A SUBCONTRACTOR AND HIRE A QUALIFYING SUBCONTRACTOR SOLELY
 FOR  THE  PURPOSE  OF  QUALIFYING  FOR  THIS  CREDIT UNLESS THE PREVIOUS
 CONTRACTOR HAS BEEN REMOVED FOR REASONS NOT UNDER  THE  CONTROL  OF  THE
 CONTRACTOR.
   (D)  AMOUNT  OF  CREDIT.  THE  AMOUNT  OF  CREDIT SHALL BE THIRTY-FIVE
 PERCENT OF THE TOTAL AMOUNT OF PAYMENTS MADE BY THE ELIGIBLE TAXPAYER TO
 A QUALIFYING SUBCONTRACTOR IN THE TAXABLE YEAR IN WHICH SUCH  CREDIT  IS
 CLAIMED.
   (E)  CARRYOVERS.  THE  CREDIT  ALLOWED  UNDER THIS SUBDIVISION FOR ANY
 TAXABLE YEAR SHALL 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 CREDIT ALLOWABLE
 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 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.
   §  2. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
 of the tax law is amended by  adding  a  new  clause  (li)  to  read  as
 follows:
 (LI) MWBE OR SDVOBE                     AMOUNT OF CREDIT UNDER SUBDIVISION
 SUBCONTRACTOR TAX                       SIXTY OF SECTION TWO HUNDRED TEN-B
 CREDIT UNDER SUBSECTION (PPP)
   §  3. Section 606 of the tax law is amended by adding a new subsection
 (ppp) to read as follows:
   (PPP) MWBE OR SDVOBE SUBCONTRACTOR TAX CREDIT. (1) ALLOWANCE OF  CRED-
 IT.  FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND
 TWENTY-FIVE, AN ELIGIBLE TAXPAYER SHALL  BE  ALLOWED  A  CREDIT,  TO  BE
 COMPUTED  AS  PROVIDED  IN THIS SECTION, AGAINST THE TAX IMPOSED BY THIS
 ARTICLE, FOR AWARDING  A  PROFESSIONAL  SERVICES,  TRADES,  OR  SUPPLIER
 SUBCONTRACT  TO  A  QUALIFIED  SUBCONTRACTOR  IN  FURTHERANCE OF A STATE
 CONTRACT. THE TAXPAYER MAY CLAIM THE CREDIT IN THE YEAR IN WHICH PAYMENT
 IS MADE BY THE ELIGIBLE TAXPAYER TO THE QUALIFIED SUBCONTRACTOR FOR  THE
 PERFORMANCE  OF  SUCH  SUBCONTRACT.  IF  THE  TAXPAYER CLAIMS THE CREDIT
 ALLOWED UNDER THIS SUBSECTION, THE TAXPAYER MAY NOT USE THE AWARDING  OF
 A  SUBCONTRACT  TO  A QUALIFIED SUBCONTRACTOR THAT IS THE BASIS FOR THIS
 CREDIT IN THE BASIS OF ANY OTHER CREDIT ALLOWED UNDER THIS ARTICLE.
   (2) DEFINITIONS. (A) THE TERM "QUALIFIED SUBCONTRACTOR" SHALL  MEAN  A
 MINORITY  OR WOMAN-OWNED BUSINESS ENTERPRISE CERTIFIED PURSUANT TO ARTI-
 CLE FIFTEEN-A OF THE EXECUTIVE LAW OR A  SERVICE-DISABLED  VETERAN-OWNED
 BUSINESS ENTERPRISE CERTIFIED PURSUANT TO ARTICLE THREE OF THE VETERANS'
 SERVICES LAW.
   (B) THE TERM "ELIGIBLE TAXPAYER" SHALL MEAN A CONTRACTOR THAT AWARDS A
 SUBCONTRACT  TO  A  QUALIFYING  SUBCONTRACTOR  IN FURTHERANCE OF A STATE
 CONTRACT.
   (C) THE TERM "STATE CONTRACT" SHALL MEAN A CONTRACT FOR  THE  PURCHASE
 BY  THE STATE OF GOODS, PROPERTY, OR SERVICES OR FOR THE CONSTRUCTION OF
 ANY BUILDING OR STRUCTURE FOR THE STATE, WHICH CONTRACT IS  EXECUTED  BY
 ANY DEPARTMENT, BOARD, BUREAU, COMMISSION, OR AGENCY OF THE STATE, OR BY
 ANY  OFFICER,  OFFICIAL, EMPLOYEE, OR AGENT THEREOF OR ON NEW YORK STATE
 CAPITAL INFRASTRUCTURE  PROJECTS  WHERE  A  PUBLIC  BENEFIT  IS  DERIVED
 THROUGH LICENSE OR UTILIZATION OF STATE-OWNED LANDS.
   (3)  CONTRACTOR  PROHIBITION.  A  CONTRACTOR  SHALL  NOT  DISCHARGE  A
 CONTRACT WITH A SUBCONTRACTOR AND HIRE A QUALIFYING SUBCONTRACTOR SOLELY
 FOR THE PURPOSE OF QUALIFYING FOR THIS CREDIT.
 S. 9705                             3
 
   (4) AMOUNT OF CREDIT.  THE  AMOUNT  OF  CREDIT  SHALL  BE  THIRTY-FIVE
 PERCENT OF THE TOTAL AMOUNT OF PAYMENTS MADE BY THE ELIGIBLE TAXPAYER TO
 A  QUALIFYING  SUBCONTRACTOR IN THE TAXABLE YEAR IN WHICH SUCH CREDIT IS
 CLAIMED.
   (5) APPLICATION OF CREDIT. IF THE AMOUNT OF THE CREDIT ALLOWABLE UNDER
 THIS SUBSECTION FOR ANY TAXABLE YEAR EXCEEDS THE TAXPAYER'S TAX FOR SUCH
 YEAR, THE EXCESS SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDIT-
 ED  OR  REFUNDED  AS  PROVIDED IN SECTION SIX HUNDRED EIGHTY-SIX OF THIS
 ARTICLE, PROVIDED, HOWEVER, THAT NO INTEREST SHALL BE PAID THEREON.
   § 4. This act shall take effect immediately.