§ 15. QEZE credit for real property taxes. (a) Allowance of credit. A
taxpayer which is a qualified empire zone enterprise (QEZE), or which is
a sole proprietor of a QEZE or a member of a partnership which is a
QEZE, and which is subject to tax under article nine-A, twenty-two or
thirty-three of this chapter, shall be allowed a credit against such
tax, pursuant to the provisions referenced in subdivision (h) of this
section, for eligible real property taxes.

(b) Amount of credit. (1) In the case of a business enterprise which
is first certified under article eighteen-B of the general municipal law
before April first, two thousand five, the amount of the credit shall be
equal to the product (or pro rata share of the product, in the case of a
member of a partnership) of (i) the benefit period factor, (ii) the
employment increase factor and (iii) the eligible real property taxes
paid or incurred by the QEZE during the taxable year. However the amount
of the credit may not exceed the credit limitation set forth in
subdivision (f) of this section.

(2) (A) For a business enterprise which is first certified under
article eighteen-B of the general municipal law on or after April first,
two thousand five, and notwithstanding any other provision to the
contrary, in the case of a business enterprise which was first certified
between August first, two thousand two and March thirty-first, two
thousand five that conducts its operations on real property that it owns
or leases that is both located within an empire zone and that is subject
to a brownfield site cleanup agreement executed prior to January first,
two thousand six in accordance with section 27-1409 of the environmental
conservation law, the amount of the credit shall be equal to the product
(or pro rata share of the product, in the case of a member of a
partnership) of twenty-five percent of the total wages, health benefits
and retirement benefits paid to or on behalf of net new employees during
the taxable year, provided however, that the total amount of the credit
shall not exceed ten thousand dollars for each such employee. For
purposes of computing total wages, health benefits and retirement
benefits, wages, health benefits and retirement benefits for each
employee in excess of forty thousand dollars shall be excluded from such
computation. Provided however, the amount of the credit for a QEZE
certified in an empire zone designated under subdivision (b) or (c) of
section nine hundred fifty-eight of the general municipal law, except a
manufacturer certified in an empire zone designated under section nine
hundred fifty-eight of the general municipal law, shall be further
adjusted by the product of the amount determined above and the
development zone employment increase factor under subparagraph (B) of
this paragraph. Provided further, in addition, the amount of the credit
may not exceed the credit amount set forth in subdivision (f-1) of this
section.

(B) Development zone employment increase factor. The development zone
employment increase factors are set forth in the following table:
Net New Employees: DZ Employment Increase Factor:
1 to 10 0.25
11 to 49 0.5
50 to 75 0.75
76 and above the amount, not to exceed 1.0,

of new employees divided by 100

Net new employees. The number of net new employees for a QEZE is equal
to the excess of the QEZE's employment number in the empire zones with
respect to which the QEZE is certified pursuant to article eighteen-B of
the general municipal law for the taxable year, over the QEZE's
employment number in such zones for the base period.

(3) For a business enterprise which is first certified under article
eighteen-B of the general municipal law on or after April first, two
thousand nine, the credit allowed shall be seventy-five percent of the
amount calculated under paragraph two of this subdivision.

(c) Benefit period factor. The benefit period factors are set forth
in the following table:
Taxable year of the benefit period: Benefit period factor:

1 - 10 1.0

11 .8

12 .6

13 .4

14 .2

15 0

(d) Employment increase factor. The employment increase factor is the
amount, not to exceed 1.0, which is the greater of:

(1) the excess of the QEZE's employment number in the empire zones
with respect to which the QEZE is certified pursuant to article
eighteen-B of the general municipal law for the taxable year, over the
QEZE's test year employment number in such zones, divided by such test
year employment number in such zones; or

(2) the excess of the QEZE's employment number in such zones for the
taxable year over the QEZE's test year employment number in such zones,
divided by 100.

(3) For purposes of paragraph one of this subdivision, where there is
an excess as described in such paragraph, and where the test year
employment number is zero, then the employment increase factor shall be
1.0.

(e) Eligible real property taxes. The term "eligible real property
taxes" means taxes imposed on real property which is owned by the QEZE
and located in an empire zone with respect to which the QEZE is
certified pursuant to article eighteen-B of the general municipal law,
provided such taxes are paid by the QEZE which is the owner of the real
property or are paid by a tenant which either (i) does not meet the
eligibility requirements under section fourteen of this article to be a
QEZE or (ii) cannot treat such payment as eligible real property taxes
pursuant to this paragraph and such taxes become a lien on the real
property during a taxable year in which the owner of the real property
is both certified pursuant to article eighteen-B of the general
municipal law and a qualified empire zone enterprise. For purposes of
this subdivision, the term "tax" means a charge imposed upon real
property by or on behalf of a county, city, town, village or school
district for municipal or school district purposes, provided that the
charge is levied for the general public welfare by the proper taxing
authorities at a like rate against all property in the territory over
which such authorities have jurisdiction, and provided that where taxes
are levied pursuant to article eighteen or article nineteen of the real
property tax law, the property must have been taxed at the rate
determined for the class in which it is contained, as provided by such
article eighteen or nineteen, whichever is applicable. The term "tax"
does not include a charge for local benefits, including any portion of
that charge that is properly allocated to the costs attributable to
maintenance or interest, when (1) the property subject to the charge is
limited to the property that benefits from the charge, or (2) the amount
of the charge is determined by the benefit to the property assessed, or
(3) the improvement for which the charge is assessed tends to increase
the property value. In addition, "eligible real property taxes" shall
include taxes paid by a QEZE which is a lessee of real property if the
following conditions are satisfied: (1) the taxes must be paid by the
lessee pursuant to explicit requirements in a written lease executed or
amended on or after June first, two thousand five, (2) such taxes become
a lien on the real property during a taxable year in which the lessee of
the real property is both certified pursuant to article eighteen-B of
the general municipal law and a qualified empire zone enterprise, and
(3) the lessee has made direct payment of such taxes to the taxing
authority and has received a receipt for such payment of taxes from the
taxing authority. In addition, the term "eligible real property taxes"
includes payments in lieu of taxes made by the QEZE to the state, a
municipal corporation or a public benefit corporation pursuant to a
written agreement entered into between the QEZE and the state, municipal
corporation, or public benefit corporation. Provided, however, a payment
in lieu of taxes made by the QEZE pursuant to a written agreement
executed or amended on or after January first, two thousand one, shall
not constitute eligible real property taxes in any taxable year to the
extent that such payment exceeds the product of (A) the greater of (i)
the basis for federal income tax purposes, calculated without regard to
depreciation, determined as of the effective date of the QEZE's
certification pursuant to article eighteen-B of the general municipal
law of real property, including buildings and structural components of
buildings, owned by the QEZE and located in empire zones with respect to
which the QEZE is certified pursuant to such article eighteen-B of the
general municipal law, and provided that if such basis is further
adjusted or reduced pursuant to any provision of the internal revenue
code, the QEZE may petition the department and the department of
economic development to disregard such reduction or adjustment for the
purpose of this subdivision or (ii) the basis for federal income tax
purposes of such real property described in clause (i) of this
subparagraph, calculated without regard to depreciation, on the last day
of the taxable year, and provided that if such basis is further adjusted
or reduced pursuant to any provision of the internal revenue code, the
QEZE may petition the department, the department of economic development
and the office of real property services to disregard such reduction or
adjustment for the purpose of this subdivision; and (B) the estimated
effective full value tax rate within the county in which such property
is located, as most recently calculated by the commissioner. The
commissioner shall annually calculate estimated effective full value tax
rates within each county for this purpose based upon the most current
information available to him or her in relation to county, city, town,
village and school district taxes.

(f) In the case of a business enterprise which is first certified
under article eighteen-B of the general municipal law on or after August
first, two thousand two and before April first, two thousand five, the
credit limitation shall be the greater of the employment increase
limitation or the capital investment limitation.

(1) The employment increase limitation shall be the product of (A) ten
thousand dollars and (B) the excess of the QEZE's employment number in
the empire zones with respect to which the QEZE is certified pursuant to
article eighteen-B of the general municipal law for the taxable year,
over the QEZE's test year employment number in such zones.

(2) The capital investment limitation shall be the product of (A) ten
percent of the greater of (i) the cost or other basis for federal income
tax purposes, determined on the later of January first, two thousand one
or the effective date of the QEZE's certification pursuant to article
eighteen-B of the general municipal law, of real property, including
buildings and structural components of buildings, owned by the QEZE and
located in empire zones with respect to which the QEZE is certified
pursuant to such article eighteen-B of the general municipal law, or
(ii) the cost or other basis for federal income tax purposes of such
real property described in clause (i) of this subparagraph on the last
day of the taxable year, and (B) the greater of (i) the percentage of
such real property described in clause (i) of subparagraph (A) of this
paragraph which is physically occupied and used by the QEZE or by a
related person to the QEZE, as the term "related person" is defined in
subparagraph (c) of paragraph three of subsection (b) of section four
hundred sixty-five of the internal revenue code, or (ii) the percentage
of such cost or other basis which is attributable to the construction,
expansion or rehabilitation of such property, rather than the
acquisition of such real property, by the QEZE. Provided, however, if
the percentage of such cost or other basis, which is attributable to the
construction, expansion or rehabilitation of such real property equals
or exceeds fifty percent, then the percentage described in clause (ii)
of subparagraph (B) of this paragraph shall be deemed to be one hundred
percent.

(f-1) In the case of a business enterprise which is first certified
under article eighteen-B of the general municipal law on or after April
first, two thousand five, the credit shall be the greater of the credit
amount as determined pursuant to paragraph two of subdivision (b) of
this section, or the capital investment amount determined under this
subdivision. Provided however, that in no case shall the amount of the
credit exceed the amount of the taxpayer's eligible real property taxes
for the taxable year.

(1) For a QEZE certified in an empire zone designated under
subdivision (a) or (d) of section nine hundred fifty-eight of the
general municipal law and a manufacturer certified in an empire zone
designated under section nine hundred fifty-eight of the general
municipal law, the capital investment amount shall be the product of (A)
ten percent of the greater of (i) the cost or other basis for federal
income tax purposes, determined on the later of January first, two
thousand one or the effective date of the QEZE's certification pursuant
to article eighteen-B of the general municipal law, of real property,
including buildings and structural components of buildings, owned by the
QEZE and located in empire zones with respect to which the QEZE is
certified pursuant to such article eighteen-B of the general municipal
law, or (ii) the cost or other basis for federal income tax purposes of
such real property described in clause (i) of this subparagraph on the
last day of the taxable year, and (B) the greater of (i) the percentage
of such real property described in clause (i) of subparagraph (A) of
this paragraph which is physically occupied and used by the QEZE or by a
related person to the QEZE, as the term "related person" is defined in
subparagraph (c) of paragraph three of subsection (b) of section four
hundred sixty-five of the internal revenue code, or (ii) the percentage
of such cost or other basis which is attributable to the construction,
expansion or rehabilitation of such property, rather than the
acquisition of such real property, by the QEZE. Provided, however, if
the percentage of such cost or other basis, which is attributable to the
construction, expansion or rehabilitation of such real property equals
or exceeds fifty percent, then the percentage described in clause (ii)
of subparagraph (B) of this paragraph shall be deemed to be one hundred
percent.

(2) For a QEZE certified in an empire zone designated under
subdivision (b) or (c) of section nine hundred fifty-eight of the
general municipal law, which is not a manufacturer, the capital
investment amount shall be the product of ten percent and the amount of
such cost or other basis which is attributable to the construction,
expansion or rehabilitation of such property, rather than the
acquisition of such real property, and the percentage of such real
property described in clause (i) of subparagraph (A) of paragraph (1) of
this subdivision which is physically occupied and used by the QEZE or by
a related person to the QEZE, as the term "related person" is defined in
subparagraph (c) of paragraph three of subsection (b) of section four
hundred sixty-five of the internal revenue code. Provided, however, if
the percentage of such cost or other basis, which is attributable to the
construction, expansion or rehabilitation of such real property equals
or exceeds fifty percent, then the percentage of physical occupation and
use described in the preceding sentence shall be deemed to be one
hundred percent.

(g) Credit recapture. Where a QEZE's eligible real property taxes
which were the basis for the allowance of the credit provided for under
this section are subsequently reduced as a result of a final order in
any proceeding under article seven of the real property tax law or other
provision of law, the taxpayer shall add back, in the taxable year in
which such final order is issued, the excess of (1) the amount of credit
originally allowed for a taxable year over (2) the amount of credit
determined based upon the reduced eligible real property taxes. If such
final order reduces real property taxes for more than one year, the
taxpayer must determine how much of such reduction is attributable to
each year covered by such final order and calculate the amount of credit
which is required by this subdivision to be recaptured for each year
based on such reduction.

(h) Definitions and cross-references. For definitions of terms used in
this section see section fourteen of this article. For application of
the credit provided for in this section, see the following provisions of
this chapter:

(2) Article 9-A: Section 210-B: subdivision 5.

(3) Article 22: Section 606: subsections (i) and (bb).

(4) Article 33: Section 1511: subdivision (r).