S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                         6578
                              2015-2016 Regular Sessions
                                 I N  A S S E M B L Y
                                    March 27, 2015
                                      ___________
       Introduced  by  M.  of  A. ENGLEBRIGHT, COLTON, CYMBROWITZ, SCHIMMINGER,
         ORTIZ, SCHIMEL -- Multi-Sponsored by -- M. of A. AUBRY,  CLARK,  COOK,
         DINOWITZ,  GALEF,  LENTOL,  McDONOUGH, PERRY, RIVERA, ROBINSON -- read
         once and referred to the Committee on Ways and Means
       AN ACT to amend the tax law, in relation to pollution  tax  credits  for
         the purchase of certain equipment made by dry cleaning businesses
         THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
       BLY, DO ENACT AS FOLLOWS:
    1    Section 1. Subdivision (a) of section 1115 of the tax law  is  amended
    2  by adding a new paragraph 44 to read as follows:
    3    (44)  EQUIPMENT  OR  MACHINERY CERTIFIED BY THE DEPARTMENT OF ENVIRON-
    4  MENTAL CONSERVATION, PURSUANT TO REGULATIONS PROMULGATED BY SUCH DEPART-
    5  MENT, FOR POLLUTION PREVENTION OR CONTROL WHICH, FOR  PURPOSES  OF  THIS
    6  PARAGRAPH,  SHALL MEAN ANY PROCESS, FACILITY, DEVICE, FIXTURE, EQUIPMENT
    7  OR MACHINERY USED PRIMARILY FOR THE CONTROL, PREVENTION OR ABATEMENT  OF
    8  POLLUTION  OR  CONTAMINANTS  FROM THE OPERATION OF A DRY CLEANING PLANT,
    9  INCLUDING ANY STRUCTURE, MACHINERY OR EQUIPMENT INSTALLED IN THE  RECON-
   10  STRUCTION  OR  REPLACEMENT  OF  SUCH PROCESS, FACILITY, DEVICE, FIXTURE,
   11  EQUIPMENT OR MACHINERY.
   12    S 2. Subparagraph (A) of  paragraph 2 of subsection   (a)  of  section
   13  606  of  the  tax law, as amended by chapter 637 of the laws of 2008, is
   14  amended to read as follows:
   15    (A) A credit shall be allowed under this subsection  with  respect  to
   16  tangible personal property and other tangible property, including build-
   17  ings  and  structural  components  of  buildings, which are: depreciable
   18  pursuant to section one hundred  sixty-seven  of  the  internal  revenue
   19  code, have a useful life of four years or more, are acquired by purchase
   20  as  defined  in  section  one  hundred  seventy-nine (d) of the internal
   21  revenue code, have a situs in this state and are (i) principally used by
   22  the taxpayer in the production of goods  by  manufacturing,  processing,
   23  assembling,  refining,  mining, extracting, farming, agriculture, horti-
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD10122-01-5
       A. 6578                             2
    1  culture, floriculture, viticulture or commercial  fishing,  (ii)  indus-
    2  trial  waste  treatment  facilities or air pollution control facilities,
    3  used in the taxpayer's trade or business OR BUSINESS INVESTMENTS MADE BY
    4  DRY  CLEANING  BUSINESSES  TO  ACHIEVE  POLLUTION  PREVENTION  INCLUDING
    5  INVESTMENTS INTO CHANGES IN FACILITY PROCESSES  OR  OPERATIONS  METHODS,
    6  (iii)  research  and  development property, (iv) principally used in the
    7  ordinary course of the taxpayer's trade or business as a broker or deal-
    8  er in connection with the purchase or sale (which shall include but  not
    9  be  limited  to the issuance, entering into, assumption, offset, assign-
   10  ment, termination, or transfer) of stocks, bonds or other securities  as
   11  defined  in  section  four  hundred  seventy-five (c)(2) of the Internal
   12  Revenue Code, or of commodities as defined  in  section  475(e)  of  the
   13  Internal  Revenue  Code,  (v) principally used in the ordinary course of
   14  the taxpayer's  trade  or  business  of  providing  investment  advisory
   15  services  for a regulated investment company as defined in section eight
   16  hundred fifty-one  of  the  Internal  Revenue  Code,  or  lending,  loan
   17  arrangement or loan origination services to customers in connection with
   18  the  purchase  or  sale  (which  shall include but not be limited to the
   19  issuance, entering into, assumption, offset, assignment, termination, or
   20  transfer) of securities as defined in section four hundred  seventy-five
   21  (c)(2) of the Internal Revenue Code, or (vi) principally used as a qual-
   22  ified  film  production  facility  including  qualified  film production
   23  facilities having a situs in an empire zone designated as such  pursuant
   24  to  article  eighteen-B of the general municipal law, where the taxpayer
   25  is providing three or more services to  any  qualified  film  production
   26  company using the facility, including such services as a studio lighting
   27  grid,  lighting  and grip equipment, multi-line phone service, broadband
   28  information technology access,  industrial  scale  electrical  capacity,
   29  food  services,  security  services,  and  heating,  ventilation and air
   30  conditioning. For purposes of clauses (iv) and (v) of this subparagraph,
   31  property purchased by a taxpayer affiliated  with  a  regulated  broker,
   32  dealer,  or registered investment adviser is allowed a credit under this
   33  subsection if the property is used by its affiliated  regulated  broker,
   34  dealer   or  registered  investment  adviser  in  accordance  with  this
   35  subsection. For purposes of determining if the property  is  principally
   36  used  in  qualifying uses, the uses by the taxpayer described in clauses
   37  (iv) and (v) of this subparagraph may be aggregated.  In  addition,  the
   38  uses by the taxpayer, its affiliated regulated broker, dealer and regis-
   39  tered  investment  adviser  under either or both of those clauses may be
   40  aggregated. Provided, however, a taxpayer shall not be allowed the cred-
   41  it provided by clauses (iv) and (v)  of  this  subparagraph  unless  (I)
   42  eighty  percent  or  more of the employees performing the administrative
   43  and support functions resulting from or related to the  qualifying  uses
   44  of  such equipment are located in this state, or (II) the average number
   45  of employees that  perform  the  administrative  and  support  functions
   46  resulting  from  or related to the qualifying uses of such equipment and
   47  are located in this state during the taxable year for which  the  credit
   48  is  claimed is equal to or greater than ninety-five percent of the aver-
   49  age number of employees that perform these functions and are located  in
   50  this  state  during the thirty-six months immediately preceding the year
   51  for which the credit is  claimed,  or  (III)  the  number  of  employees
   52  located  in  this  state during the taxable year for which the credit is
   53  claimed is equal to or greater than ninety  percent  of  the  number  of
   54  employees  located  in  this  state  on  December thirty-first, nineteen
   55  hundred ninety-eight or, if the taxpayer was not a calendar year taxpay-
   56  er in nineteen hundred ninety-eight, the last day of its  first  taxable
       A. 6578                             3
    1  year  ending after December thirty-first, nineteen hundred ninety-eight.
    2  If the taxpayer becomes subject to tax in this state after  the  taxable
    3  year  beginning  in  nineteen hundred ninety-eight, then the taxpayer is
    4  not  required  to  satisfy the employment test provided in the preceding
    5  sentence of this subparagraph  for  its  first  taxable  year.  For  the
    6  purposes  of  clause (III) of this subparagraph the employment test will
    7  be based on the number of employees located in this state  on  the  last
    8  day  of  the  first  taxable year the taxpayer is subject to tax in this
    9  state. If the uses of the  property  must  be  aggregated  to  determine
   10  whether the property is principally used in qualifying uses, then either
   11  each  affiliate  using the property must satisfy this employment test or
   12  this employment test must be satisfied through the  aggregation  of  the
   13  employees  of the taxpayer, its affiliated regulated broker, dealer, and
   14  registered investment adviser using the property. For purposes  of  this
   15  subsection, the term "goods" shall not include electricity.
   16    S  3. Subparagraph (B) of paragraph 2 of subsection (a) of section 606
   17  of the tax law is amended by adding three new clauses  (vi),  (vii)  and
   18  (viii) to read as follows:
   19    (VI)  POLLUTION PREVENTION SHALL MEAN CHANGES IN PRODUCTION METHODS OR
   20  RAW MATERIALS THAT REDUCE, AVOID  OR  ELIMINATE  THE  USE  OF  TOXIC  OR
   21  HAZARDOUS  SUBSTANCES OR THE GENERATION OF SUCH SUBSTANCES OR POLLUTANTS
   22  PER UNIT OF PRODUCT, SO AS TO REDUCE RISKS TO  THE  HEALTH  OF  WORKERS,
   23  CONSUMERS  OR  THE  ENVIRONMENT, WITHOUT SHIFTING RISKS BETWEEN WORKERS,
   24  CONSUMERS OR ENVIRONMENTAL  MEDIA.  POLLUTION  PREVENTION  INCLUDES  THE
   25  REDESIGN,  MODIFICATION, UPGRADE OR REPLACEMENT OF PRODUCTION PROCESSES,
   26  EQUIPMENT OR TECHNOLOGY; REFORMULATION OR REDESIGN OF PRODUCTS,  SUBSTI-
   27  TUTION OF INPUTS OR RAW MATERIALS; IMPROVEMENTS IN HOUSEKEEPING, MAINTE-
   28  NANCE, TRAINING OR INVENTORY CONTROL; AND EXTENDED USE OR REUSE OF MATE-
   29  RIALS  THROUGH  METHODS  INTEGRAL  TO  THE  PRODUCTION  PROCESS, SUCH AS
   30  IN-PROCESS, CLOSED-LOOP RECYCLING. SUCH TERM DOES NOT INCLUDE  INCINERA-
   31  TION, TRANSFER FROM ONE MEDIUM OF RELEASE OR DISCHARGE TO ANOTHER MEDIA,
   32  OFF-SITE   OR  OUT-OF-PRODUCTION  RECYCLING,  END-OF-PIPE  TREATMENT  OR
   33  POLLUTION CONTROL.
   34    (VII) POLLUTANT SHALL MEAN ANY SUBSTANCE, CONTAMINANT, WASTE OR  EMIS-
   35  SION  WHICH  CONTRIBUTES  TO  POLLUTION AS DEFINED IN ARTICLE ONE OF THE
   36  ENVIRONMENTAL CONSERVATION LAW.
   37    (VIII) TOXIC OR HAZARDOUS SUBSTANCE SHALL MEAN ANY SUBSTANCE LISTED AS
   38  A SUBSTANCE HAZARDOUS TO PUBLIC HEALTH, SAFETY  OR  THE  ENVIRONMENT  IN
   39  REGULATIONS PROMULGATED PURSUANT TO ARTICLE THIRTY-SEVEN OF THE ENVIRON-
   40  MENTAL CONSERVATION LAW.
   41    S  4.  Subparagraph  (i)  of paragraph (b) of subdivision 1 of section
   42  210-B of the tax law, as added by section 17 of part A of chapter 59  of
   43  the laws of 2014, is amended to read as follows:
   44    (i)  A  credit shall be allowed under this subdivision with respect to
   45  tangible personal property and other tangible property, including build-
   46  ings and structural components  of  buildings,  which  are:  depreciable
   47  pursuant  to  section  one  hundred  sixty-seven of the internal revenue
   48  code, have a useful life of four years or more, are acquired by purchase
   49  as defined in section one  hundred  seventy-nine  (d)  of  the  internal
   50  revenue code, have a situs in this state and are (A) principally used by
   51  the  taxpayer  in  the production of goods by manufacturing, processing,
   52  assembling, refining, mining, extracting, farming,  agriculture,  horti-
   53  culture, floriculture, viticulture or commercial fishing, (B) industrial
   54  waste  treatment facilities or air pollution control facilities, used in
   55  the taxpayer's trade or business, (C) research and development  property
   56  OR  BUSINESS  INVESTMENTS  MADE  BY  DRY  CLEANING BUSINESSES TO ACHIEVE
       A. 6578                             4
    1  POLLUTION PREVENTION INCLUDING  INVESTMENTS  INTO  CHANGES  IN  FACILITY
    2  PROCESSES  OR  OPERATIONS OR PRODUCTION METHODS, or (D) principally used
    3  in the ordinary course of the taxpayer's trade or business as  a  broker
    4  or  dealer  in connection with the purchase or sale (which shall include
    5  but not be limited to the issuance, entering into,  assumption,  offset,
    6  assignment,  termination, or transfer) of stocks, bonds or other securi-
    7  ties as defined in section  four  hundred  seventy-five  (c)(2)  of  the
    8  Internal  Revenue  Code,  or  of  commodities as defined in section four
    9  hundred seventy-five (e) of the Internal Revenue Code,  (E)  principally
   10  used  in  the  ordinary  course  of  the taxpayer's trade or business of
   11  providing investment advisory services for a regulated investment compa-
   12  ny as defined in section eight hundred fifty-one of the Internal Revenue
   13  Code, or lending, loan  arrangement  or  loan  origination  services  to
   14  customers  in  connection with the purchase or sale (which shall include
   15  but not be limited to the issuance, entering into,  assumption,  offset,
   16  assignment,  termination,  or  transfer)  of  securities  as  defined in
   17  section four hundred seventy-five (c)(2) of the Internal  Revenue  Code,
   18  (F) originally used in the ordinary course of the taxpayer's business as
   19  an  exchange  registered  as  a  national securities exchange within the
   20  meaning of sections 3(a)(1) and 6(a) of the Securities Exchange  Act  of
   21  1934  or  a  board  of trade as defined in section 1410(a)(1) of the New
   22  York Not-for-Profit Corporation Law or as an entity that is wholly owned
   23  by one or more such national securities exchanges or boards of trade and
   24  that provides automation or technical services thereto, or  (G)  princi-
   25  pally  used  as a qualified film production facility including qualified
   26  film production facilities having a situs in an empire  zone  designated
   27  as  such  pursuant  to  article eighteen-B of the general municipal law,
   28  where the taxpayer is providing three or more services to any  qualified
   29  film production company using the facility, including such services as a
   30  studio  lighting  grid,  lighting  and  grip equipment, multi-line phone
   31  service, broadband information technology access, industrial scale elec-
   32  trical capacity, food services, security services, and  heating,  venti-
   33  lation  and air conditioning. Provided, however, a taxpayer shall not be
   34  allowed the credit provided by clauses (D), (E) and (F) of this subpara-
   35  graph unless (i) eighty percent or more of the employees performing  the
   36  administrative  and  support  functions resulting from or related to the
   37  qualifying uses of such equipment are located in this state or (ii)  the
   38  average  number of employees that perform the administrative and support
   39  functions resulting from or related  to  the  qualifying  uses  of  such
   40  equipment  and  are  located  in  this state during the taxable year for
   41  which the credit is claimed is equal  to  or  greater  than  ninety-five
   42  percent  of the average number of employees that perform these functions
   43  and are located in this state during the thirty-six  months  immediately
   44  preceding  the year for which the credit is claimed, or (iii) the number
   45  of employees located in this state during the taxable year for which the
   46  credit is claimed is equal to or greater  than  ninety  percent  of  the
   47  number  of  employees  located  in  this state on December thirty-first,
   48  nineteen hundred ninety-eight or, if the taxpayer  was  not  a  calendar
   49  year  taxpayer  in  nineteen  hundred  ninety-eight, the last day of its
   50  first taxable year ending after December thirty-first, nineteen  hundred
   51  ninety-eight. If the taxpayer becomes subject to tax in this state after
   52  the  taxable  year  beginning in nineteen hundred ninety-eight, then the
   53  taxpayer is not required to satisfy the employment test provided in  the
   54  preceding  sentence of this subparagraph for its first taxable year. For
   55  purposes of clause (iii) of this subparagraph the employment  test  will
   56  be  based  on  the number of employees located in this state on the last
       A. 6578                             5
    1  day of the first taxable year the taxpayer is subject  to  tax  in  this
    2  state.    If  the  uses  of the property must be aggregated to determine
    3  whether the property is principally used in qualifying uses, then either
    4  each  affiliate  using the property must satisfy this employment test or
    5  this employment test must be satisfied through the  aggregation  of  the
    6  employees  of the taxpayer, its affiliated regulated broker, dealer, and
    7  registered investment adviser using the property. For purposes  of  this
    8  subdivision, the term "goods" shall not include electricity.
    9    S  5.  Subparagraph  (ii) of paragraph (b) of subdivision 1 of section
   10  210-B of the tax law is amended by adding three new clauses (F), (G) and
   11  (H) to read as follows:
   12    (F) POLLUTION PREVENTION SHALL MEAN CHANGES IN PRODUCTION  METHODS  OR
   13  RAW  MATERIALS  THAT  REDUCE,  AVOID  OR  ELIMINATE  THE USE OF TOXIC OR
   14  HAZARDOUS SUBSTANCES OR THE GENERATION OF SUCH SUBSTANCES OR  POLLUTANTS
   15  PER  UNIT  OF  PRODUCT,  SO AS TO REDUCE RISKS TO THE HEALTH OF WORKERS,
   16  CONSUMERS OR THE ENVIRONMENT, WITHOUT SHIFTING  RISKS  BETWEEN  WORKERS,
   17  CONSUMERS  OR  ENVIRONMENTAL  MEDIA.  POLLUTION  PREVENTION INCLUDES THE
   18  REDESIGN, MODIFICATION, UPGRADE OR REPLACEMENT OF PRODUCTION  PROCESSES,
   19  EQUIPMENT  OR TECHNOLOGY; REFORMULATION OR REDESIGN OF PRODUCTS, SUBSTI-
   20  TUTION OF INPUTS OR RAW MATERIALS; IMPROVEMENTS IN HOUSEKEEPING, MAINTE-
   21  NANCE, TRAINING OR INVENTORY CONTROL; AND EXTENDED USE OR REUSE OF MATE-
   22  RIALS THROUGH METHODS  INTEGRAL  TO  THE  PRODUCTION  PROCESS,  SUCH  AS
   23  IN-PROCESS,  CLOSED-LOOP RECYCLING. SUCH TERM DOES NOT INCLUDE INCINERA-
   24  TION, TRANSFER FROM ONE MEDIUM OF RELEASE OR DISCHARGE TO ANOTHER MEDIA,
   25  OFF-SITE   OR  OUT-OF-PRODUCTION  RECYCLING,  END-OF-PIPE  TREATMENT  OR
   26  POLLUTION CONTROL.
   27    (G) POLLUTANT SHALL MEAN ANY SUBSTANCE, CONTAMINANT, WASTE OR EMISSION
   28  WHICH CONTRIBUTES TO POLLUTION AS DEFINED IN ARTICLE ONE OF THE ENVIRON-
   29  MENTAL CONSERVATION LAW.
   30    (H) TOXIC OR HAZARDOUS SUBSTANCE SHALL MEAN ANY SUBSTANCE LISTED AS  A
   31  SUBSTANCE HAZARDOUS TO PUBLIC HEALTH, SAFETY OR THE ENVIRONMENT IN REGU-
   32  LATIONS  PROMULGATED  PURSUANT  TO  ARTICLE THIRTY-SEVEN OF THE ENVIRON-
   33  MENTAL CONSERVATION LAW.
   34    S 6. This act shall take effect three years after it shall have become
   35  a law and shall apply to taxable years ending on or after such effective
   36  date, except that section one of this act shall take effect on the first
   37  day of the sales tax quarterly period, as designated in subdivision  (b)
   38  of  section  1136 of the tax law, next commencing on or after the effec-
   39  tive date of this act and shall apply to sales  made  on  or  after  the
   40  effective  date of section one of this act and shall apply to all equip-
   41  ment or machinery purchased on or after  such  date  although  purchased
   42  under a prior contract.