S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                          199
                              2015-2016 Regular Sessions
                                 I N  A S S E M B L Y
                                      (PREFILED)
                                    January 7, 2015
                                      ___________
       Introduced  by M. of A. GANTT -- read once and referred to the Committee
         on Housing
       AN ACT to amend the general municipal law, the public service  law,  the
         tax  law and the real property tax law, in relation to authorizing the
         creation of housing opportunity zones in  certain  cities,  towns  and
         villages within the state
         THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
       BLY, DO ENACT AS FOLLOWS:
    1    Section 1. The general municipal law is amended by adding a new  arti-
    2  cle 19-AA to read as follows:
    3                                 ARTICLE 19-AA
    4                  NEW YORK STATE HOUSING OPPORTUNITY ZONES
    5  SECTION 981.   SHORT TITLE.
    6          982.   LEGISLATIVE FINDINGS AND DECLARATION.
    7          983.   DEFINITIONS.
    8          984.   CRITERIA FOR HOUSING OPPORTUNITY ZONES.
    9          985.   POWERS OF THE COMMISSIONER.
   10          986.   PROPERTY TAX RELIEF.
   11          987.   BUSINESS TAX CREDIT.
   12          988.   REDUCED ELECTRICITY AND GAS RATES.
   13          989.   EXEMPTION FROM SALES TAX.
   14          989-A. WAIVER OF PERMIT FEES.
   15          989-B. SPECIAL PROVISIONS.
   16          989-C. MINIMIZATION OF DISPLACEMENT.
   17    S  981.  SHORT  TITLE. THIS ARTICLE SHALL BE KNOWN AND MAY BE CITED AS
   18  THE "NEW YORK STATE HOUSING OPPORTUNITY ZONES ACT".
   19    S 982. LEGISLATIVE FINDINGS AND DECLARATION. THE HIGH COST OF  HOUSING
   20  IS  NOW A MAJOR PROBLEM FOR THOUSANDS OF NEW YORKERS. COSTS OF ACQUIRING
   21  OR OCCUPYING ACCEPTABLE HOUSING HAVE INCREASED SIGNIFICANTLY  IN  RECENT
   22  YEARS.  FOR  TOO MANY HOUSEHOLDS, THE HIGH COST OF SHELTER IS NOT MERELY
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD02977-01-5
       A. 199                              2
    1  SERIOUS, IT IS TOO OFTEN AN INSURMOUNTABLE BARRIER TO THE ACHIEVEMENT OF
    2  A SAFE AND DECENT PLACE IN WHICH TO LIVE.
    3    IT  IS  HEREBY  FOUND  AND DECLARED THAT THERE EXISTS WITHIN THE STATE
    4  CERTAIN AREAS CHARACTERIZED BY A SEVERE SHORTAGE  OF  SAFE,  DECENT  AND
    5  AFFORDABLE HOUSING, DILAPIDATED AND ABANDONED RESIDENTIAL STRUCTURES AND
    6  SHRINKING  TAX  BASES. MOREOVER, IT IS FOUND THAT THE LACK OF HOUSING IN
    7  THESE AREAS THREATENS  EMPLOYMENT  GROWTH  PROSPECTS  AND  THAT  WITHOUT
    8  ADEQUATE  PROVISION  OF  HOUSING  AND THE SATISFACTION OF HOUSING NEEDS,
    9  THESE REGIONS OF THE STATE MAY NOT RETAIN SKILLED LABOR AND SUSTAIN  THE
   10  GROWTH IN EMPLOYMENT AND OUTPUT OF WHICH THEY ARE CAPABLE.
   11    S  983.  DEFINITIONS. 1. "COMMISSIONER" SHALL MEAN THE COMMISSIONER OF
   12  HOUSING AND COMMUNITY RENEWAL.
   13    2. "SUBSTANTIAL REHABILITATION" SHALL MEAN THE IMPROVEMENT OF A  RESI-
   14  DENTIAL  PROPERTY  WITH  THE  ASSISTANCE  OF  ANY FORM OF PUBLIC HOUSING
   15  MONIES TO A DECENT, SAFE AND SANITARY CONDITION IN ACCORDANCE WITH STAN-
   16  DARDS AS SHALL BE PROMULGATED BY THE COMMISSIONER. SUBSTANTIAL REHABILI-
   17  TATION MAY VARY IN DEGREE FROM GUTTING AND EXTENSIVE  RECONSTRUCTION  TO
   18  THE  CURE  OF SUBSTANTIAL ACCUMULATION OF DEFERRED MAINTENANCE. COSMETIC
   19  IMPROVEMENTS ALONE SHALL NOT QUALIFY AS SUBSTANTIAL REHABILITATION.
   20    S 984. CRITERIA FOR HOUSING OPPORTUNITY  ZONES.  TO  BE  ELIGIBLE  FOR
   21  DESIGNATION  BY  THE COMMISSIONER AS A HOUSING OPPORTUNITY ZONE, AN AREA
   22  MUST  BE  CHARACTERIZED  BY  A  SIGNIFICANT  AMOUNT  OF   DETERIORATING,
   23  SUBSTANDARD,  VACANT  OR  ABANDONED  RESIDENTIAL BUILDINGS WHICH ARE NOT
   24  BEING ADEQUATELY REPAIRED, RENOVATED, UPGRADED, MODERNIZED OR  REHABILI-
   25  TATED  UNDER  EXISTING  PROGRAMS  SO AS TO PROVIDE AN ADEQUATE SUPPLY OF
   26  SAFE AND DECENT HOUSING AT COSTS WHICH THE RESIDENTS  OF  THE  AREA  CAN
   27  REASONABLY AFFORD, A HIGH VACANCY RATE, A LARGE NUMBER OF HOMELESS FAMI-
   28  LIES  OR  INDIVIDUALS AND GENERAL ECONOMIC DISTRESS. THE LACK OF ANY ONE
   29  FACTOR IN A PARTICULAR REGION SHALL NOT BE DETERMINATIVE IN  THE  DESIG-
   30  NATION PROCESS. THE DESIGNATION OF ONE HOUSING OPPORTUNITY ZONE WITHIN A
   31  PARTICULAR  REGION SHALL NOT PRECLUDE OTHER AREAS WITHIN THE REGION FROM
   32  BEING SO DESIGNATED AS WELL, AS LONG AS THE APPROPRIATE  CRITERIA  EXIST
   33  WITHIN THE AREA TO SUPPORT SUCH A DESIGNATION.
   34    S 985. POWERS OF THE COMMISSIONER. THE COMMISSIONER SHALL:
   35    1. AFTER CONSULTATION WITH THE DIRECTOR OF THE BUDGET, THE CHIEF EXEC-
   36  UTIVE  OFFICER  OF  THE STATE OF NEW YORK MORTGAGE AGENCY, THE EXECUTIVE
   37  DIRECTOR OF THE HOUSING FINANCE AGENCY,  THE  SECRETARY  OF  STATE,  THE
   38  COMMISSIONER  OF  TAXATION AND FINANCE AND THE EXECUTIVE DIRECTOR OF THE
   39  STATE OFFICE OF RURAL  AFFAIRS,  PROMULGATE  REGULATIONS  GOVERNING  (A)
   40  CRITERIA  OF  ELIGIBILITY  FOR HOUSING OPPORTUNITY ZONE DESIGNATION, (B)
   41  THE APPLICATION PROCESS, (C) THE ELIGIBILITY OF BUSINESS ENTERPRISES FOR
   42  BENEFITS REFERRED TO IN SECTION NINE HUNDRED EIGHTY-SEVEN OF THIS  ARTI-
   43  CLE AND (D) STANDARDS DEFINING WHAT COMPRISES SUBSTANTIAL REHABILITATION
   44  AS USED IN THIS ARTICLE;
   45    2. RECEIVE AND REVIEW APPLICATIONS FOR DESIGNATION OF AREAS AS HOUSING
   46  OPPORTUNITY ZONES;
   47    3.  SOLICIT  AND  REVIEW THE OPINIONS OF LOCAL OFFICIALS AS TO WHETHER
   48  PARTICULAR AREAS SHOULD BE DESIGNATED AS HOUSING OPPORTUNITY ZONES; AND
   49    4. MAKE FINAL DETERMINATIONS OF AREAS AS  HOUSING  OPPORTUNITY  ZONES,
   50  PROVIDED,  HOWEVER,  THAT  ALL SUCH ZONES SHALL MEET THE REQUIREMENTS OF
   51  THIS ARTICLE.
   52    S 986. PROPERTY TAX RELIEF. ALL NEW RESIDENTIAL CONSTRUCTION INVOLVING
   53  THE ASSISTANCE OF ANY FORM OF  PUBLIC  HOUSING  MONIES  AND  SUBSTANTIAL
   54  REHABILITATION  OF  RESIDENTIAL UNITS WITH THE ASSISTANCE OF ANY FORM OF
   55  PUBLIC HOUSING MONIES COMPLETED SUBSEQUENT TO THE DESIGNATION OF AN AREA
   56  AS A HOUSING OPPORTUNITY ZONE SHALL BE ENTITLED  TO  AN  EXEMPTION  FROM
       A. 199                              3
    1  PROPERTY  TAXES  AS  PROVIDED FOR IN THE REAL PROPERTY TAX LAW; PROVIDED
    2  THAT SUCH NEW CONSTRUCTION OR SUBSTANTIAL REHABILITATION IS  DONE  TO  A
    3  UNIT LOCATED WITHIN SUCH ZONE.
    4    S  987.  BUSINESS TAX CREDIT. BUSINESS ENTERPRISES WHICH INVEST IN NEW
    5  CONSTRUCTION INVOLVING THE ASSISTANCE OF  ANY  FORM  OF  PUBLIC  HOUSING
    6  MONIES  OR  SUBSTANTIAL  REHABILITATION  OF  RESIDENTIAL  UNITS WITH THE
    7  ASSISTANCE OF ANY FORM OF PUBLIC HOUSING MONIES LOCATED WITHIN A HOUSING
    8  OPPORTUNITY ZONE SHALL BE ENTITLED TO A TAX CREDIT PURSUANT TO  SUBPARA-
    9  GRAPH  (I)  OF  PARAGRAPH  (B) OF SUBDIVISION ONE OF SECTION TWO HUNDRED
   10  TEN-B AND SUBPARAGRAPH (A) OF PARAGRAPH TWO OF SUBSECTION (A) OF SECTION
   11  SIX HUNDRED SIX OF THE TAX LAW,  PROVIDED,  THAT  SAID  CONSTRUCTION  OR
   12  REHABILITATION  MUST  PRODUCE A RATIO OF AT LEAST ONE UNIT OF HOUSING AT
   13  AN AFFORDABLE RATE FOR EVERY TWO UNITS  THAT  ARE  TO  BE  SOLD  AT  THE
   14  PREVAILING  MARKET RATE IN THE HOUSING OPPORTUNITY ZONE. AFFORDABLE RATE
   15  SHALL BE DEFINED AS THE RATE DESCRIBED IN THE HOUSING PROGRAM  USED  AND
   16  WHICH  HAS  SERVED AS THE SOURCE OF THE PUBLIC HOUSING MONIES APPLIED TO
   17  THE SPECIFIC PROJECTS BUILT OR REHABILITATED IN THE HOUSING  OPPORTUNITY
   18  ZONE.
   19    S 988. REDUCED ELECTRICITY AND GAS RATES. EACH UTILITY PROVIDING ELEC-
   20  TRIC  SERVICE,  GAS SERVICE OR BOTH, OTHER THAN A UTILITY OWNED OR OPER-
   21  ATED BY A MUNICIPALITY, SHALL BE REQUIRED TO PROVIDE A REDUCED  RATE  AS
   22  PROVIDED  FOR IN SECTION SIXTY-FIVE-C OF THE PUBLIC SERVICE LAW TO RESI-
   23  DENTIAL CUSTOMERS RESIDING IN HOUSING OPPORTUNITY ZONE RESIDENTIAL UNITS
   24  WHICH WERE NEWLY CONSTRUCTED WITH THE ASSISTANCE OF ANY FORM  OF  PUBLIC
   25  HOUSING  MONIES  OR  WHICH  WERE  SUBSTANTIALLY  REHABILITATED  WITH THE
   26  ASSISTANCE OF ANY FORM OF PUBLIC HOUSING MONIES SUBSEQUENT TO THE DESIG-
   27  NATION OF THE AREA AS A HOUSING OPPORTUNITY ZONE.
   28    S  989.  EXEMPTION  FROM  SALES  TAX.  ALL  MATERIALS  USED   IN   THE
   29  CONSTRUCTION  INVOLVING  THE  ASSISTANCE  OF  ANY FORM OF PUBLIC HOUSING
   30  MONIES OR SUBSTANTIAL REHABILITATION WITH THE ASSISTANCE OF ANY FORM  OF
   31  PUBLIC  HOUSING  MONIES  OF  HOUSING  OPPORTUNITY ZONE RESIDENTIAL UNITS
   32  SHALL BE EXEMPT FROM ALL STATE AND LOCAL SALES TAXES.
   33    S 989-A. WAIVER OF PERMIT FEES. ALL PERMIT FEES REQUIRED BY THE  STATE
   34  OR  LOCALITY  FOR ANY PHASE OF THE CONSTRUCTION OR SUBSTANTIAL REHABILI-
   35  TATION OF HOUSING OPPORTUNITY ZONE RESIDENTIAL UNITS WHICH HAVE RECEIVED
   36  ASSISTANCE OF ANY FORM OF PUBLIC HOUSING MONIES SHALL BE WAIVED IN TOTAL
   37  BY THE STATE OR THE LOCALITY.
   38    S 989-B. SPECIAL PROVISIONS. EACH RESIDENTIAL  UNIT  CONSTRUCTED  WITH
   39  THE  ASSISTANCE  OF  ANY  FORM OF PUBLIC HOUSING MONIES OR SUBSTANTIALLY
   40  REHABILITATED WITH THE ASSISTANCE OF ANY FORM OF PUBLIC  HOUSING  MONIES
   41  WITHIN  A  HOUSING OPPORTUNITY ZONE SHALL BE READILY ADAPTABLE TO A UNIT
   42  WHICH IS COMPLETELY ACCESSIBLE BY PERSONS WITH HANDICAPPING CONDITIONS.
   43    S 989-C. MINIMIZATION OF DISPLACEMENT. EACH LOCALITY WITHIN  A  DESIG-
   44  NATED HOUSING OPPORTUNITY ZONE SHALL USE ITS BEST EFFORTS TO ENSURE THAT
   45  NEW  CONSTRUCTION AND SUBSTANTIAL REHABILITATION ARE CARRIED OUT IN SUCH
   46  A MANNER AS TO MINIMIZE THE LIKELIHOOD OF ANY  INVOLUNTARY  PHYSICAL  OR
   47  ECONOMIC  DISPLACEMENT  OF  TENANTS  AND  OWNERS  WHO RESIDE IN DWELLING
   48  ACCOMMODATIONS WHICH  ARE  THE  SUBJECT  OF  SUCH  NEW  CONSTRUCTION  OR
   49  SUBSTANTIAL REHABILITATION.
   50    S 2. The public service law is amended by adding a new section 65-c to
   51  read as follows:
   52    S  65-C.  REDUCED  ELECTRIC AND GAS RATES FOR HOUSING OPPORTUNITY ZONE
   53  RESIDENTIAL UNITS. 1. THE TERM "REDUCED RATE" SHALL MEAN  A  TWENTY-FIVE
   54  PERCENT REDUCTION PRIOR TO THE IMPOSITION OF GROSS RECEIPTS TAXES PURSU-
   55  ANT  TO  SECTION ONE HUNDRED EIGHTY-SIX-A OF THE TAX LAW AND SALES TAXES
       A. 199                              4
    1  PURSUANT TO ARTICLE TWENTY-EIGHT OF THE TAX LAW, IN THE  MONTHLY  AMOUNT
    2  BILLED TO AN ELIGIBLE CUSTOMER FOR ELECTRICITY, GAS OR BOTH.
    3    2.  A  UTILITY  SHALL  HAVE  A  CREDIT  AGAINST THE GROSS RECEIPTS TAX
    4  IMPOSED BY SECTION ONE HUNDRED EIGHTY-SIX-A OF THE TAX LAW IN THE AMOUNT
    5  OF ONE HUNDRED PERCENT OF ANY LOSS OF  REVENUE  IT  INCURS  DUE  TO  THE
    6  IMPLEMENTATION OF ITS REDUCED RATE.
    7    S  3.  The  tax  law is amended by adding a new section 4-a to read as
    8  follows:
    9    S 4-A. TAX CREDIT; REDUCED ELECTRIC AND GAS  RATES.    NOTWITHSTANDING
   10  ANY  OTHER  PROVISION  OF GENERAL, SPECIAL OR LOCAL LAW TO THE CONTRARY,
   11  ELECTRIC OR GAS UTILITY LIABLE FOR A TAX ASSESSED OR LEVIED BY THE STATE
   12  PURSUANT TO THE PROVISIONS OF SECTION ONE HUNDRED EIGHTY-SIX-A  OF  THIS
   13  CHAPTER  SHALL  HAVE  A CREDIT AGAINST ANY SUCH TAX IN THE AMOUNT OF ONE
   14  HUNDRED PERCENT OF ANY LOSS OF REVENUE ANY SUCH UTILITY HAS INCURRED  AS
   15  TO  THE  IMPLEMENTATION  OF A REDUCED RATE PURSUANT TO THE PROVISIONS OF
   16  SECTION SIXTY-FIVE-C OF THE PUBLIC  SERVICE  LAW.  THE  COMMISSIONER  IS
   17  HEREBY  AUTHORIZED  TO  ADOPT  RULES  AND  REGULATIONS  TO IMPLEMENT THE
   18  PROVISIONS OF THIS SECTION.
   19    S 4. Subparagraph (i) of paragraph (b) of  subdivision  1  of  section
   20  210-b  of the tax law, as added by section 17 of part A of chapter 59 of
   21  the laws of 2014, is amended to read as follows:
   22    (i) A credit shall be allowed under this subdivision with  respect  to
   23  tangible personal property and other tangible property, including build-
   24  ings  and  structural  components  of  buildings, which are: depreciable
   25  pursuant to section one hundred  sixty-seven  of  the  internal  revenue
   26  code, have a useful life of four years or more, are acquired by purchase
   27  as  defined  in  section  one  hundred  seventy-nine (d) of the internal
   28  revenue code, have a situs in this state and are (A) principally used by
   29  the taxpayer in the production of goods  by  manufacturing,  processing,
   30  assembling,  refining,  mining, extracting, farming, agriculture, horti-
   31  culture, floriculture, viticulture [or], commercial fishing, OR ELIGIBLE
   32  BUSINESS ENTERPRISE AS DETERMINED BY THE  COMMISSIONER  OF  HOUSING  AND
   33  COMMUNITY  RENEWAL  PURSUANT  TO SECTION NINE HUNDRED EIGHTY-FIVE OF THE
   34  GENERAL MUNICIPAL LAW, (B) industrial waste treatment facilities or  air
   35  pollution  control facilities, used in the taxpayer's trade or business,
   36  (C) research and development property, or (D) principally  used  in  the
   37  ordinary course of the taxpayer's trade or business as a broker or deal-
   38  er  in connection with the purchase or sale (which shall include but not
   39  be limited to the issuance, entering into, assumption,  offset,  assign-
   40  ment,  termination, or transfer) of stocks, bonds or other securities as
   41  defined in section four hundred  seventy-five  (c)(2)  of  the  Internal
   42  Revenue  Code,  or  of  commodities  as  defined in section four hundred
   43  seventy-five (e) of the Internal Revenue Code, (E) principally  used  in
   44  the  ordinary  course  of  the taxpayer's trade or business of providing
   45  investment advisory services  for  a  regulated  investment  company  as
   46  defined in section eight hundred fifty-one of the Internal Revenue Code,
   47  or  lending,  loan arrangement or loan origination services to customers
   48  in connection with the purchase or sale (which shall include but not  be
   49  limited  to the issuance, entering into, assumption, offset, assignment,
   50  termination, or transfer) of  securities  as  defined  in  section  four
   51  hundred seventy-five (c)(2) of the Internal Revenue Code, (F) originally
   52  used  in  the  ordinary course of the taxpayer's business as an exchange
   53  registered as a national  securities  exchange  within  the  meaning  of
   54  sections  3(a)(1)  and  6(a) of the Securities Exchange Act of 1934 or a
   55  board of trade as defined in section 1410(a)(1) of the New York Not-for-
   56  Profit Corporation Law or as an entity that is wholly owned  by  one  or
       A. 199                              5
    1  more  such  national  securities  exchanges  or boards of trade and that
    2  provides automation or technical services thereto,  or  (G)  principally
    3  used  as  a  qualified film production facility including qualified film
    4  production  facilities  having  a  situs in an empire zone designated as
    5  such pursuant to article eighteen-B of the general municipal law,  where
    6  the  taxpayer  is providing three or more services to any qualified film
    7  production company using the facility,  including  such  services  as  a
    8  studio  lighting  grid,  lighting  and  grip equipment, multi-line phone
    9  service, broadband information technology access, industrial scale elec-
   10  trical capacity, food services, security services, and  heating,  venti-
   11  lation  and air conditioning. Provided, however, a taxpayer shall not be
   12  allowed the credit provided by clauses (D), (E) and (F) of this subpara-
   13  graph unless (i) eighty percent or more of the employees performing  the
   14  administrative  and  support  functions resulting from or related to the
   15  qualifying uses of such equipment are located in this state or (ii)  the
   16  average  number of employees that perform the administrative and support
   17  functions resulting from or related  to  the  qualifying  uses  of  such
   18  equipment  and  are  located  in  this state during the taxable year for
   19  which the credit is claimed is equal  to  or  greater  than  ninety-five
   20  percent  of the average number of employees that perform these functions
   21  and are located in this state during the thirty-six  months  immediately
   22  preceding  the year for which the credit is claimed, or (iii) the number
   23  of employees located in this state during the taxable year for which the
   24  credit is claimed is equal to or greater  than  ninety  percent  of  the
   25  number  of  employees  located  in  this state on December thirty-first,
   26  nineteen hundred ninety-eight or, if the taxpayer  was  not  a  calendar
   27  year  taxpayer  in  nineteen  hundred  ninety-eight, the last day of its
   28  first taxable year ending after December thirty-first, nineteen  hundred
   29  ninety-eight. If the taxpayer becomes subject to tax in this state after
   30  the  taxable  year  beginning in nineteen hundred ninety-eight, then the
   31  taxpayer is not required to satisfy the employment test provided in  the
   32  preceding  sentence of this subparagraph for its first taxable year. For
   33  purposes of clause (iii) of this subparagraph the employment  test  will
   34  be  based  on  the number of employees located in this state on the last
   35  day of the first taxable year the taxpayer is subject  to  tax  in  this
   36  state.    If  the  uses  of the property must be aggregated to determine
   37  whether the property is principally used in qualifying uses, then either
   38  each affiliate using the property must satisfy this employment  test  or
   39  this  employment  test  must be satisfied through the aggregation of the
   40  employees of the taxpayer, its affiliated regulated broker, dealer,  and
   41  registered  investment adviser using the property.  For purposes of this
   42  subdivision, the term "goods" shall not include electricity.
   43    S 5. Subparagraph (A) of paragraph 2 of subsection (a) of section  606
   44  of  the  tax  law,  as  amended  by  chapter 637 of the laws of 2008, is
   45  amended to read as follows:
   46    (A) A credit shall be allowed under this subsection  with  respect  to
   47  tangible personal property and other tangible property, including build-
   48  ings  and  structural  components  of  buildings, which are: depreciable
   49  pursuant to section one hundred  sixty-seven  of  the  internal  revenue
   50  code, have a useful life of four years or more, are acquired by purchase
   51  as  defined  in  section  one  hundred  seventy-nine (d) of the internal
   52  revenue code, have a situs in this state and are (i) principally used by
   53  the taxpayer in the production of goods  by  manufacturing,  processing,
   54  assembling,  refining,  mining, extracting, farming, agriculture, horti-
   55  culture, floriculture, viticulture [or], commercial fishing, OR ELIGIBLE
   56  BUSINESS ENTERPRISE AS DETERMINED BY THE  COMMISSIONER  OF  HOUSING  AND
       A. 199                              6
    1  COMMUNITY  RENEWAL  PURSUANT  TO SECTION NINE HUNDRED EIGHTY-FIVE OF THE
    2  GENERAL MUNICIPAL LAW, (ii) industrial waste treatment facilities or air
    3  pollution control facilities, used in the taxpayer's trade or  business,
    4  (iii)  research  and  development property, (iv) principally used in the
    5  ordinary course of the taxpayer's trade or business as a broker or deal-
    6  er in connection with the purchase or sale (which shall include but  not
    7  be  limited  to the issuance, entering into, assumption, offset, assign-
    8  ment, termination, or transfer) of stocks, bonds or other securities  as
    9  defined  in  section  four  hundred  seventy-five (c)(2) of the Internal
   10  Revenue Code, or of commodities as defined  in  section  475(e)  of  the
   11  Internal  Revenue  Code,  (v) principally used in the ordinary course of
   12  the taxpayer's  trade  or  business  of  providing  investment  advisory
   13  services  for a regulated investment company as defined in section eight
   14  hundred fifty-one  of  the  Internal  Revenue  Code,  or  lending,  loan
   15  arrangement or loan origination services to customers in connection with
   16  the  purchase  or  sale  (which  shall include but not be limited to the
   17  issuance, entering into, assumption, offset, assignment, termination, or
   18  transfer) of securities as defined in section four hundred  seventy-five
   19  (c)(2) of the Internal Revenue Code, or (vi) principally used as a qual-
   20  ified  film  production  facility  including  qualified  film production
   21  facilities having a situs in an empire zone designated as such  pursuant
   22  to  article  eighteen-B of the general municipal law, where the taxpayer
   23  is providing three or more services to  any  qualified  film  production
   24  company using the facility, including such services as a studio lighting
   25  grid,  lighting  and grip equipment, multi-line phone service, broadband
   26  information technology access,  industrial  scale  electrical  capacity,
   27  food  services,  security  services,  and  heating,  ventilation and air
   28  conditioning. For purposes of clauses (iv) and (v) of this subparagraph,
   29  property purchased by a taxpayer affiliated  with  a  regulated  broker,
   30  dealer,  or registered investment adviser is allowed a credit under this
   31  subsection if the property is used by its affiliated  regulated  broker,
   32  dealer   or  registered  investment  adviser  in  accordance  with  this
   33  subsection. For purposes of determining if the property  is  principally
   34  used  in  qualifying uses, the uses by the taxpayer described in clauses
   35  (iv) and (v) of this subparagraph may be aggregated.  In  addition,  the
   36  uses by the taxpayer, its affiliated regulated broker, dealer and regis-
   37  tered  investment  adviser  under either or both of those clauses may be
   38  aggregated. Provided, however, a taxpayer shall not be allowed the cred-
   39  it provided by clauses (iv) and (v)  of  this  subparagraph  unless  (I)
   40  eighty  percent  or  more of the employees performing the administrative
   41  and support functions resulting from or related to the  qualifying  uses
   42  of  such equipment are located in this state, or (II) the average number
   43  of employees that  perform  the  administrative  and  support  functions
   44  resulting  from  or related to the qualifying uses of such equipment and
   45  are located in this state during the taxable year for which  the  credit
   46  is  claimed is equal to or greater than ninety-five percent of the aver-
   47  age number of employees that perform these functions and are located  in
   48  this  state  during the thirty-six months immediately preceding the year
   49  for which the credit is  claimed,  or  (III)  the  number  of  employees
   50  located  in  this  state during the taxable year for which the credit is
   51  claimed is equal to or greater than ninety  percent  of  the  number  of
   52  employees  located  in  this  state  on  December thirty-first, nineteen
   53  hundred ninety-eight or, if the taxpayer was not a calendar year taxpay-
   54  er in nineteen hundred ninety-eight, the last day of its  first  taxable
   55  year  ending after December thirty-first, nineteen hundred ninety-eight.
   56  If the taxpayer becomes subject to tax in this state after  the  taxable
       A. 199                              7
    1  year  beginning  in  nineteen hundred ninety-eight, then the taxpayer is
    2  not required to satisfy the employment test provided  in  the  preceding
    3  sentence  of  this  subparagraph  for  its  first  taxable year. For the
    4  purposes  of  clause (III) of this subparagraph the employment test will
    5  be based on the number of employees located in this state  on  the  last
    6  day  of  the  first  taxable year the taxpayer is subject to tax in this
    7  state. If the uses of the  property  must  be  aggregated  to  determine
    8  whether the property is principally used in qualifying uses, then either
    9  each  affiliate  using the property must satisfy this employment test or
   10  this employment test must be satisfied through the  aggregation  of  the
   11  employees  of the taxpayer, its affiliated regulated broker, dealer, and
   12  registered investment adviser using the property. For purposes  of  this
   13  subsection, the term "goods" shall not include electricity.
   14    S  6.    The  real property tax law is amended by adding a new section
   15  420-d to read as follows:
   16    S 420-D. REAL PROPERTY TAX ABATEMENTS. NEWLY CONSTRUCTED  OR  SUBSTAN-
   17  TIALLY REHABILITATED RESIDENTIAL DWELLINGS LOCATED WITHIN HOUSING OPPOR-
   18  TUNITY  ZONES  DESIGNATED PURSUANT TO ARTICLE NINETEEN-AA OF THE GENERAL
   19  MUNICIPAL LAW SHALL BE EXEMPT FROM ALL  TAXES  IMPOSED  BY  A  MUNICIPAL
   20  CORPORATION,  INCLUDING  THOSE  IMPOSED BY A SCHOOL DISTRICT, OTHER THAN
   21  ASSESSMENTS FOR LOCAL IMPROVEMENTS,  DURING  CONSTRUCTION  OR  REHABILI-
   22  TATION,  SO  LONG AS SUCH DWELLING IS USED FOR RESIDENTIAL UNIT PURPOSES
   23  FOR A PERIOD NOT TO EXCEED TEN YEARS IN THE AGGREGATE AFTER THE  TAXABLE
   24  STATUS DATE IMMEDIATELY FOLLOWING THE COMPLETION THEREOF, CALCULATED NOT
   25  TO EXCEED THE FOLLOWING EXEMPTIONS: TWO YEARS OF FULL EXEMPTION FOLLOWED
   26  BY TWO YEARS OF EXEMPTION FROM EIGHTY PERCENT OF SUCH TAXATION, FOLLOWED
   27  BY  THREE  YEARS  OF  EXEMPTION  FROM  SIXTY  PERCENT  OF SUCH TAXATION,
   28  FOLLOWED BY TWO YEARS OF EXEMPTION FROM FORTY PERCENT OF SUCH  TAXATION,
   29  FOLLOWED BY TWO YEARS OF EXEMPTION FROM TWENTY PERCENT OF SUCH TAXATION;
   30  PROVIDED THAT TAXES SHALL BE PAID DURING ANY SUCH PERIOD AT LEAST IN THE
   31  AMOUNT  OF  THE  TAXES PAID ON SUCH LAND AND IMPROVEMENTS THEREON DURING
   32  THE TAX YEAR PRECEDING THE COMMENCEMENT OF SUCH CONSTRUCTION OR REHABIL-
   33  ITATION AND THAT THE EXEMPTION  FROM  TAXES  SHALL  NOT  BE  AVAILED  OF
   34  CONCURRENTLY UNDER ANY OTHER LAW.
   35    S  7. This act shall take effect on the first of October next succeed-
   36  ing the date on which it shall have become a law.